Vietnam: Increased cap on deductible interest expenses; postponed e-invoice rules

Vietnam: Increased cap on deductible interest expenses

Measures in Vietnam are intended to increase the cap of deductible interest expenses and to extend the deadline for mandatory electronic invoices (e-invoices).


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The interest deductibility cap is to be increased from 20% to 30% of “earnings before interest, tax, depreciation and amortization” (EBITDA) with regard to a “net interest amount.” In other words, interest expenses can now be offset against interest income. Also, capitalized interest is not included in the meaning of interest that is subject to this cap. Any amount of interest that cannot be deducted cannot be carried forward and used in future years. The cap does not apply with regard to certain credit institutions, insurance companies, security companies, or loans under development assistance programs.

Concerning the e-invoice requirements, this is intended to be effective 1 July 2022 (from the current deadline of 1 November 2020).

Read a March 2020 report [PDF 122 KB] prepared by the KPMG member firm in Vietnam

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