[Vnbiz] VAT treatment Vietnamese overseas branch

[Tran Dinh Hoanh]

Dear Dieu Linh,

Something in your question keeps me thinking, and now I re-read the
question and realize what that is.  It is peculiar that a company in
Vietnam that is thinking about branching out overseas  would want to
ask for information about invoicing and VAT.  Those things are the
least concern in the entire strategy.

When a company wants to expand, they would want to think about other
major costs and issues:  rent, utilities, employee wages, wage taxes,
product cost, transportation cost, import duties and other imports
limitations, immigration issues, management structure, coordination
and communication (between head office and the branch) etc...

What I am sensing is that maybe the company leadership is not focusing
their thinking on the right place.  We can't do a major strategic move
successfully without having the right strategic thinking.

If my client asks me a question like that (VAT and invoice), I would
answer like this:   "There is no VAT in the US.  Sales tax is a little
bit of something equivalent.  But before going into the details, let
me ask you a question. Why would you be concerned about VAT or sales
tax?  Is there any specific reason that you are so concerned about
it?"

As counsel, I would need to know the way my client is thinking, and if
I feel that they are not thinking in the right direction, I have to
steer them back to the right course.

VAT or sales tax should be at the bottom of the list of concerns.  You
think about them when you already have the answers for the major
issues.  But if a client doesn't know that the US has no VAT, it means
the client has not resolved the major issues (because if had resolved
the major issues, it would have known about such common knowledge on
VAT).  And if you have not resolved the major issues but you are
concerned about VAT, you are not thinking straight.  Your mind is not
on the right place.  You need to change the focus of your thinking, to
do better planning, before you can hope of a successful move.

Most of the time, the job of counsel (advisor, consultant, etc.) is
not just to give a mechanical answer to a question, but to see the way
the client is thinking through his question.  That way, counsel can
advise the client much more comprehensively and effectively.

(Think about a client who asks his psychologist:  "Where could I buy a
gun?"  The psychologist may not want to give a mechanical answer like:
"Go to this gun shop at this address..."  But his job is to find out
why the client asks such a question, and, if he finds out that his
client is thinking dangerously, how to help the client think
straight).

Have a great day!

Hoanh
________

On 10/27/06, Dieu Linh <caodieulinh23 at yahoo.com> wrote:
>
> [Vietnam Business Forum]
>
>
>
> Hi all
>
> My friend's Vietnamese Company plans to establish its
> branch in UK and US. She is looking for information on
> invoice and VAT treatment for this branch in UK and
> US.
>
> I am not UK and US tax expert and not confident
> evaluating information from Google. It would be great
> if I got some clues from CACC.
>
> Appreciate any help from you!!!
>
> Have a good weekend
>
> Linh
>
>
> __________________________________________________
>

-- 
Tran Dinh Hoanh, LLB, JD
Attorney of Law
Washington DC