VIETNAM AD INDUSTRY FACES NEW TAX RULES
By Adnews Staff
Vietnam will introduce new tax rules for advertisers at the end of the month. Under new regulations, the country will cut tax-deductible advertising and sales promotion expenses from 5% to 2% of total allowable business expenses. Companies could spend over the limit, but none of the spending above 2% will be offset against tax. Once approved, the rules will be applied retroactively in calculating corporate taxes during the current fiscal year, ending Dec. 31. Foreign and local marketers and ad agency executives say the move could spell disaster for the industry. They say the rules will cut revenues at TV and radio stations, as well as in print media, many of which are state-owned. Foreign advertisers spent up to 15% of total business expenses to reach Vietnam's 76 million people. In the start-up phase, this could be as high as 20%.