• An Giang
  • Binh Duong
  • Binh Phuoc
  • Binh Thuan
  • Binh Dinh
  • Bac Lieu
  • Bac Giang
  • Bac Kan
  • Bac Ninh
  • Ben Tre
  • Cao Bang
  • Ca Mau
  • Can Tho
  • Dien Bien
  • Da Nang
  • Da Lat
  • Dak Lak
  • Dak Nong
  • Dong Nai
  • Dong Thap
  • Gia Lai
  • Ha Noi
  • Ho Chi Minh
  • Ha Giang
  • Ha Nam
  • Ha Tinh
  • Hoa Binh
  • Hung Yen
  • Hai Duong
  • Hai Phong
  • Hau Giang
  • Khanh Hoa
  • Kien Giang
  • Kon Tum
  • Lai Chau
  • Long An
  • Lao Cai
  • Lam Dong
  • Lang Son
  • Nam Dinh
  • Nghe An
  • Ninh Binh
  • Ninh Thuan
  • Phu Tho
  • Phu Yen
  • Quang Binh
  • Quang Nam
  • Quang Ngai
  • Quang Ninh
  • Quang Tri
  • Soc Trang
  • Son La
  • Thanh Hoa
  • Thai Binh
  • Thai Nguyen
  • Thua Thien Hue
  • Tien Giang
  • Tra Vinh
  • Tuyen Quang
  • Tay Ninh
  • Vinh Long
  • Vinh Phuc
  • Vung Tau
  • Yen Bai

Taxes applying to foreign contractors

VGP – The Ministry of Finance on August 6, 2014 issued Circular 103/TT-BTC (Circular 103) replacing Circular 60/2010/TT-BTC to provide guidance on tax obligations applied to foreign organizations and individuals to do business or originate income in Viet Nam.

October 14, 2014 8:20 AM GMT+7

Illustration photo

Question: Who are the two supplemented objects subjected to tax treatment in accordance with Circular 103?

What are some cases not subjected to tax applying to foreign contractors?

How much value added tax (VAT) applying to foreign contractors?

Answer:

Circular 103 supplements two objects subject to tax treatment including:

· Foreign organizations and individuals conducting a part of the whole distribution of goods and provision of services into Viet Nam in which such organizations and individuals are still owners of the goods delivered to Vietnamese organizations or bear the cost for distribution, advertising, promotion and quality of goods and services in Viet Nam (including the case of authorization or hiring Vietnamese parties to conduct a part of distribution services or other services related to the supply of goods in Viet Nam)

· Foreign organizations and individuals through Vietnamese organizations and individuals to conduct negotiations and sign contracts under the foreign organizations and individuals’ names; or perform export, import and distribution rights in Viet Nam or purchase of goods for export or for sale to Vietnamese traders under the commercial law.

Addition of some cases not subject to tax

· Where the sellers delivers goods at the border of Viet Nam or overseas without attached services conducted in Viet Nam even in cases of having warranty conditions under the sellers’ obligations and responsibilities;

· Foreign organizations and individuals which use bonded warehouses and inland container depots (ICD) as storage of goods for ancillary supporting international transportation, transit, cross-border transportation or other enterprises’ processing are added to list of objects not subjecting to tax under this Circular.

VAT calculation

In accordance with the rates of revenue, as from October 1, 2014, VAT payable will be calculated on the VAT taxable revenue instead of calculating VAT payable basing on the added value as stipulated in Circular 60.

Percentages for VAT calculation are specified from 2-5% depending on the lines of businesses.

Circular 103 took effect from October 1, 2014./.