Circular No. 12/2005/TT-BTC dated February 4, 2005 of the Ministry of Finance amending and supplementing a number of points of the Finance Ministry’s Circular No. 81/2004/TT-BTC dated August 13, 2004 guiding the implementation of the Government’s Decree No. 147/2004/ND-CP dated July 23, 2004 detailing the implementation of the Ordinance on income tax on high-income earners

CIRCULAR

AMENDING AND SUPPLEMENTING A NUMBER OF POINTS OF THE FINANCE MINISTRY’S CIRCULAR No. 81/2004/TT-BTC OF AUGUST 13, 2004 GUIDING THE IMPLEMENTATION OF THE GOVERNMENT’S DECREE No. 147/2004/ND-CP OF JULY 23, 2004 DETAILING THE IMPLEMENTATION OF THE ORDINANCE ON INCOME TAX ON HIGH-INCOME EARNERS

Pursuant to Ordinance No. 35/2001/PL-UBTVQH10 of May 19, 2001 on Income Tax on High-Income Earners; Ordinance No. 14/2004/PL-UBTVQH11 of March 24, 2004 Amending and Supplementing a Number of Articles of the Ordinance on Income Tax on High-Income Earners;

Pursuant to the Government’s Decree No. 147/2004/ND-CP of July 23, 2004 detailing the implementation of the Ordinance on Income Tax on High-Income Earners;

Pursuant to the Government’s Decree No. 77/2003/ND-CP of July 1, 2003 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

The Ministry of Finance hereby amends and supplements its Circular No. 81/2004/TT-BTC of August 13, 2004 guiding the implementation of the Government’s Decree No. 147/2004/ND-CP of July 23, 2004 detailing the implementation of the Ordinance on Income Tax on High-Income Earners as follows:

I. TO AMEND AND SUPPLEMENT A NUMBER OF POINTS OF THE FINANCE MINISTRY’S CIRCULAR No. 81/2004/TT-BTC

1. Point 1.3 of Section I is amended as follows:

“1.3. Foreigners who earn incomes in Vietnam, including:

Foreigners working in Vietnam at enterprises, economic, cultural or social organizations, representative offices or branches of foreign companies; and independent practitioners in Vietnam.”

2. Point 1.1.4 of Section II is amended as follows:

“1.1.4. For foreigners considered as not residing in Vietnam, their taxable incomes are the total of their incomes generated in Vietnam, irrespective of whether they receive incomes in Vietnam or overseas.

Foreigners shall be considered as residing in Vietnam if they stay in Vietnam for 183 days or more in 12 consecutive months after their arrival in Vietnam; and shall be considered as not residing in Vietnam if they stay in Vietnam for less than 183 days.”

3. Point 3.2.2 of Section III is amended and supplemented as follows:

“3.2.2. Income-paying agencies not conducting production and business activities shall declare and pay tax at the Tax Departments of the provinces or centrally-run cities. In cases where income-paying agencies are headquartered in districts or provincial towns, they shall declare and pay tax at the Tax Sub-Departments of the localities where they are headquartered.”

4. Point 3.4 of Section III is amended and supplemented as follows:

“3.4. Tax declaration and remittance time-limits:

Tax declarations must be submitted to tax offices by the 10^th, and tax amounts must be remitted into the State budget by the 25^th, of the month following the month when incomes are generated, at the latest.

The date of income tax remittance shall be determined as follows:

In cases where tax amounts are remitted via bank transfer, the tax-remittance date shall be the date the concerned banks or credit institutions sign for certification in the money-remittance receipts.

In cases where tax amounts are remitted in cash, the tax-remittance date shall be the date the State treasuries receive tax money or the tax offices issue receipts, concretely:

- In cases where tax amounts are remitted directly to the State treasuries: the tax-remittance voucher shall be the “paper on money remittance to the State treasuries in cash” and the tax-remittance date shall be the date the State treasuries receive money and inscribe such in the money-remittance paper.

- In cases where tax amounts are remitted via tax offices: the tax-remittance voucher shall be the “tax collection receipts” and the tax-remittance date shall be the date the tax offices receive money and issue tax collection receipts.”

5. The fourth em rule of Point 2.1, Section IV is amended as follows:

“- To issue income tax receipts to individuals that have demands therefor and issue income tax withholding vouchers to individuals so as to certify the income tax amount already withheld by income-paying agencies. Income-paying agencies shall file applications, made according to form No. 07/TNCN issued together with this Circular, to tax offices requesting the issuance of tax receipts and tax withholding vouchers; and report on the use of receipts and vouchers each month to the tax offices according to regulations on management of tax receipts and prints.”

6. Forms of declarations enclosed with Circular No. 81/2004/TT-BTC are amended and supplemented as follows:

Forms of declarations issued together with the Finance Ministry’s Circular No. 81/2004/TT-BTC of August 13, 2004 guiding the implementation of the Government’s Decree No. 147/2004/ND-CP of July 23, 2004 detailing the implementation of the Ordinance on Income Tax on High-Income Earners, including Forms No. 01/TNTX, No. 02a/TNTX, No. 02b/TNTX, No. 03a/TNTX, No. 03b/TNTX, No. 04/TNTX, No. 05/TNTX, No. 06/TNKTX, No. 08/TNTX, No. 10/TNTX, No. 11/TNTX and No. 15/TNTX, are replaced by, and added with contents guiding the fill-in of, forms issued together with this Circular, including Forms No. 01a/TNTX, No. 01b/TNTX, No. 02a/TNTX, No. 02b/TNTX, No. 03a/TNTX, No. 03b/TNTX, No. 04/TNTX, No. 05/TNTX, No. 06/TNKTX, No. 08/TNTX, No. 10/TNTX, No. 11/TNTX and No. 15/TNTX; form No. 14/TNCN is annulled.

II. IMPLEMENTATION ORGANIZATION

This Circular takes effect 15 days after its publication in the Official Gazette and all regulations contrary to this Circular are hereby annulled.

Tax offices of various levels shall have to propagate and guide individuals being income tax payers and income-paying organizations or individuals to strictly comply with the provisions of this Circular.