Official Dispatch No. 1826/TCT-TNCN dated May 27, 2011 of the General Department of Tax on Personal Income Tax Policy

THE MINISTRY OF FINANCE

THE GENERAL DEPARTMENT OF TAX

Official Dispatch No. 1826/TCT-TNCN dated May 27, 2011 of the General Department of Tax on Personal Income Tax Policy

To: Quang Nam Department of  Tax

The General Department of Tax received the Official Dispatch No. 113/CV-CTTVXD dated May 09, 2011 of the Quang Nam Construction and Consulting Limited Company on question to the personal income tax policy, Quang Nam Department of Tax answered at two documents (Official Dispatch No. 863/CT-TTHT dated March 04, 2011 and Official Dispatch No. 2165/CT-TNCN dated April 22, 2011), and the General Department of Tax has opinions as following:

According to the instruction on point 1, Section2, Part A of the Circular 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance guiding the implementation of a number of Articles of the Law on Personal Income Tax and guiding the implementation of the Government’s Decree No. 100/2008/ND-CP dated September 08, 2008, detailing a number of Articles of the Law on Personal Income Tax:

“Incomes from business activities

Incomes from business activities are those earned from production or business activities in the following domains:

- Goods production or trading or service provision in all domains and business sectors under law, such as goods production and trading; construction; transport; food and drink catering; provision of services, including house or business space lease service.

- Independent professional activities of individuals in domains and sectors for which they are licensed or issued practice certificates under law.”

According to the instruction of the Article 5 of the Circular No. 62/2009/TT-BTC Circular No. 62/2009/TT-BTC dated March 27, 2009, of the Ministry of Finance amending and supplementing the Ministry of Finance’s Circular No. 84/2008/TT-BTC of September 30, 2008, guiding a number of articles of the Law on Personal Income Tax and guiding the Government’s Decree No. 100/2008/ND-CP of September 8, 2008, detailing a number of articles of the Law on Personal Income Tax:

“Organizations and individuals that pay commissions to goods sale agents; salaries, wages, remuneration or other sums of money to individuals performing services of VND 500,000 or more each time or as the total value of commissions or service charges, shall withhold personal income tax before paying incomes to these individuals under the following guidance:

- Withholding tax at the single rate of 10% of paid incomes, except for cases for which the Ministry of Finance has given a written guidance on specific temporary withholding rates (for insurance or lottery agency commission).

Comply with above guidance:

- Individuals having business registration have to make up a list and pay tax in accordance with regulation.

- Individuals as collaborators who are not in Company’s workforce find works outside and bring to Company to sign promise contract, Company has to deduct at the percentage 10% for the service with total income payment of 500.000 VND and  above when paying these individual on the implementation of consulting, designing and so  on.

Quang Nam Department of Tax is proposed to study and solve in accordance with regulations.

FOR THE GENERAL DIRECTOR

DEPUTY GENERAL DIRECTOR

Pham Duy Khuong