Official Dispatch No. 3848/TCT-TNCN dated August 23, 2016 of the General Department of Taxation on introduction to new contents of Circular No.97/2016/TT-BTC

THE MINISTRY OF FINANCE
THE GENERAL DEPARTMENT OF TAXATION

Official Dispatch No. 3848/TCT-TNCN dated August 23, 2016 of the General Department of Taxation on introduction to new contents of Circular No.97/2016/TT-BTC

To:Provincial Departments of Taxation

On June 28, 2016, the Ministry of Finance promulgated Circular No. 97/2016/TT-BTC on documents and procedures for grant of exemption from personal income tax to Vietnamese employees of representative offices of UN System Organizations in Vietnam, which comes into force from August 15, 2016.

General Department of Taxation hereby requests Provincial Departments of Taxation to notify tax officials and disseminate new contents of the Circular among tax officials and taxpayers in their provinces, especially the following contents:

1. Scope of adjustment

Circular No. 97/2016/TT-BTC replaces Circular No. 57/2009/TT-BTC dated March 24, 2009 of the Ministry of Finance and comes into force from August 15, 2016. Circular No. 97/2016/TT-BTC only provides for documents and procedures for grant of exemption from personal income tax to Vietnamese employees of representative offices of UN System Organizations in Vietnam. Policies on grant of exemption from personal income tax to the aforementioned entities shall comply with the Prime Minister’s Decision No. 07/2016/QD-TTg dated February 22, 2016.

2. Documents and procedures for tax exemption

Pursuant to Article 2 of Circular No. 97/2016/TT-BTC:

2.1. Application for tax exemption

2.1.1. An application for tax exemption consists of:

- The diplomatic note prepared by the representative office of the UN System Organization in Vietnam and list of Vietnamese employees eligible for PIT exemption (Form No. 01/DSMT-LHQ enclosed herewith).

- Copies of employment contracts.

2.1.2. Application for tax exemption in case of changes of Vietnamese employees:

- The diplomatic note prepared by the representative office of the UN System Organization in Vietnam and the adjusted list of Vietnamese employees eligible for PIT exemption (Form No. 02/TDDSMT-LHQ enclosed herewith);

- Employment contracts with new Vietnamese employees.

2.1.3. The application for tax exemption shall be made into 02 sets.

According to previous regulations,an application consists of a list of Vietnamese employees.

2.2. Deadline for submitting application for tax exemption

The deadline varies on a case-by-case basis:

2.2.1. The UN System Organization which establishes a new representative office in Vietnam shall submit the application for tax exemption within 30 days from the day on which the head of such organization submits the credentials to a competent Vietnamese authority.

2.2.2. The UN System Organization which already has a representative office in Vietnam before the effective date of this Circular shall submit the application for tax exemption in accordance with instructions provided herein within 30 days from the effective date of this Circular if such application has not been submitted.

2.2.3. Where a UN System Organization recruits a new employee or terminates an employment contract with a Vietnamese employee, the application which specifies the change shall be submitted by the 20^thof the month succeeding the month in which the changes occurs.

According to previous regulations,the application shall be submitted by May 30, 2009.

2.3. Receiving body

UN System Organizations shall submit applications for tax exemption to the Ministry of Foreign Affairs (Directorate of State Protocol).

According to previous regulations,applications for tax exemption shall be submitted to Provincial Department of Taxation of the same province.

2.4. Procedures for granting tax exemption:

The Ministry of Foreign Affairs (Directorate of State Protocol) shall verify the list (Form No. 01/DSMT-LHQ or 02/TDDSMT-LHQ) and send it to the Provincial Department of Taxation of the province where the representative office of the UN System Organization is located to complete tax exemption procedures within 05 working days from the day on which the satisfactory application is received.

According to previous regulations,the chief representative of the Office of UN Organizations in Vietnam is responsible for the accuracy of the list of employees eligible for tax exemption submitted to the tax authority.

For the Director

The Deputy Director

Cao Anh Tuan