VietnameseOfficial Dispatch No. 4594/TCT-DTNN of December 20, 2005, on taxes applicable to foreign contractors
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Official Dispatch No. 4594/TCT-DTNN of December 20, 2005, on taxes applicable to foreign contractors
| Issuing body: | General Department of Taxation | Effective date: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Official number: | 4594/TCT-DTNN | Signer: | Pham Van Huyen |
| Type: | Official Dispatch | Expiry date: | Updating |
| Issuing date: | 20/12/2005 | Effect status: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Fields: | Tax - Fee - Charge |
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Effect status: Known
THE MINISTRY OF FINANCE THE GENERAL DEPARTMENT OF TAXATION’S ------- | SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom – Happiness --------- |
No. 4594/TCT-DTNN | Hanoi, December 20, 2005 |
OFFICIAL LETTER
ON TAXES APPLICABLE TO FOREIGN CONTRACTORS
To: The branch of Vietnam Price Waterhouse Coppers Company Ltd.,
In reply to the Official Letter dated November 27, 2005, of the Branch of Vietnam Price Waterhouse Coppers Company Ltd., inquiring about business income tax (BIT)-liable turnover of foreign contractors and sub-contractors that do not apply the Vietnamese accounting regime, the General Department of Taxation hereby gives the following opinions:
According to the provisions of Point 2, Section I, Part C of the Finance Ministry’s Circular No. 169/1998/TT-BTC of December 22, 1998, guiding tax regimes applicable to foreign organizations and individuals conducting business in Vietnam in forms other than investment forms under the Law on Foreign Investment in Vietnam, where contractors subcontract part of their work to Vietnamese subcontractors, their taxable turnover shall not include the value of the subcontracts performed by Vietnamese subcontractors. If subcontractors are foreign organizations or individuals, the taxable turnover shall be the total turnover earned by contractors. Foreign subcontractors shall not have to pay BIT if they can produce documents proving that contractors have paid the tax on the turnover generated by foreign subcontractors.
According to these provisions, in the case in which the contractor signed contracts before 2004, its BIT calculation turnover shall not include the value of the contracts transferred to foreign subcontractors, if the contractor can produce documents proving that foreign subcontractors have paid BIT on the value of contracts they performed.
Above is the General Department of Taxation’s answer to the inquiry of the branch of Vietnam Price Waterhouse Coppers Company Ltd. for the latter’s knowledge and compliance.
FOR THE GENERAL DIRECTOR OF TAXATION DEPUTY GENERAL DIRECTOR Pham Van Huyen |
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