Chapter I
GENERAL PROVISION
Article 1. Subjects of application
This Circular is applicable to the following subjects (except for the subjects stated in Article 4 Chapter I of this Circular);
1. Foreign business organizations having or not having Vietnam-based permanent establishments; foreign business individuals being resident or non-resident objects in Vietnam (hereinafter referred to as foreign contractors, foreign sub-contractors) that do business in Vietnam or earn incomes in Vietnam on the basis of contracts, agreements or commitments between foreign contractors and Vietnamese organizations, individuals, or between foreign contractors and foreign sub-contractors to perform a part of the Contractor agreement.
2. Foreign organizations and individuals supplying goods in Vietnam by on-spot export/import and earning incomes in Vietnam on the basis of the contracts signed between foreign organizations, individuals and enterprises in Vietnam (except for the case of processing and re-exporting goods to foreign organizations, individuals), or providing goods under the DDP, DAT, DAP delivery conditions (incoterms)
Example 1:
- Case 1: The overseas enterprise X overseas signs the contract to purchase cloth from the Vietnamese enterprise A and request the Vietnamese enterprise A to deliver to the Vietnamese enterprise B (by on-spot export and import as prescribed by law). The enterprise X earns incomes in Vietnam on the basis on the contract signed between the enterprise X and the enterprise B (the enterprise X sells cloths to the enterprise B).
In this case, the enterprise X is the subject of application as prescribed in this Circular. The enterprise B is responsible to declare, deduct and pay tax on behalf of the enterprise X as prescribed in this Circular.
- Case 2: The overseas enterprise Y signs the contract for cloth processing with the Vietnamese enterprise C and request the enterprise C to deliver to the Vietnamese enterprise D to continue producing (by on-spot export and import as prescribed by law). The enterprise Y earns income in Vietnam on the basis of the contract signed between the enterprise Y and the enterprise D (the enterprise Y sells goods to the enterprise D).
In this case, the enterprise Y is the subjects of application as prescribed in this Circular. The enterprise D is responsible to declare, deduct and pay tax on behalf of the enterprise Y as prescribed in this Circular.
- Case 3: the overseas enterprise Z signs the contract for processing or purchasing cloth with the Vietnamese enterprise E (the enterprise Z provides raw materials for the enterprise E for processing) and request the enterprise E to deliver to the enterprise G to continue processing (by on-spot export, import processing as prescribed by law). After having finished the processing, the enterprise G exports for returning the goods to the enterprise Z and the enterprise Z must pay the processing charge to the enterprise G under the processing contract.
In this case, the enterprise Z is not the subject of application as prescribed in this Circular.
Article 2. Taxpayers
1. Foreign contractors, foreign sub-contractors satisfying the conditions prescribed in Article 8 Section 2 Chapter II or Article 14 Section 4 Chapter II of this Circular that do business or earn incomes in Vietnam (including the territorial land, islands, internal waters, territorial sea and its airspace, the sea outside the territorial sea including the seabed and soil under the seabed that Vietnam exercises its sovereignty and jurisdiction in accordance with Vietnam's law and international law. The business is done on the basis of the contractor contracts with Vietnamese organizations and individuals or with other foreign organizations, individuals doing business in Vietnam on the basis of the sub-contractor contracts.
The determination of foreign contractors, foreign sub-contractors having Vietnam-based permanent establishments or being residents in Vietnam shall be made under the Law on Enterprise income tax, the Law on personal income tax and their guiding documents.
In case the Agreement on avoiding double taxation which the Socialist Republic of Vietnam having signed otherwise defines the permanent r establishments or residents, such provisions shall be applied and implemented.
2. Organizations being established, operate under Vietnam’s law, organizations being registered to operate under Vietnam’s law, other organizations, and individuals do production and business on purchase services, services attached with goods or earn incomes in Vietnam on the basis of contractor contracts ot sub-contractor contracts (hereinafter referred to as the Vietnam party) include:
- Business organizations being established under the Law on Enterprise, the Law on State enterprises (now the Law on Enterprise), the Law on Foreign investment in Vietnam (now the Law on investment) and the Law on Cooperatives;
- The economic organizations of political organizations, socio-political organizations, social organizations, Socio-professional organizations, armed units, non-business organizations and other organizations;
- Petroleum contractors operating under the Law on petroleum
- Branches of foreign companies licensed to operate in Vietnam;
- Foreign organizations or representatives of foreign organizations licensed to operate in Vietnam;
- Vietnam-based ticket offices, agents of foreign airlines licensed for Vietnam-inbound and –outbound transportation on their own or in joint-venture;
- Organizations and individuals business maritime transport services of foreign maritime transport firms; Vietnam-based agents of foreign forwarding and warehousing and delivery firms;
- Securities companies, securities issuance organizations, fund management companies, commercial banks where the securities investment funds or foreign organizations open securities investment accounts;
- Other organizations in Vietnam;
- Individuals producing and business in Vietnam.
The tax payers as prescribed in Clause 2 Article 2 Chapter I of this Circular are responsible to deduct the VAT amount, the enterprise income tax amount guided in Section 3, Chapter II of this Circular before making payment to foreign contractors, foreign sub-contractors.
Article 3. Applicable taxes
1. Foreign contractors, foreign sub-contractors being business organizations shall fulfill the VAT liability, enterprise income tax liability as guided in this Circular.
2. Foreign contractors, foreign sub-contractors being foreign business individuals shall fulfill the VAT liability as guided in this Circular, the personal income tax liability under the the Law on personal income tax.
3. For other kinds of tax, fees and charges, foreign contractors, foreign sub-contractors shall implement in accordant with the other current legal documents on tax, fees and charges.
Article 4. Non-applicable subjects
This Circular is not applicable to:
1. Foreign organizations, individuals doing business in Vietnam as prescribed by the Law on investment, the Law on petroleum and the Law on credit institutions
2. Foreign organizations, individuals providing goods for Vietnamese organizations and individuals without the attached services performed in Vietnam in the following forms:
- Goods delivery at foreign border gates: the seller shall be liable for all responsibilities, cost and risks relating to the goods export and delivery at foreign border gates; the buyer shall be liable for all responsibilities, cost and risks relating to the goods receipt and transportation from foreign border gates to Vietnam.
- Goods delivery at Vietnam’s border gates: the seller shall be liable for all responsibilities, cost and risks relating to the goods until goods to the Vietnam’s border gate; the buyer shall be liable for all responsibilities, cost and risks relating to the goods receipt and transportation from the Vietnam’s border gate.
3. Foreign organizations, individuals earning incomes from services being provided and used outside Vietnam.
Example 2:
The company H in Hongkong provides the goods arrangement service at a Hongkong’s port for an international transport fleet of the company A in Vietnam. The company A must pay the company H the charge for the goods arrangement service at the Hongkong’s port.
In this case, the goods arrangement service at the Hongkong’s port is the service being provided and used in Hongkong, so it is not the taxable subject in Vietnam.
Example 3:
A foreign organization provides professional services, bond management and issuance, legal consultancy, depository agents, roadshow organization (a trademark activation activity) for company A in Vietnam in countries where company A issue GDRs (Global Depositary Receipt) and international bonds. The services performed by the foreign organization are not the subjects of application in this Circular.
4. Foreign organizations, individuals providing overseas the following services for Vietnamese organizations and individuals:
- Repair of means of transport (airplanes, airplane engines, airplane spare parts, ships), machinery, equipment, (including sea cables, transmission devices), including or not including accompanying spare materials and equipments;
- Advertising and marketing (except for internet-based advertising and marketing);
Example 4:
A Vietnamese enterprise signs a contract with an organization in Singapore to perform advertising service for products in Singapore’s market. This advertising service of the Singaporean organization is not a subject of application of this Circular. In case the Singaporean organization advertises the products for consumption in Vietnam on the internet, the income from this advertising service is the subject of application of this of this Circular.
- Trade and investment promotion;
- Brokerage: goods sale, service provision overseas
Example 5:
A Vietnamese enterprise signs a contract to hire an enterprise in Thailand to perform the brokerage service in order to sell the products of the Vietnamese enterprise in the Thailand market or in the world’s market. This brokerage service of the Thai enterprise is not the subject of application of this Circular. In case the Vietnamese enterprise signs a contract to hire an enterprise in Thailand to perform the brokerage service in order to transfer real estate of the Vietnamese enterprise in Vietnam, this brokerage service in the subject of application of this Circular.
- Training (except for online training);
Example 6:
The company A in Vietnam signs a contract with the university B in Singapore for the Vietnamese employees to study at the university B in Singapore. The training service of the university B is not the subject of application of this Circular. In case the company A in Vietnam signs a contract with the university B for teaching the Vietnamese employees in Vietnam via online learning, the online training service of the university B is the subject of application of this Circular.
- Sharing charges (paid charges) for international postal and telecomminication services between Vietnam and other countries when such services are performed outside Vietnam; services of renting foreign transmission lines and satellite bands, shall comply with the Law on post and the Law on telecommunication
Article 5. Interpretation of terms
In this Circular, the following terms are construed as follows:
1. “Contractor contract” is the contract, agreement or commitment between a foreign contractor and a Vietnam party.
2. “Sub-contractor contract" is the contract, agreement or commitment between a sub-contractor and a foreign contractor.
Sub-contractors include foreign sub-contractors and Vietnamese sub-contractors
3. The Vietnam’ territory includes territorial land, islands, internal waters, sea and its airspace, the sea outside the territorial sea including the seabed and soil under the seabed that Vietnam exercises its sovereignty and jurisdiction in accordance with Vietnam's law and international law
Tìm kiếm
Thông tư 60/2012/TT-BTC (Bản Word)