Công văn 1216/BTC-TCT

To: Samsung Electronics Vietnam Limited Liability Company (Yen Phong 1 industrial zone, Yen Trung ward, Yen Phong district, Bac Ninh province

The Ministry of Finance received Official Dispatch No.0211/11/FIN/SEV, of November 22, 2011 of Samsung Electronics Vietnam Limited Liability Company on proposal for re-consideration of the Ministry of Finance relating to application of official dispatch No.2321/TCT-CIVIL SERVANTS, of July 07, 2011 of General Department of Taxation:  “On guiding tax policy for foreign contractors business in Vietnam under manner of on-spot export and import” Regarding on this issue, the Ministry of Finance has opinion as follows:

1. The obligation of declaration and paying of foreign contractor tax (FCT) for on-spot import contracts:

Official dispatch No. 2321/TCT-CC , of July 07, 2011 of General Department of Taxation: “On guiding tax policy for foreign contractors business in Vietnam under manner of on-spot export and import” is based on the document guiding on tax management and collecting for foreign contractors buying, selling goods under on-spot export and import manner, be promulgated on the basis of provision in Article 2 of Law on Enterprise income tax No. 14/2008/QH12, Article 2 of the Government’s Decree No. 124/2008/ND-CP of December 11, 2008 and be guided by the Circular No. 134/2008/TT-BTC, of December 31, 2008,of the Ministry of Finance, taking effect from January 01, 2009. Therefore, all contracts of goods import between Vietnamese enterprises and foreign contractors under on-spot export and import manner having been signed as from January 01, 2009 are regulated by the above mentioned documents.

Thus, the request of Tax Service of Bac Ninh province for your company in additional declaration for FCT of contracts signed from January 01, 2009 to time point of promulgating official dispatch No.2321/TCT-CC, of July 07, 2011 of General Department of Taxation is completely proper with provision. Suggesting Samsung Electronics Vietnam Limited Liability Company to implement tax liability in according to provisions of current law on FCT.  

2. Regarding on application of Double taxation agreements:

If foreign contractors are belong to nations having signed Double taxation agreements with Vietnam and in such agreements had provisions different from current policy on contractor tax of Vietnam, such enterprise shall be applied provisions in such agreements. Suggesting your company make list of contractors in nations to which Vietnam has signed Double taxation agreements and sending dossier to tax Services of Bac Ninh province to be settled under each particular agreement, in according to proper order specified in Article 18 of the Circular No. 28/2011/TT-THE MINISTRY OF FINANCE, of February 28, 2011 of the Ministry of Finance.

The Ministry of Finance responds to Samsung Electronics Vietnam Limited Liability Company for implementation.