Nội dung toàn văn Official Dispatch No. 3312/TCT-CS, On business income tax policy for profits
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MINISTRY
OF FINANCE |
SOCIALIST
REPUBLIC OF VIET NAM |
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No. 3312/TCT-CS |
Hanoi, September 03, 2008 |
OFFICIAL LETTER
To: Vietnam Government Web Portal
The General Department of Taxation has received Vietnam Government Web Portal’s Official Letter No. 485/TTDTCP-BD passing citizen Nguyen Dang Tuan’s letter inquiring about business income tax policy for incomes earned from production and business activities in Laos. Regarding this issue, the General Department of Taxation gives the following opinions:
Point 13, Section IV, Part B of the Finance Ministry's Circular No. 134/2007/TT-BTC of November 23, 2007, guiding the business income tax, stipulates: “A Vietnamese enterprise which makes overseas investment and earns incomes from its production and business activities overseas shall declare and pay business income tax in accordance with Vietnam’s current Law on Business Income Tax even if the enterprise is enjoying income tax exemption or reduction under the law of the country of investment. The business income tax rate for calculation and declaration of tax on incomes earned overseas is 28%, the preferential tax rate (if any), which the Vietnamese investor overseas is enjoying under the current Law on Business Income Tax, is not applied.
When the income earned from an overseas investment project is subject to business income tax (or another tax similar to business income tax) overseas, when calculating payable business income tax in Vietnam, a Vietnamese investor overseas may deduct the tax amount paid overseas or paid by the foreign investment partner (including taxes on dividends), but the deductible amount must not exceed the income tax calculated under Vietnam’s Law on Business Income Tax. When determining the payable business income tax in Vietnam, a Vietnamese investor overseas may also deduct the reduced or exempted amount of income tax on the profits earned from its overseas investment project under the law of the country of investment.”
Under the above guidance, the Thien Ly Joint Stock Company, which established a 100% Vietnamese-owned company in ChamPaasak province, Laos, under a Ministry of Planning and Investment license, shall declare and pay business income tax for the income the company in Laos earned in 2006 and 2007 according to Vietnam’s current Law on Business Income Tax. When this income was subject to business income tax in Laos, the paid tax amount may be deducted when calculating payable business income tax in Vietnam, but the deductible amount must not exceed the income tax calculated according Vietnam’s Law on Business Income Tax under the guidance of Circular No. 134/2007/TT-BTC above.
Tax declaration and payment for this income complies with the guidance of Circular No. 134/2007/TT-BTC Citizen Nguyen Dang Tuan should contact the local provincial tax office for specific guidance on tax declaration and payment for this income.
The General Department of Taxation informs Vietnam Government Web Portal thereof for reply to citizen Nguyen Dang Tuan.
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Pham Duy Khương |
