Nội dung toàn văn Official Dispatch No. 3828/TCT-CS on tax policies for foreign contractors
MINISTRY OF FINANCE
SOCIALIST REPUBLIC OF VIET NAM
Hanoi, September 21, 2009
ON TAX POLICIES FOR FOREIGN CONTRACTORS
To: Provincial-level Tax Departments
The General Department of Taxation has received official letters from several units asking for guidance on the performance of tax obligations by foreign contractors implementing contracts on supplying imported machinery and equipment for works and projects in Vietnam stipulated by the Ministry of Finance’s Circular No. 169/1998/TT-BTC of December 22, 1998, guiding tax regulations applicable to foreign organizations and individuals doing business in Vietnam in forms of investment other than those specified in the Law on Foreign Investment in Vietnam.
Based on the Prime Minister’s directing opinions in the Government Office’s Official Letter No. 3165/VPCP-KTTH of May 18, 2009, the General Department of Taxation provides the following guidance:
In case contracts on supply of imported machinery and equipment for works and projects in Vietnam indicate the value of imported machinery and equipment separately from that of services provided in Vietnam, foreign contractors are not obliged to pay business income tax for the value of imported machinery and equipment. The value of services accompanying machinery and equipment and provided in Vietnam is liable to business income tax under Circular No. 169/1998/TT-BTC.
In case contracts do not separately calculate the value of imported machinery and equipment from that of accompanying services, the whole value of these contracts shall be liable to business income tax under the Circular No. 169/1998/TT-BTC.
For contracts that separately calculate the value of imported machinery and equipment from that of accompanying services, if foreign contractors have calculated and paid business income tax for the value of imported machinery and equipment, no adjustment shall be made.
The General Department of Taxation notifies the above guidance to provincial-level Tax Departments for information and guidance to their related units for compliance.
DIRECTOR GENERAL OF TAXATION