Taxpayers and taxes applicable to foreign organizations and individuals

Foreign-invested enterprises established and operating under Vietnamese law have the same tax obligations as domestic-invested enterprises, So what’s taxpayers and taxes applicable to foreign organizations and individuals in Viet Nam, et’s find out this issue with LSX.

Legal grounds

Circular 103/2014/TT-BTC

Law on Corporate Income Tax

Law on Personal Income Tax

Taxpayers

Article 4 of Circular 103/2014/TT-BTC stipulates taxpayers as follows:

Foreign contractors, Foreign subcontractors

– Firstly, oreign contractors, foreign sub-contractors doing business in Vietnam or earning income in Vietnam and ensuring the conditions as prescribed. The business is conducted on the basis of a contractor contract with a Vietnamese organization or individual or with another foreign organization or individual doing business in Vietnam on the basis of a subcontractor contract.

– Secondly, the determination of foreign contractors and foreign sub-contractors having permanent establishments in Vietnam or being residents in Vietnam shall comply with the provisions of the Law on Corporate Income Tax and the Law on Personal Income Tax and implementation manuals.

Note: In case the Agreement on avoidance of double taxation to which the Socialist Republic of Vietnam is a signatory contains different provisions on permanent establishments and residents the provisions of that Agreement shall apply.

Production and business individuals, organizations established and operating under Vietnamese law

Organizations established and operating under Vietnamese law; organizations registered to operate under Vietnamese law, other organizations and individuals engaged in production and business, as follows:

– Business organizations established under the Law on Enterprises, the Law on Investment, besides Law on Cooperatives;

– 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 Petroleum Law;

– Branches of foreign companies licensed to operate in Vietnam;

– Foreign organizations or representatives of foreign organizations permitted to operate in Vietnam;

– Ticket offices, agents in Vietnam of foreign airlines have the right to transport to and from Vietnam; directly or in partnership;

– Organizations and individuals providing sea transportation services of foreign shipping companies; agents in Vietnam of freight forwarders, foreign delivery companies;

– Securities company, securities issuer, fund management company; commercial bank where the securities investment fund or foreign organization opens a securities investment account;

– Other organizations in Vietnam;

– Individuals doing business in Vietnam.

Applicable taxes

– Firstly, foreign contractors and foreign sub-contractors are business organizations that fulfill their value-added tax and corporate income tax obligations.

– Secondly, foreign contractors, foreign sub-contractors being foreign individuals doing business and performing value-added tax obligations under the guidance in Circular 103/2014/TT-BTC personal income tax according to the law on personal income tax.

– Lastly, for other taxes, fees and charges, foreign contractors and foreign sub-contractors comply with current legal documents on taxes, fees and other fees.

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