Foreign contractor tax is a significant financial obligation within the Vietnamese tax system, applicable to foreign organizations and individuals doing business or earning income in Vietnam.
This article provides guidance on distinguishing between cases where Vietnamese businesses self-declare and pay contractor tax on behalf of foreign contractors and other cases. Foreign investors have registered and are paying taxes directly through the General Department of Taxation's electronic portal..
📌In which cases can a business declare and pay contractor tax on behalf of a foreign contractor?
Vietnamese businesses (the tax-deducting party) are responsible for declaring, deducting, and paying taxes arising from contracts signed with foreign contractors into the Vietnamese state budget. These taxes typically include Value Added Tax (VAT) and Corporate Income Tax (CIT) at prescribed rates based on taxable revenue.
🔍 When is self-declaration and payment of contractor tax on behalf of foreign contractors applicable?
- When a foreign national fails to meet one of the conditions for direct tax payment in Vietnam (for example, not having a permanent establishment in Vietnam, not applying the Vietnamese accounting system, or having a business operating period in Vietnam under contract of less than 183 days).
- When foreign taxpayers do not register to pay taxes directly through the General Department of Taxation's electronic portal.
In summary, you need to declare and pay contractor tax yourself when:
- When you sign a contract with a foreign contractor and that foreign contractor... No Included in the list of entities registered to pay taxes directly on the General Department of Taxation's electronic portal (https://etaxvn.gdt.gov.vn/nccnn/Request)
- When the nature of the contract and the form of operation of the foreign contractor fall under the category of contractor tax payable through the Vietnamese party withholding at source (according to current regulations on contractor tax).
⚖️ Responsibilities of Vietnamese businesses when self-declaring and paying contractor tax on behalf of foreign contractors
- Determine the tax obligations of foreign nationals.
- Contractor tax declarations can be filed on a transaction-by-transaction basis or monthly (depending on the case).
- Deduct the tax payable before making payment to the foreign contractor.
- Pay the deducted taxes into the state budget on time.
- Maintain records and related documents.
📝 Invoices and supporting documents when self-declaring and paying contractor tax on behalf of foreign contractors.
After paying the tax on behalf of another party, the Vietnamese enterprise will receive a receipt for the payment to the state budget. Foreign entities will not issue Vietnamese VAT invoices in this case.
📌 In what cases can foreign taxpayers register to pay taxes directly and businesses only need to obtain invoices?
This is a case where a foreign contractor directly registers, declares, and pays taxes arising from transactions with Vietnamese organizations and individuals through the General Department of Taxation's electronic portal for foreign suppliers.
Typically, these are large foreign contractors such as Google, Facebook… Below is a list of some foreign contractors who have registered and paid taxes directly through the Electronic Tax Portal:
|
No. |
Tax code |
Name of the taxpayer |
Date of issuance of tax identification number |
|
150 |
9000000133 |
Samsung Electronics Co., Ltd. |
27/04/2022 14:30:26 |
|
151 |
9000000126 |
LinkedIn Singapore Pte. Ltd. |
18/04/2022 08:41:35 |
|
152 |
9000000119 |
EZVIZ INTERNATIONAL LIMITED |
18/04/2022 08:41:25 |
|
153 |
9000000101 |
Educational Testing Service |
13/04/2022 16:21:51 |
|
154 |
9000000091 |
Blizzard Entertainment Inc. |
06/04/2022 14:41:27 |
|
155 |
9000000084 |
TIKTOK PTE. LTD. |
04/04/2022 11:07:49 |
|
156 |
9000000077 |
Netflix Pte. Ltd. |
31/03/2022 15:39:17 |
|
157 |
9000000052 |
iHerb, LLC |
30/03/2022 10:50:20 |
|
158 |
9000000045 |
Microsoft Regional Sales Pte Ltd |
24/03/2022 15:56:01 |
🔍 When will the direct tax payment registration system be applied to foreign taxpayers?
- When a foreign national engages in e-commerce, digital platform-based business, and other services without a permanent establishment in Vietnam with organizations or individuals in Vietnam.
- NTNN voluntary registration and are issued a tax identification number by the Vietnamese tax authorities to enable them to declare and pay taxes directly.
⚖️ Responsibilities of Vietnamese businesses when foreign investors have registered to pay taxes directly
- Look up the list of foreign entities registered to pay taxes directly: Vietnamese businesses need to access the General Department of Taxation's electronic portal (https://etaxvn.gdt.gov.vn/nccnn/Request) to check if the foreign entity they are dealing with is on the list of registered entities that self-declare and pay taxes.
- If NTNN is on the list: Vietnamese businesses are not required to deduct and pay contractor tax on behalf of foreign contractors for transactions within the scope of registered foreign contractors.
In short, you only need to look up the list of taxpayers who have paid taxes and obtain invoices when:
- When you transact with a foreign entity (especially in the e-commerce and digital services sectors) and after checking the General Department of Taxation's electronic portal, you determine that this foreign entity is registered and self-declares and pays taxes directly in Vietnam.
- In this case, you no longer need to go through the procedure of deducting and remitting contractor tax; you only need to request the foreign contractor to provide a valid invoice for the transaction.
📝 Invoices and supporting documents when foreign taxpayers have registered to pay taxes directly.
- Get the invoice from NTNN: Vietnamese businesses will receive invoices (usually electronic invoices conforming to international standards or the foreign entity's own format) directly from the foreign entity. These invoices are considered valid documents for accounting purposes.
- Note: It is necessary to provide complete business information to foreign contractors so that when foreign contractors issue internationally standardized electronic invoices, the invoices fully reflect the company's information.
⚙️ Guide on how to look up foreign contractors registered for tax in Vietnam
To look up a foreign contractor that is registered for tax in Vietnam, follow these steps:
➡️ Step 1: Access the Overseas Suppliers Portal at hereSelect your language (Vietnamese or English) in the upper right corner.
➡️ Step 2: Click on “List of Registered Foreign Providers” (Vietnamese) or “LIST OF REGISTERED FOREIGN PROVIDERS” (English).
➡️ Step 3: Enter the contractor's tax identification number or select the registration date to search.
Understanding and complying with regulations on foreign contractor tax is crucial to ensuring legal business operations and avoiding legal and financial risks. Businesses and foreign contractors should consult relevant legal documents and use lookup tools to check their tax registration status, thereby ensuring transparent and effective business cooperation.
For more detailed information on foreign direct investment tax and tax payment procedures, please read the detailed article. Handbook | Contractor Tax in Vietnam.