Foreign organizations and individuals, whether residents or non-residents of Vietnam, who earn income in Vietnam based on contracts, agreements, or commitments between foreign contractors and Vietnamese organizations, must declare and pay contractor tax according to the following procedure.
1. Tax registration (Clause 5, Article 5, Circular 80/2012/TT-BTC)
If the parent company is not registered to pay taxes directly with the tax authorities, the company in Vietnam is responsible for declaring and paying taxes on its behalf.
First, the company in Vietnam must register for a 10-digit tax identification number to use for filing and paying taxes on behalf of the parent company.
Tax registration documents:
- Tax registration declaration form No. 04.1-ĐK-TCT issued together with Circular 80.
- A copy of the contract signed with the foreign contractor.
- Form 04.1-ĐK-TCT –BK 01 issued together with Circular 80.
Registration deadline: Within 10 working days from the date the responsibility for withholding and remitting tax arises. - The tax authorities will process the application and issue a tax identification number to the business.
2. Basis and method for calculating tax
The tax payable by the contractor in this case is corporate income tax.
| Corporate income tax payable | = | Taxable revenue for corporate income tax | x | Corporate income tax rate calculated on taxable revenue |
Taxable revenue for corporate income tax
Determining taxable corporate income in specific cases:
| Taxable revenue for corporate income tax | = |
Revenue excludes corporate income tax. ___________________________________ |
| 1 – Corporate income tax rate calculated on taxable revenue |
Note:
– Revenue excluding corporate income tax is the amount of interest paid by Homeway Company.
– The interest rate is the transfer selling rate of the commercial bank where transactions are regularly conducted (Article 51 of Circular 200).
The corporate income tax rate (%) calculated on taxable revenue is 5%.
3. Declaration
Form:
– Declaration form 01/NTNN (Issued together with Circular 156)
Deadline:
+ For each transaction: no later than the 10th (tenth) day from the date of payment to the foreign organization.
+ Monthly: No later than the 20th of the month following the month in which the tax liability arises.
- Upon completion of the contract, Homeway Vietnam Company submits the final settlement on behalf of the parent company.
Form:
- Tax declaration form 02/NTNN (Issued together with Circular 156)
- List of foreign contractors and Vietnamese subcontractors participating in the contract according to mẫu 02-1/NTNN, 02-2/NTNN.
Deadline:
The deadline for submitting tax returns for foreign contractors is no later than 45 days from the date the contract ends.
For further information, please see the other services offered by EXPERTIS:
- Full-service accounting
- Business accounting services
- Accounting bookkeeping services
- Financial statement auditing services
- Auditing services for management purposes
- Tax settlement consultation
- Prepare financial statements
- Affiliate trading advisory services
- Social insurance and payroll tracking services
