In the case of a wholly foreign-owned limited liability company, with an investment license clearly stating the registered capital contributed in cash and assets in accordance with investment regulations, and registered capital in the form of capital contribution in the form of machinery and equipment from the parent company abroad transferred according to the capital contribution schedule with full documentation as required, and the capital contribution... If no payments are made, the parent company is overseas. Not subject to contractor tax.
Accordingly, the parent company is not required to declare or pay contractor tax for supplying machinery and equipment to wholly foreign-owned companies in Vietnam.
Explain:
Article 1 of Circular 103/2014/TT-BTC stipulates the subjects liable for contractor tax:
"1. Foreign organizations with or without a permanent establishment in Vietnam; foreign individuals with or without a permanent establishment in Vietnam (hereinafter collectively referred to as Foreign Contractors, Foreign Subcontractors) conducting business in Vietnam or having income arising in Vietnam based on contracts, agreements, or commitments between the Foreign Contractor and Vietnamese organizations or individuals, or between the Foreign Contractor and the Foreign Subcontractor to perform a part of the contractor's contract work…”
