(+84) 9 61 67 55 66
info@vietanlaw.vn

Foreign contractor tax declaration and payment services in Vietnam

In the rapidly evolving landscape of global business, foreign contractors operating in Vietnam are increasingly seeking clarity on their tax obligations. Navigating the complexities of foreign contractor tax declaration and payment can be daunting, especially for those unfamiliar with Vietnam’s regulatory framework. By understanding these key elements, foreign contractors can ensure their operations remain efficient and legally compliant while minimizing the risk of penalties and disputes. In this article, Viet An tax agent will give a better answer about the service of declaring and paying foreign contractor tax in Vietnam to clients.

Table of contents

Hide

    For whom is the foreign contractor tax declaration and payment service suitable

    According to the provisions of Circular 103/2014/TT-BTC, there are 5 cases in which contractor tax must be paid, specifically as follows:

    • Foreign organizations doing business with permanent establishments in Vietnam or without permanent establishments in Vietnam; foreign individuals doing business being residents of Vietnam or not residing in Vietnam (hereinafter collectively referred to as foreign contractors and foreign subcontractors) doing business in Vietnam or earning incomes arising in Vietnam on the basis of contracts, agreements or commitments between foreign contractors and Vietnamese organizations and individuals or between foreign contractors and foreign subcontractors to perform part of the work of the contractor contract.
    • Foreign organizations and individuals providing goods in Vietnam in the form of on-the-spot import and export and generating incomes in Vietnam on the basis of contracts signed between foreign organizations and individuals and enterprises in Vietnam (except for cases of processing and returning goods to organizations, foreign individuals) or distribute goods in Vietnam or provide goods according to the delivery conditions of international trade terms – Incoterms that the seller assumes risks related to goods entering the territory of Vietnam.
    • Foreign organizations and individuals that carry out part or all of the business activities of distributing goods or providing services in Vietnam in which foreign organizations and individuals are still the owners of goods delivered to Vietnamese organizations or are responsible for distribution costs, advertising, marketing, service quality, quality of goods delivered to Vietnamese organizations or fixing prices for sale of goods or prices for provision of services; including the case of authorizing or hiring a number of Vietnamese organizations to perform part of distribution services and other services related to the sale of goods in Vietnam.
    • Foreign organizations and individuals through Vietnamese organizations and individuals to negotiate and sign contracts in the name of foreign organizations and individuals.
    • Foreign organizations and individuals exercising the right to export, import and distribute in the Vietnamese market, purchase goods for export or sell goods to Vietnamese traders in accordance with the law on trade.

    Steps to declare foreign contractor tax

    Steps to foreign contractor tax declaration and payment services

    • Step 1: Clearly determine the object of tax declaration and payment, whether the enterprise or individual is subject to paying tax to the foreign contractor or not?
    • Step 2: Register a tax identification number to pay tax on behalf of a foreign contractor if you use the foreign contractor tax declaration and payment service. The tax identification number used to declare contractor tax consists of 10 digits.
    • Step 3: Determine the taxes that the contractor must pay. Individuals or enterprises subject to foreign contractor tax payment need to fulfill the following 2 tax obligations:
      • Pay VAT.
      • Pay CIT.
    • Step 4: Prepare and submit the foreign contractor’s tax return on time.

    How to determine the amount of tax payable by foreign contractors

    When using the foreign contractor tax declaration and payment service provided by Viet An tax agent, our unit will be responsible for determining the correct contractor tax amount applied to two types of tax, namely VAT and CIT, and at the same time is obliged to make and submit the declaration on time for your business. The specific formula for determining contractor tax is as follows:

    VAT

    VAT payable = VAT calculation turnover * VAT calculation % rate on turnover.

    In which:

    VAT-calculated turnover = Turnover exclusive of VAT/(1-% of VAT calculation on turnover).

    Percentage of VAT calculation on turnover

    No Production and business lines Percentage of VAT calculation on turnover
    1 The service of leasing machinery and equipment for construction and installation insurance does not include NVL, machinery and equipment contractors 5
    2 Production and transportation associated with goods, construction and installation including NVL contractors, machinery and equipment 3
    3 Other business lines 2

    CIT

    Payable CIT = CIT calculation revenue * Payable CIT rate on turnover

    In which

    CIT calculation turnover = Turnover excluding CIT / (1- payable CIT rate on turnover)

    Percentage (%) of CIT calculated on taxable turnover for business lines:

    No Business lines Rate (%) of CIT calculated on taxable turnover
    1 Trade (except for processing goods for foreign organizations and individuals) 1
    2 Services for insurance machinery and equipment tax 5
    3 Restaurant, hotel, casino management services 10
    4 Financial Services 2
    5 Aircraft, aircraft and ship leasing services 2
    6 The service of leasing machinery and equipment for construction and installation insurance does not include NVL, machinery and equipment contractors 2
    7 Other transportation production and business activities (sea transportation, air transportation) 2
    8 Transfer of securities, certificates of deposit, reinsurance abroad, reinsurance commission 0.1
    9 Interest on loans 5
    10 Income from copyright 10

    Foreign contractor tax declaration and payment service of Viet An Tax Agent in Vietnam

    • Advising on related issues when enterprises are required to declare and pay contractor tax.
    • Contractor tax identification number registration service.
    • Contractor tax declaration service on a per-incurrence basis or by monthly declaration period.
    • Contractor’s tax finalization service when there is an official letter from the tax authority.
    • Does the service of confirming whether the enterprise needs to fulfill the contractor’s tax obligation or not?

    If customers want to use the service of declaring and paying taxes for foreign contractor, please pick up the phone and call Viet An Tax Agent‘s hotline number for free advice!

    Related Acticle

    Corporate and risk governance service in Vietnam

    Corporate and risk governance service in Vietnam

    Corporate and risk governance are two important factors and are closely related to each other in organizing and operating a business. Effective corporate governance cannot lack the identification, assessment, and…
    Debt accounting services in Vietnam

    Debt accounting services in Vietnam

    In an increasingly complex business environment, this work not only stops at recording and processing payments, but also profoundly affects financial stability and cooperation with partners. So what is debt…
    After setting up a company consulting services in Brunei

    After setting up a company consulting services in Brunei

    After being officially established in Brunei, the company has also completed part of the process to operate in Brunei. However, to ensure that business activities run smoothly, comply with the…
    Base salary in Vietnam 2025

    Base salary in Vietnam 2025

    The base salary has a direct impact on the salaries of many subjects such as cadres, civil servants, public employees and the armed forces, lump-sum maternity allowances of female employees…
    After setting up a company consulting services in Cambodia

    After setting up a company consulting services in Cambodia

    After the company is established in Cambodia, businesses need to carry out a series of post-establishment legal procedures to ensure smooth business activities, comply with the law and also be…

    CONTACT VIET AN LAW

    In Hanoi: (+84) 9 61 67 55 66
    (Zalo, Viber, Whatsapp, Wechat)

    WhatsApp Chat

    whatsapp-1

    In Hochiminh: (+84) 9 61 67 55 66
    (Zalo, Viber, Whatsapp, Wechat)

    WhatsApp Chat

    whatsapp-1

    ASSOCIATE MEMBERSHIP