Are there amendments to regulations on contractor tax under Law on Amendments to 4 Law on Investment and Bidding of Vietnam?

What are amendments to the Bidding Law of Vietnam?

On November 29, 2024, the National Assembly passed the Law amending the Law on Planning, Law on Investment, Law on Investment in the form of Public-Private Partnership, and Bidding Law 2024 (effective from January 15, 2025)

The Law amending the Law on Planning, Law on Investment, Law on Investment in the form of Public-Private Partnership, and Bidding Law 2024 amends and supplements certain provisions of the following laws:

- Planning Law 2017

- Investment Law 2020

- Law on Public-Private Partnership Investment 2020

- Bidding Law 2023

Are there amendments to regulations on contractor tax under Law on Amendments to 4 Law on Investment and Bidding of Vietnam? (Image from the Internet)

Are there amendments to regulations on contractor tax under Law on Amendments to 4 Law on Investment and Bidding of Vietnam?

The Law amending the Law on Planning, Law on Investment, Law on Investment in the form of Public-Private Partnership, and Bidding Law 2024 revises certain contents of the Bidding Law 2023 as follows:

- Amends and supplements Article 29 of the Bidding Law 2023 on selecting contractors in special cases

Amendments and Supplements to Certain Articles of the Bidding Law

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8. Amends and supplements Article 29 as follows:

“Article 29. Selecting contractors in special cases

1. The selection of contractors in special cases applies to packages in projects or procurement estimates with one or more specific conditions regarding procedures, criteria for contractor selection, contract signing, and execution terms, or when the implementation must ensure national defense, security, foreign relations, territorial borders, or fulfill a national political mission that cannot apply any contractor selection forms stipulated in Articles 21, 22, 23, 24, 25, 26, 27, and 28 of this Law.

2. The Government of Vietnam shall detail this Article.”

- Adds Article 34a to the Bidding Law 2023 on Selecting investors in special cases, following Article 34

Amendments and Supplements to Certain Articles of the Bidding Law

“Article 34a. Selecting investors in special cases

1. The selection of investors in special cases applies to business investment projects with one or more specific requirements or conditions regarding investment procedures; procedures for land handover, leasing, or sea area allocation; methods and criteria for investor selection and contents of business investment project contracts, or when ensuring national defense, security, foreign relations, territorial borders, national interests, fulfilling a national political mission that cannot apply any investor selection forms stipulated in clauses 1 and 2, Article 34 of this Law.

2. The Government of Vietnam shall detail this Article.”

- Amends point b, clause 1 of Article 45 of the Bidding Law 2023 on the preparation time for bidding documents

Amendments and Supplements to Certain Articles of the Bidding Law

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16. Amends and supplements points b and đ clause 1 of Article 45 as follows:

a) Amends and supplements point b as follows:

“b) The minimum time for preparing bidding documents for open and restricted bidding is 18 days for domestic bidding and 35 days for international bidding from the first issuance of the solicitation documents to the bid closing. For construction and mixed packages with a package price not exceeding 20 billion VND and goods and non-consulting service packages with a price not exceeding 10 billion VND, the minimum preparation time for bidding documents is 09 days for domestic bidding and 18 days for international bidding. For simple consulting packages or consulting packages worth no more than 500 million VND or urgent consulting packages requiring immediate execution due to schedule requirements, the minimum preparation time is 07 days for domestic bidding;”

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- Amends and supplements Article 42 of the Bidding Law 2023 on Prior Bidding

Thus, the contractor tax regulations are not amended in the amendment of the 4 Investment and Bidding Laws, but some contents about selecting investors, prior bidding, and preparation time for bidding documents, etc., are modified.

Which cases are required to pay contractor tax in Vietnam?

According to Article 1 of Circular 103/2014/TT-BTC, there are 5 cases required to pay contractor tax. Specifically:

- Foreign organizations doing business with a permanent establishment in Vietnam or without a permanent establishment in Vietnam; foreign individuals doing business that are residents or non-residents 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 Foreign Contractors and Vietnamese organizations or individuals or between Foreign Contractors and Foreign Subcontractors to perform part of the contractor contract.

- Foreign organizations or individuals supplying goods in Vietnam in the form of on-the-spot export and import and generating income in Vietnam based on contracts signed between foreign organizations or individuals and businesses in Vietnam (except in the case of processing and returning goods to foreign organizations or individuals) or distributing goods in Vietnam or supplying goods under Incoterms delivery terms that place the risk related to goods up to the Vietnam territory on the seller.

- Foreign organizations or individuals partially or wholly conducting distribution business activities, providing services in Vietnam where the foreign organizations or individuals still own the goods delivered to Vietnamese organizations or bear the costs for distribution, advertising, marketing, service quality, and goods delivered to Vietnamese organizations, or set the selling price of goods or service supply; including cases of delegating or hiring some Vietnamese organizations to perform some distribution services or other services related to the sale of goods in Vietnam.

- Foreign organizations or individuals conducting negotiations and signing contracts in the name of foreign entities through Vietnamese organizations or individuals.

- Foreign organizations or individuals exercising export, import, distribution rights in the Vietnam market, purchasing goods for export, selling goods to Vietnamese traders in accordance with commercial law.