What are currencies in tax payment? What are cases of tax payment in convertible foreign currencies in Vietnam?

What are currencies in tax payment in Vietnam?

According to Article 7 of the Law on Tax Administration 2019, it is stipulated as follows:

Currencies in tax declaration and tax payment

1. The currencies in tax declaration and tax payment is Vietnamese Dong, except for cases where tax declaration and payment in convertible foreign currencies are permitted.

2. Taxpayers who perform accounting in foreign currency as regulated by the Law on Accounting must convert the foreign currency to Vietnamese Dong at the actual exchange rate at the time the transaction occurs.

3. For exported and imported goods, the currencies in tax payment is Vietnamese Dong, except for cases where tax declaration and payment in convertible foreign currencies are permitted. The exchange rate for tax calculation is implemented according to the provisions of the legislation on customs.

4. The Minister of Finance shall stipulate the Currencies in tax declaration and tax payment in convertible foreign currencies as specified in Clauses 1, 3, and the actual exchange rate as specified in Clause 2 of this Article.

The currencies in tax payment is Vietnamese Dong, except for cases where tax declaration in convertible foreign currencies is permitted.

What are currencies in tax payment? What are cases of tax payment in convertible foreign currencies in Vietnam? (Image from the Internet)

What are cases of tax payment in convertible foreign currencies in Vietnam?

According to Article 4 of Circular 80/2021/TT-BTC, tax payment in convertible foreign currencies is applicable in the following cases:

- In activities of searching, exploring, exploiting oil and gas (except for crude oil, condensate, natural gas sold in the Vietnamese market, or where the Government of Vietnam has different regulations), including: resource tax, corporate income tax; additional charges for profit-sharing oil when crude oil prices fluctuate upward; profit-sharing oil and gas for the host country; signature bonuses; commercial discovery bonuses; production bonuses; fees for reading and using oil and gas documents; compensation for non-compliance with minimum commitments; corporate income tax on income from transferring interests in oil and gas contracts; special tax, additional charges, and corporate income tax on residual oil of the oil and gas activities of the Vietsovpetro Joint Venture at Block 09.1:

Implementation of payment into the state budget in convertible foreign currencies used in payment transactions.

- Fees, charges, and other collections by the representative agencies of the Socialist Republic of Vietnam abroad:

Payment into the state budget in convertible foreign currencies stipulated in the documents regulating the collection rates of fees, charges, and other collections.

- Fees and charges collected by agencies and organizations in Vietnam permitted to collect fees and charges in foreign currency:

Payment into the state budget in convertible foreign currencies stipulated in the documents regulating the collection rates of fees and charges.

- Business activities related to e-commerce, digital-based business, and other services provided by providers abroad without a permanent establishment in Vietnam:

Payment into the state budget in convertible foreign currencies.

What are the principles for tax administration in Vietnam?

According to Article 5 of the Law on Tax Administration 2019, it is stipulated as follows:

Principles for Tax Administration

1. All organizations, households, business households, and individuals are obligated to pay tax as required by law.

2. Tax administration agencies and other state agencies assigned the task of revenue management shall carry out tax administration in accordance with this Law and other relevant legal provisions, ensuring transparency, equality, and protection of the lawful rights and interests of taxpayers.

3. Agencies, organizations, and individuals are responsible for participating in tax administration as regulated by law.

4. Performing administrative procedure reforms and applying modern information technology in tax administration; applying international tax administration practices, including the principle that the substance of operations and transactions determines tax obligations, risk management principles in tax administration, and other principles suitable to the conditions of Vietnam.

5. Applying preferential measures in performing tax procedures for exported and imported goods according to the provisions of customs law and the regulations of the Government of Vietnam.

Tax administration is implemented according to the following principles:

- All organizations, households, business households, and individuals are obligated to pay tax as required by law.

- Tax administration agencies and other state agencies assigned the task of revenue management shall carry out tax administration per the Law on Tax Administration 2019 and other relevant legal provisions, ensuring transparency, equality, and protection of the lawful rights and interests of taxpayers.

- Agencies, organizations, and individuals are responsible for participating in tax administration as regulated by law.

- Performing administrative procedure reforms and applying modern information technology in tax administration; besides, applying international tax administration practices, including the principle that the substance of operations and transactions determines tax obligations, risk management principles in tax administration, and other principles suitable to the conditions of Vietnam.

- Applying preferential measures in performing tax procedures for exported and imported goods according to the provisions of customs law and the regulations of the Government of Vietnam.