Which entities are subject to contractor tax? Where is the place to submit contractor tax declareration in Vietnam?

Which entities are subject to contractor tax?

According to Article 1 of Circular 103/2014/TT-BTC, subjects liable for contractor tax are as follows:

- Foreign organizations or individuals doing business with a permanent establishment in Vietnam or without a permanent establishment in Vietnam.

- Foreign organizations or individuals supplying goods in Vietnam in the form of on-the-spot import-export and generating income in Vietnam based on a contract or distributing goods in Vietnam or supplying goods under the delivery conditions of international commercial terms - Incoterms.

- Foreign organizations or individuals carrying out part or all of business activities of distributing goods, providing services in Vietnam.

- Foreign organizations or individuals through a Vietnamese organization or individual to negotiate, sign contracts in the name of foreign organizations or individuals.

- Foreign organizations or individuals exercising the right to export, import, and distribute in the Vietnamese market, purchasing goods for export, selling goods to Vietnamese traders following commercial laws.

Which entities are contractor taxpayers in Vietnam?

Based on Article 4 of Circular 103/2014/TT-BTC, the contractor tax payers are specified as follows:

[1] Foreign contractors, foreign subcontractors who meet the stipulated conditions doing business in Vietnam or having income in Vietnam. The business is conducted based on a contractor agreement with Vietnamese organizations or individuals or with foreign organizations or individuals doing business in Vietnam based on a subcontractor agreement.

- The determination of whether foreign contractors, foreign subcontractors have a permanent establishment in Vietnam or are residents in Vietnam follows the provisions of the Law on Corporate Income Tax, Law on Personal Income Tax and related guiding documents.

- In cases where a double taxation avoidance agreement signed by the Socialist Republic of Vietnam has different provisions on permanent establishment, residency, those provisions will apply.

[2] Organizations established and operating under Vietnamese law, organizations registered under Vietnamese law, other organizations, and individual producers and businesses purchasing services, services associated with goods or incurring income in Vietnam based on contractor or subcontractor agreements; purchasing goods in the form of on-the-spot import-export or according to international commercial terms (Incoterms); distributing goods or providing services on behalf of foreign organizations or individuals in Vietnam (hereinafter referred to as the Vietnamese Party) including:

- Business organizations established under the Enterprise Law 2020, Investment Law 2020, and Cooperative Law 2023;

- Economic organizations of political, socio-political, social, socio-professional organizations, armed units, career organizations, and other organizations;

- Oil and gas contractors operating under the Petroleum Law;

- Branches of foreign companies permitted to operate in Vietnam;

- Foreign organizations or representatives of foreign organizations permitted to operate in Vietnam;

- Ticket offices, agents in Vietnam of foreign airlines authorized to transport to and from Vietnam, directly transporting or forming alliances;

- Organizations or individuals doing maritime transportation services for foreign shipping companies; agents in Vietnam of foreign logistic companies, freight forwarders;

- Securities companies, securities issuing organizations, fund management companies, commercial banks where investment funds or foreign organizations open securities investment accounts;

- Other organizations in Vietnam;

- Individuals producing business in Vietnam.

Which entities are subject to contractor tax? Where is the place to submit contractor tax declareration in Vietnam? (Image from the Internet)

Where is the place to submit contractor tax declareration in Vietnam?

According to Article 45 of Tax Administration Law 2019, the specific places to submit contractor tax declarerations are prescribed as follows:

- Taxpayers submit tax declarerations at the local tax authority directly managing them.

- In cases of tax declareration submission under the single-window mechanism, the submission location follows the provisions of that mechanism.

- The submission location for tax declarerations regarding import and export goods follows the Customs Law regulations.

- The Government of Vietnam specifies the submission locations for the following cases:

+ Taxpayers having multiple production, business activities;

+ Taxpayers conducting production, business activities in multiple locations; taxpayers having tax obligations for taxes declared and paid each time they arise;

+ Taxpayers having tax obligations arising from land-related revenues; licensing of water resource exploitation, mineral resources;

+ Taxpayers having tax obligations for personal income tax finalization;

+ Taxpayers declareration taxes through electronic transactions and other necessary cases.