Template for Finalization of Foreign Contractor Tax Declaration for the Latest Year 2024
Latest 2024 Form for Foreign Contractor Tax Finalization Declaration
At Appendix 2 issued together with Circular 80/2021/TT-BTC, there is a provision for the latest form for foreign contractor tax finalization declaration.
View details of the foreign contractor tax finalization declaration form here Download
Latest Foreign Contractor Tax Finalization Declaration Form for 2024 (Image from Internet)
When is the corporate income tax (CIT) finalization point for foreign contractors using the direct method?
In Clause 6, Article 8 of Decree 126/2020/ND-CP, it provides regulations on taxes declared monthly, quarterly, annually, periodically upon the arising tax obligation, and tax finalization as follows:
Types of taxes declared monthly, quarterly, annually, periodically upon the arising tax obligation, and tax finalization
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- Types of taxes and collections declared annually and finalized up to the point of dissolution, bankruptcy, termination of operation, termination of contracts, or reorganization of enterprises. In the case of a change in the type of enterprise (excluding privatized state enterprises) where the converted enterprise inherits all tax obligations of the converted enterprise, there is no need to finalize taxes up to the point of decision on the conversion of the enterprise, the enterprise issues a tax finalization when the year ends. Specifically, as follows:
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e) Value-added tax and corporate income tax by the direct method of foreign contractors are finalized at the end of the contractor agreement; corporate income tax by the hybrid method of foreign contractors is finalized at the end of the contractor agreement; corporate income tax by the declaration method of foreign contractors is finalized annually.
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Hence, the corporate income tax (CIT) finalization point for foreign contractors using the direct method is upon the termination of the contractor agreement.
When is Foreign Contractor Tax to be paid?
According to Article 1, Circular 103/2014/TT-BTC, the applicable subjects for Foreign Contractor Tax are specified as follows:
Applicable Subjects
The guidelines in this Circular apply to the following subjects (except as specified in Article 2, Chapter I):
Foreign organizations doing business with a permanent establishment in Vietnam or without a permanent establishment in Vietnam; foreign individuals doing business categorized as residents in Vietnam or non-residents in Vietnam (hereinafter commonly referred to as foreign contractors, foreign subcontractors) doing business in Vietnam or having income generated 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 agreement.
Foreign organizations and individuals supplying goods in Vietnam in the form of on-spot import and export having income generated in Vietnam based on contracts signed between foreign organizations or individuals and enterprises in Vietnam (except for cases of processing and returning goods to foreign organizations or individuals) or distributing goods in Vietnam, or supplying goods under delivery conditions of international commercial terms - Incoterms where the seller bears risks related to the goods until they enter the territory of Vietnam.
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Thus, Foreign Contractor Tax is to be paid by individuals and organizations under the following circumstances:
- Foreign organizations or individuals doing business with or without a permanent establishment in Vietnam.
- Foreign organizations or individuals supplying goods in Vietnam in the form of on-spot import and export having income generated in Vietnam based on contracts or distributing goods in Vietnam, or supplying goods under delivery conditions of international commercial terms - Incoterms.
- Foreign organizations or individuals undertaking part, or the entirety, of business activities distributing goods or supplying services in Vietnam.
- Foreign organizations or individuals through Vietnamese organizations or individuals to negotiate and sign contracts in the name of foreign organizations or individuals.
- Foreign organizations or individuals exercising export, import, and distribution rights in the Vietnamese market, purchasing goods for export, selling goods to Vietnamese traders per commercial law.
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