Foreigners earning incomes from providing services in Vietnam, what are their tax liabilities? Income earned by foreigners from rendering services in Vietnam is taxed in Vietnam regardless of their residence status. However, the tax implications are different depending on various factors that are specified in this article to help the foreigners to comply with the tax regulations in Vietnam as well as mitigate the risks of additional tax, penalties and interests on late tax payment. Regulation on residence status in Vietnam According to the current tax regulation, an individual is regarded as a Vietnamese tax resident if: Being present in Vietnam for a period of 183 days or more within one western calendar year or 12 consecutive months from the date of first arrival in Vietnam; or Having a registered place of “permanent residence” in Vietnam; or Having a rented house (including hotels, guesthouses, motels, offices) with a lease term of 183 days or more in a tax year. In … [Read more...] about Foreigners earning incomes from providing services in Vietnam, what are their tax liabilities?
Declared services in service tax
The liquidation of a Vietnamese legal entity is a lengthy and complicated process in which the final tax audit involves a lot of effort from the dissolving entity. This article is to provide a list of key and common issues, which are frequently challenged by the tax authorities during a tax audit upon dissolution for the enterprises’ perception and compliance in order to mitigate the risks of additional tax liabilities, penalties, and interest on late tax payment. There is a lot to consider when liquidating a company, with tax issues a major issue General procedures of liquidating a company The voluntary dissolution procedures of a company include the following steps with relevant parties and regulatory authorities: Resolution on dissolution to be passed by investors, disclosed to relevant stakeholders and announced publicly in the newspaper; Terminating contracts (with customers, suppliers, landlord, etc.) and liquidating assets; Settling liabilities in accordance … [Read more...] about Liquidation of a Vietnamese entity—critical tax exposures
Handing over the right of prosecution and investigation to tax authorities may halt tax evasion? Authorities powerless in face of tax evasion by foreign firms In reality, despite the fact that foreign firms are acquiring massive annual revenue and profit from their operations in Vietnam, the local government faces difficulties in collecting tax from them, as could be seen with the examples of Uber and booking sites Agoda, Booking.com, and Traveloka. A number of these enterprises have been delaying tax payments, while others took advantage of loopholes to evade tax obligations. Notably, in late January 2017, the Ministry of Finance (MoF) asked booking sites that allow tourists to book hotel rooms in Vietnam to calculate and pay VAT and CIT. Targeted websites include Agoda, Traveloka, Booking, and Expedia. The CIT rate is 5 per cent of the total revenue. VAT is calculated on the added value that the companies, called “the foreign contractor” by the ministry, make. MoF … [Read more...] about Extending mandate of tax authorities may halt tax evasion?
VietNamNet Bridge - Under a proposal by the Ministry of Finance (MOF), the payment for cross-border services will be made through the national payment portal NAPAS, a unit belonging to the State Bank (SBV). The payment for cross-border services must be made through NAPAS This will allow taxation bodies to control revenue from services and to ask foreign institutions to pay tax. MOF, which is drafting the amended Tax Management Law, has asked all relevant agencies to tighten management over e-commerce activities and fight against the loss of revenue from tax collections. The State Bank has been asked to set up a regulation which forces all the payments for cross-border services to be made via NAPAS. Foreign network operators in Vietnam will be asked to set up divisions or representative offices in Vietnam to closely coordinate with Vietnamese state management agencies. MOF has also asked MIC (Ministry of Information and Communication) to work with them and ask foreign … [Read more...] about Finance Ministry vows to tighten management of cross-border services
The Ministry of Finance (MOF) wants the State Bank of Vietnam (SBV) to instruct commercial banks to withhold taxes from transactions with Facebook and Google, but SBV said it is not authorized to do so. Ministries disagree on solutions to collect tax from Google, Facebook MOF has vowed to collect tax from Google’s and Facebook’s earnings in Vietnam, and is drafting a regulation on tax management over e-commerce activities. Under the draft regulation, cross-border services must make payments via the national payment portal NAPAS. This will allow taxation agencies to control revenue from services to collect taxes. The tax payments will be carried out under the withholding mode. Tax amounts will be deducted from revenue when making payments via NAPAS. SBV’s Governor Le Minh Hung said MOF has the legal right to issue regulations, guide tax declarations, and report and collect tax. SBV doesn’t have the right or skills in this field. Under current laws, … [Read more...] about Ministries disagree on solutions to collect tax from Google, Facebook