Slides bài giảng về thuế ntnn (fcwt) phục vụ kỳ thi f6 acca

Scope of RegulationCovers: Foreign entities doing business or earning income in Vietnam via contracts, goods supply, or services.. Example: Vietnamese company paying a foreign contractor

Circular No 103/2014/TT-BTC

Guidelines for Tax Liability of Foreign Entities in Vietnam

Ministry of FinanceVietnam Tax Authority

Effective: October 1, 2014

Purpose: Circular No 103/2014/TT-BTC provides detailed

guidelines for tax obligations of foreign entities doing business orearning income in Vietnam

Effective Date: October 1, 2014, replacing Circular No.

60/2012/TT-BTC

Key Focus: Value-Added Tax (VAT) and Corporate Income Tax

(CIT) for foreign contractors and Vietnamese entities

Why Important?: Ensures compliance with Vietnams tax laws for

international business

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 2 / 30

Legal Basis

Law on Value-Added Tax: No 13/2008/QH12, amended by No.

31/2013/QH13

Decree No 209/2013/ND-CP: Guides VAT implementation.

Law on Tax Administration: No 78/2006/QH11, amended by No.

21/2012/QH13

Decree No 215/2013/ND-CP: Defines Ministry of Finances roles Relevance: These laws form the foundation for tax calculations and

compliance

Scope of Regulation

Covers: Foreign entities doing business or earning income in Vietnam

via contracts, goods supply, or services

Includes: Domestic exports, goods under Incoterms, and services

Regulated Entities: Business Activities

Foreign Contractors/Sub-Contractors: With or without permanent

establishments (PE) in Vietnam, doing business under contracts withVietnamese entities

Goods Supply: Domestic exports or goods under Incoterms where

sellers bear responsibility in Vietnam

Example: Foreign company selling goods to a Vietnamese firm,

delivered in Vietnam

Regulated Entities: Distribution and Negotiation

Distribution/Services: Foreign entities retaining ownership or

responsibility for goods/services in Vietnam (e.g., marketing, pricingcontrol)

Negotiation via Vietnamese Entities: Foreign entities using local

agents to conclude contracts

Import/Export Rights: Foreign entities distributing goods or buying

for export in Vietnam

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 6 / 30

Non-Regulated Entities: Exclusions

Specific Laws: Entities under Investment, Petroleum, or Credit

Institution Laws

Border Deliveries: Goods delivered at foreign/Vietnamese

checkpoints without ancillary services in Vietnam

Example: Goods delivered at Vietnams border with seller responsible

only until delivery

Non-Regulated Entities: Overseas Services

Overseas Services: Services provided and consumed outside Vietnam

(e.g., material handling in Hong Kong)

Specific Services: Repairs, offline advertising, trade promotion, or

training conducted overseas

Warehouses: Goods in bonded warehouses/ICDs for international

transport or processing

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 8 / 30

Foreign Contractors/Sub-Contractors: Those doing business or

earning income in Vietnam

Vietnamese Entities: Organizations/individuals purchasing

services/goods or paying income under contracts

Withholding Duty: Vietnamese entities must withhold VAT and CIT

before paying foreign contractors

Example: Vietnamese company paying a foreign contractor for

services must calculate and pay taxes

Tax Calculation Methods

Declaration Method: Credit-invoice for VAT, declared

revenue/expense for CIT

Direct Method: Fixed rates for VAT and CIT, withheld by

Vietnamese entities

Mixed Method: Credit-invoice for VAT, fixed rates for CIT.

Why Different?: Depends on contractors status and compliance.

Declaration Method: Requirements

Criteria:

Permanent establishment or residency in Vietnam.

Business duration 183 days from contract start.

Compliance with Vietnams accounting practices and tax registration (TIN).

Who Uses?: Established foreign contractors with long-term

operations

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 12 / 30

Declaration Method: VAT

Method: Credit-invoice, allowing input VAT deduction from output

Declaration Method: CIT

Method: Based on declared revenue and expenses.

Legal Basis: Follows Law on Corporate Income Tax.

Process: Contractors report actual profits, taxed at standard CIT

rates

Example: Contractor reports USD 1M revenue, USD 800K expenses,

taxed on USD 200K profit

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 14 / 30

Direct Method: Applicability

When Used?: If Declaration Method criteria are not met (e.g., no

PE, short-term contract)

Responsibility: Vietnamese entities withhold and pay VAT and CIT Simplicity: Uses fixed rates, no need for detailed accounting.

Example: Short-term foreign contractor with no Vietnam accounting

compliance

Direct Method: VAT Calculation

Formula:

VAT payable = Revenue subject to VAT× VAT rate

Revenue Subject to VAT:

Total revenue (VAT-inclusive) + costs paid by Vietnamese entity Excludes works by Vietnamese/declaration-method sub-contractors.

Key Step: Convert VAT-exclusive revenue to VAT-inclusive if needed.

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 16 / 30

VAT Rates

Services, construction (no materials) 5%

Production, construction (with materials) 3%

Other trades (e.g., postal services) 2%

Note: Highest rate applies if contract values are not separated.

VAT Revenue Determination

Inclusions: Total revenue + costs paid by Vietnamese entity (e.g.,

accommodations)

Exclusions: Works by Vietnamese or declaration-method

sub-contractors

Special Cases:

Outbound postal services: Full revenue taxable.

Rentals: Excludes costs like insurance if documented.

Example: Revenue includes contract value + Vietnamese-paid

expenses

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 18 / 30

Direct Method: CIT Calculation

Formula:

CIT payable = Revenue subject to CIT× CIT rate

Revenue Subject to CIT:

Total revenue (VAT-exclusive) + costs paid by Vietnamese entity Excludes works by Vietnamese/declaration-method sub-contractors.

Key Step: Convert CIT-exclusive revenue to CIT-inclusive if needed.

Securities transfer, reinsurance 0.1%

Copyright, hotel/casino management 10%

Note: Highest rate applies if contract values are not separated.

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 20 / 30

CIT Revenue Determination

Inclusions: Total revenue + costs paid by Vietnamese entity.

Exclusions: Works by Vietnamese/declaration-method

sub-contractors

Special Cases:

Airlines: Revenue from tickets, excluding state fees.

Securities: Revenue from sale price.

Outbound postal: Full revenue taxable.

Example: Includes contract value + Vietnamese-paid costs.

Mixed Method: Requirements

Criteria:

Permanent establishment or residency.

Business duration 183 days.

Compliance with Ministry of Finance accounting rules.

Purpose: Combines flexibility of Declaration Method (VAT) with

simplicity of Direct Method (CIT)

Example: Long-term contractor with accounting compliance.

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 22 / 30

Mixed Method: VAT and CIT

VAT: Credit-invoice method (deduct input VAT).

CIT: Fixed rates (per Direct Method).

Advantage: Balances detailed VAT reporting with simple CIT

calculation

Example: Contractor deducts input VAT but pays CIT at fixed rates.

Example 1: Construction Supervision (Direct Method)

Scenario: Foreign Contractor A (Singapore) supervises factory

construction for Vietnamese Company B

Contract: USD 500,000 (VAT/CIT-exclusive).

Accommodations paid by B: USD 50,000.

Duration: 120 days, no Vietnam accounting.

Lesson: Vietnamese entity withholds taxes for short-term services.

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 24 / 30

Example 2: Machinery with Services (Direct Method)

Scenario: Foreign Contractor C (Japan) supplies production line to

Vietnamese Company D

Contract: USD 1M (VAT-exclusive).

Machinery: USD 800,000; Services: USD 200,000.

Duration: 90 days, no Vietnam accounting.

Example 3: Outbound Postal Services (Direct Method)

Scenario: Foreign Company E (Thailand) provides outbound postal

services for Vietnamese Company F

Revenue: USD 100,000 (VAT/CIT-exclusive).

Duration: 60 days, no Vietnam accounting.

Lesson: Outbound services taxable; inbound services exempt.

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 26 / 30

Example 4: Securities Transfer (Direct Method)

Scenario: Foreign Investor G (UK) sells 1,000 shares of a Vietnamese

company

Sale: USD 50,000 (1,000 shares at USD 50 each)

No permanent establishment, no Vietnam accounting

CIT Calculation:

CIT (0.1%) = 50, 000 × 0.001 = 50 USD

VAT: Not applicable for securities transfers.

Lesson: Low CIT rate for securities; Vietnamese securities company

Example 5: Petroleum Services (Declaration Method)

Scenario: Foreign Contractor H (Malaysia) provides drilling services.

Contract: USD 2M (VAT-exclusive).

Input VAT: USD 50,000 (after tax registration).

Duration: 200 days, with permanent establishment and accounting

compliance.

VAT Calculation:

Output VAT = 2, 000, 000 × 0.10 = 200, 000 USD

VAT payable = 200, 000 − 50, 000 = 150, 000 USD

Lesson: Input VAT deductible under Declaration Method; requires tax

registration

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 28 / 30

Purpose: Regulates tax obligations for foreign entities in Vietnam.

Methods: Declaration (detailed reporting), Direct (fixed rates), Mixed

(combined)

Key Role: Vietnamese entities withhold VAT and CIT.

Lessons from Examples: Importance of contract clarity, correct tax rates,

and compliance

Contact Information

For Details: Contact Vietnam Tax Authority.

Reference: Circular No 103/2014/TT-BTC.

Website: Ministry of Finance, Vietnam.

Note: Consult official documents for full compliance.

Ministry of Finance (Vietnam Tax Authority) Circular No 103/2014/TT-BTC Effective: October 1, 2014 30 / 30