Hong Bang Law is a company with 10 years of experience in consulting in the fields of foreign investment, tax, and finance. We have supported many foreign investors, accompanying them throughout the implementation of investment projects and activities in Vietnam, especially in the field of taxation for contractors.

Contractor tax is one of the taxes applied to foreign individuals and organizations doing business in Vietnam. In order for customers to understand the provisions of the law related to tax for contractors when implementing projects in Vietnam, Hong Bang Law would like to send to customers detailed consulting content on implementation services. This procedure is as follows.

Contractor tax 

Contractor tax is simply a tax applied to “foreign contractors”. Inside:

• Tax: is a compulsory contribution that people have to pay to the state; It is a source of government revenue to maintain general activities for society.
• Foreign contractor: means a foreign organization or individual with civil legal capacity; For individuals, they must also have civil act capacity to sign and perform contracts. The civil legal capacity and civil act capacity of foreign contractors are determined according to the law of the country of which the contractor has a nationality. Foreign contractors can be general contractors, main contractors, joint venture contractors, subcontractors. In short, it can be understood that foreign contractors are foreign organizations and individuals with permanent residence/residence or non-permanent residence/residence in Vietnam, having business activities in Vietnam, or earning income in Vietnam. South on a contract basis.

Thus, the contractor tax applies to foreign contractors having business activities in Vietnam or earning income in Vietnam and includes the above taxes, specifically:

• For foreign contractors being business organizations: The applicable contractor tax includes VAT and CIT
• For foreign contractors who are business individuals: The applicable contractor tax includes VAT and PIT.

Subjects subject to contractor tax

According to Circular 103/2014/TT-BTC stipulating:

• Foreign contractors doing business in Vietnam or earning income in Vietnam on the basis of contracts, agreements, or commitments between foreign contractors and Vietnamese organizations or individuals or between foreign contractors and foreign contractors. Foreign sub-contractors to perform part of the work of the contractor contract.

Thus, to determine whether an object is subject to contractor tax or not, it is necessary to answer the following 3 questions:

• • “Is the transaction related to a foreign contractor?”
  • “Do foreign contractors act as sellers and earn income?”
  • “Do business activities arise in the territory of Vietnam?”

• Foreign organizations and individuals provide goods in Vietnam in the form of on-spot import and export and generate income in Vietnam on the basis of contracts signed between foreign organizations and individuals and enterprises in Vietnam. Vietnam (except for processing and exporting goods to foreign organizations and individuals) or distributing goods in Vietnam or providing goods according to the delivery conditions of international trade terms. – Incoterms that the seller bears the risk related to the goods entering the territory of Vietnam (including the terms DDP, DAP and DAT).

Contractor tax payment deadline

• According to each arising time: no later than the 10th (tenth) day from the date of payment to the foreign organization;
• By month: No later than the 20th of the month following the month in which the tax liability arises

Services provided by Hong Bang Law

When foreign investors first come to Vietnam, there will be many difficulties with the legal procedures and business methods. Understanding language barriers and other difficulties of foreign clients, our lawyers and legal assistants at Hong Bang Law Firm can use English and other common languages fluently when advising clients about the policies, legal procedures, regulations and investment environment in Vietnam. Moreover, the team of lawyers and consultants of Hong Bang Law are equipped with highly specialized knowledge of policies, legal regulations and the investment environment in Vietnam.

Hong Bang Law will accompany clients throughout the process of solving tax problems such as: Register Tax code, Issue Tax Statement, … with consulting and supporting services such as:

• Consulting on issues related to contractor tax and contractor tax declaration;
• Contractor tax consulting services;
• Registration service for granting contractor tax code;
• Service of declaring contractor tax on each arising, monthly basis;
• Contractor tax finalization service;
• Service of confirming contractor tax obligations;
• Service of performing other contractor tax procedures. Processing establishment and execution of authorized transactions, regularly informing on progress and proposing new ideas (note: if there are any adjustments or additions to content, the content of authorization must be made in a new document);
• Handing over the work results after successfully performing the authorized work.

If you need more detailed advice and answers as well as how to access this service, please contact directly the Deputy Director of Sales: Lawyer Nhat Nam via hotline: 0912.35.65.75, 0912.35.53.53 or call the toll free legal consultation hotline 1900.6575 or send a service request via email: lienheluathongbang@gmail.com

Wishing you and your family good health, peace and success!

Best regards!