CIRCULAR guide implementation regulations for the form of investment according to the law on foreign investment in Vietnam _ _ _ _ _ _ _ _ _ _ based on the law on foreign investment in Vietnam was the National Assembly of the Socialist Republic of Vietnam passed on 12/11/1996;
Based on the current tax laws and ordinances of the Socialist Republic of Vietnam; the Government Decree detailing implementation of the laws and ordinances of tax;
Pursuant to Decree No. 12/CP dated 18 February 1997 from the Government detailing the implementation of the law on foreign investment in Vietnam;
To base the regulation on foreign bank branches, joint venture banks operating in Vietnam attached to Decree No. 189/dated 15/6/1991 of the Council of Ministers (Government) of the Socialist Republic of Vietnam;
Pursuant to Decree No. 36/CP on 24/4/1997 the Government issued regulation of industrial zones, export processing zones, high-tech zones;
The Ministry of Finance shall guide the implementation of the regulations for the form of investment according to the law on foreign investment in Vietnam as follows: PART ONE GENERAL PROVISIONS i. SCOPE: 1. This circular apply to: the business venture or 100% foreign-owned enterprise to be established under the law on foreign investment in Vietnam.
The joint venture Bank between Vietnam Bank with foreign banks; Foreign bank branches operating in Vietnam.
The business venture was established on the basis of the agreements signed between the Government of the Socialist Republic of Vietnam and foreign Governments. If the agreement contains the rules for tax obligations for other business venture with guidance in this circular shall follow the provisions of that agreement.
The foreign parties involved to cooperate on the basis of a contract (referred to as the foreign party business) under the law on foreign investment in Vietnam.
Particularly for the parties to work on a contract basis of building-business-transfer (BOT), build-transfer-business (BTO), build-transfer (BT) if in regulations issued by the Government have other tax obligations regulations with guidance in this circular shall apply according to the provisions of the regulations.
2. This circular guides the taxes are regulated in the law on foreign investment in Vietnam, the taxes and other financial obligations such as sales tax, special consumption tax, tax, tax, article subjects, resources, ground rent, water, sea ... applicable to enterprises of foreign investment and foreign business parties are made according to the regulations in the text of current legislation of the Socialist Republic Vietnam.
 
II. The WORDING USED in the CIRCULAR are UNDERSTOOD AS FOLLOWS the wording used in the circular have the same meaning with words that have been defined in the law on foreign investment in Vietnam and Decree No. 12/CP dated 18/2/1997 of the Government on Law enforcement detailed regulations on foreign investment in Vietnam In addition, some of the wording in this circular is understood as follows: "Tax Year" means the calendar year beginning on January 1 and ends on December 31 each year. Business case foreign investment and business parties are the Ministry of finance to apply 12 month fiscal year differs from the calendar year, the tax year is the financial year that businesses invested abroad and the foreign party business are allowed to apply.
"The first year of business with interest" is the first fiscal year with interest, not to compensate the loss amounts to be transferred by the year before.
"Contract transactions, the sale not according to market price" is the contract of sale and purchase transactions, are affected by the trade relations are not normal as transactions between affiliated companies.
"Associated companies": the two companies are considered the two companies linked in the following cases: (i) a company has contributed capital or capital stock of another company.
(ii) the two companies jointly bear the direct or indirect control of another company or the two companies together have a capital contribution to other companies.
 
PART TWO GUIDES MADE The TAX RULES TAX I. 1. Taxable object all the gains from any economic activity of enterprises with foreign investment; International business; Venture Bank or foreign bank branches in Vietnam are subject to income taxes, including: income from business activities.
Income from other activities.
2. Tax payers: businesses that have invested overseas, foreign parties, joint venture Bank, foreign bank branch in Vietnam's tax payers.
The case of a foreign investment company at the same time on many businesses or more business cooperation contract, the tax is calculated separately for each business or individual business cooperation contract (each a business or each contract is a taxable object).
3. Determine the taxable income: taxable income in the tax year = total revenues in the year-total expenses reasonable, valid in the year + other businesses that have invested overseas in determining taxable income minus the loss amounts are transferred according to the provisions of article 61 of Decree 12/CP dated 18/2/1997 of government regulation enforcement details The law on foreign investment in Vietnam.
The switch hole is made by turning the entire number of holes of any tax year to year with interest next year incurred losses and profits of the next year to offset losses or to allocate all of the hole of a year to move to the year incurred interest rate as expected by the business. When production started the business, the business must register with the tax authorities performed the transfer method of business losses and make the right method and time to transfer registered losses.
The time switch holes no more than 5 years.
a. Total revenues during the year: the total revenues of the enterprise with foreign investment or foreign party business includes the revenues due to the consumption of products, offer services and other revenues of the enterprises or foreign party in the tax year. The tax authorities have the right to redefine the revenues in case enterprises do not reflect the full or the account currency is not determined on the basis of the contract of purchase and sale transactions, according to the market price.
For business cooperation contract in the form of sharing the proceeds of product consumption is calculated as follows: the product is divided if consumed in the Vietnam market revenues are identified on the product selling price in Vietnam market.
Products are exported to abroad, then split the revenues are determined on the basis of FOB export price of Vietnam at the gate.
The case of foreign parties do not offer price or product consumption product consumption are not made according to the principle of trading according to market price, then the account currency is determined according to the rules against to move his specified in section IV of the third part of this circular.
b. reasonable expenses, valid in the year: expenses related to the taxable income in the tax period of business for foreign investment or foreign party business regardless of the applied accounting regime would, to be determined include the following : b1. Expenses for raw materials, energy, fuel, goods actually used in the production or provision of services.

B2. Salaries, wages and payment of public money wages in nature; mid-shift and allowances, subsidies paid to Vietnam and foreign workers on the basis of labour contracts and/or collective labor agreement consistent with labor law assigned to the enterprise with foreign investment.
B3. Depreciation and cost of repair of fixed assets used for production, provision of services. Fixed assets depreciation rates are determined according to a fixed rate during the whole period of using fixed assets and are consistent with the provisions of decision No. 1062 TC/QD/CSTC on 14/11/1996 of the Minister of finance.
The depreciation of fixed assets exceeded stipulated by the Ministry of finance; the depreciation of the fixed assets depreciation was off, the depreciation of fixed assets not used in operations such as: fixed assets waiting to liquidate or take away venture to establish new joint venture ... don't count on the expenses when determining taxable income.
The case Vietnam-party contributed capital or capital contribution by business value of land use, the depreciation of fixed assets is the value of land use will perform during the period from the time of the business or the business began manufacturing business until the end of time, which Vietnam party.
For example, A business investment are licensed on 3/1/1995 with operating time is 30 years, on Vietnam, which is equal to the value of land use right for 30 years from the date of license; On 3/7/1997 A business started to go into production. As such, the time of depreciation value land use venture capital contribution is 27 years 6 months.
B4. The cost of scientific research, technology, innovation, technological improvements.
B5. The bank fee, the account pays interest on the loan within the loan interest rate ceiling rate by the State Bank of Vietnam announced for domestic loans; the bank fee, loan interest rate charged by the credit contract was the State Bank for foreign loans. If the credit contract has not yet been accepted, the State Bank interest rates and charges are determined according to the actual number of pay consistent with the provisions in the contract of credit but do not overuse the ceiling lending rate by the State Bank of Vietnam announced.
With regard to foreign bank branches or joint venture Bank is interest, a reasonable discount to pay the deposit, loan capital or other financial instruments.
The loan interest expenses related to capital or capital stock, capital (for bank operations) are not calculated into reasonable expenses, valid when determining taxable income.
B6. Costs directly related to the circulation, consume the product or provide the service as the cost of preservation, packaging of goods, shipping, unloading costs.
B7. The funds filed a social insurance fund, medical insurance for workers in the enterprise's obligation;
B8. The cost of liability insurance, property insurance under a contract signed with the Vietnam insurance company or other insurance companies allowed to operate legally in Vietnam (hereinafter referred to as the insurer). For business types of voluntary insurance which, according to international practices, insurance enterprises are choosing where to buy insurance or at the time the insurance needs arise, the insurer has not met the demand arises, the insured business was insured in the insurance company. Insured costs are charged to expense when determining taxable income.
In case of need, the Finance Ministry asked businesses insured the insurer does not meet the needs of international customs or insurance related to the insured. If the business of the foreign insurance does not meet the provisions of the law of Vietnam, the cost of buying insurance not included in costs when determining taxable income.
B9. Postal charges, document printing, the cost of preserving the treasure houses, laboratories; the cost of labor protection, environment protection; recruitment and training costs; the cost of fire prevention, protection.
B10. The costs of purchasing or paying to use the technical documentation, technical services; The cost of technology transfer, copyrights, patents, trademarks according to the contracts of technology transfer, contracts licensed has been the Ministry of science, technology and environment or the competent authority for approval.
B11. The cost for the sessions of the Board of the venture business is consistent with the Charter venture and/or resolution of the Board.
B12. Rent, rents are charged. The case of the rental business, prepaid land lease many years then leasing, rental costs are allocated according to the period of use.
B13. Rent your property, machinery and equipment is charged. Case of long-term rental, the rental amount will be allocated according to the period of use.
B14. The cost to hire a management company charged under the lease management has been the Ministry of planning and investment.
B15. Other expenses not listed above such as the cost of advertising, marketing, promotions are directly related to the business activity of the business, the brokerage Commission. Total expenses do not exceed 5% of the total cost, valid have been listed to determine the taxable income. Particularly for businesses that operate in the field of commercial, total costs to determine the level of control does not include the purchase price of the goods sold.
B16. Taxes, fees and charges with tax (except tax and tax on the transfer of profits abroad).
All the expenses mentioned above must have valid documents, any costs would not have a valid voucher are not calculated into costs when determining the income subject to income taxes.
c. other income: other income of the business for foreign investment and foreign business side include: c1. Interest on bank deposits, the interest rate for the loan (not to mention the business enterprise in the field of credit); variances due to the sale and purchase of foreign currency; variances due to the sale and purchase of securities; the difference in rates (rate disparity own re-evaluation of balance of cash, deposits, money transfers, debts receivable, payable in other currencies ancestry with the currency was allowed to use the accounting does not take on other income).
C2. Interest earned from ownership and use of property of the business losses including the interest rate (the hole) due to liquidation of assets. For the case of the property of the business losses, damaged, measure the subjective cause then the losses related to the assets which are not in accounting profit that must determine the object of compensation according to the mode.
C3. Income from the account already cleared of accounting nowadays claim to be; The debt is charged does not identify the creditors; The income from production and business operations of the year ago missed new discovery.
C4. The benefit obtained by the enterprise's capital contribution.
Gains from trading activities abroad are included in other income to determine the taxable income. For gains from trading activity in wild countries signed the agreement on double taxation avoidance with Vietnam then processed according to the provisions of the agreement.
The benefit after tax gains from the transfer of operations of the business and capital from venture activities, linked to the businesses in the country are not included in other income when determining taxable income.
C5. The other benefit.

d. for the Private business in the field of property such as the rental: rental home, Office or business infrastructure have currency advance of many years, the taxable income of the business income is defined as follows: taxable income for the year (A) = taxable income with revenue collecting money in advance (B) + taxable income from other activities during the year ( C) where: * B = total revenue collect money before-sales tax to be paid for with the revenue collected money before-costs related to the formation of taxable turnover (D) costs related to the formation of taxable turnover (D) are defined for each activity are as follows: d1. The cost of building the infrastructure or the cost of building homes, offices for the housing rental business, Office or business: infrastructure for business activities of infrastructure or housing rental business, the Office is the expenses to build the infrastructure or housing construction costs offices directly related to collect rental area. For the case of hire charge ahead with shorter lease period of time use in minimum time frame using the fixed assets of a annex 1 attached to the decision of the TC 1062/QD/CSTC on 14/11/1996 of the Minister of finance, the construction costs are allocated according to the actual rental period. Businesses can register time limit use of fixed assets consistent with the provisions in point b3 above.
For example, A business function, office rental in 1996 for enterprises B 1,000 m2 rental office in 10 years with the amount of rent is 1.000.000 USD, C 1,000 m2 rental business for 30 years with the amount of USD 3 million and hire 1,000 m2 D business for 30 years with the amount of USD 3 million. Suppose the cost of construction for Office 1m2 for lease is $1,250, the minimum time of use of the House type solidly under the provisions of annex 1 attached to the decision of the TC 1062/QD/CSTC is 25 years, construction costs for distribution of cases is determined as follows (assuming A business register time depreciation of buildings is 25 years) :-as for the turnover for the enterprise B, office rental, construction costs are allocated to determine the taxable income in 1996 is: 250 USD/m2 1,000 m2 x building cost = x 10 years = 500,000 USD For 25 years with revenues for the business C D office rental business and, construction costs are allocated to determine the taxable income is : construction cost = ($ x 1,000 1,250 m2) x 2 = 2,500,000 USD in case tax has the program been the actual construction costs, the costs of this category has been determined on the basis of cost estimation according to the technical and economic Prize allocation for cash rental area. When completed the finalization works will recalculate the cost to build under the reality, any difference between the actual construction costs and the costs to be adjusted according to the business results of the fiscal year next year complete works.
D2. Other expenses incurred in the year for the allocation of revenue collect the money in advance, specifically: the costs arising in the year distributed a total of other expenses incurred in the tax year for revenue revenue = x currency currency money ahead of the revenue generated in the year the money before the event that the business of infrastructure , rental homes, offices are in time are entitled to incentives, the taxable income of the business cash advance (B1) are identified as the following: B1 = B x number of years number of years number of years collecting-collecting money in advance before the money tax free in it: five are tax = number of years tax exemption under the investment license-number of years from the business year with interest two years tax breaks are in a year tax free income from other activities (C): C = revenue obtained from other activities-sales tax to pay for other activities-charges + other income including: costs do not include the cost of building the infrastructure.
Other expenses incurred in the tax year excluding costs already allocated to calculate for revenue collecting money in advance.
In the time domain, reducing income taxes, interest from other activities handled tax exemptions to normal. The case of the other activities arising from this hole the hole are compensated with income from the sales collect money in advance to determine the taxable income in the year.
For example, With the above example, A business outside the Office rental revenue for businesses B, C, D in 1996 business also gained revenue from other operations is $500,000, the cost incurred in the year not counting construction cost and sales tax is $300,000. Assume domain A is business income taxes 2 years since with interest and 50% in the next 2 years. A business investment license in 1993, the duration of operation of the business is 40 years and before 1996, the business is not yet profitable. The determination of the taxable income of A business are as follows: taxable income for the previous charge rental revenue: for Office rental income revenue from the enterprise B:-total revenue to collect money before the rental is 1.000.000 USD-construction cost of US $500,000 was allocated $300,000 for other cost-allocation = x 1,000,000 = $40,000 USD 7.5 million USD sales tax to be paid for with the revenue earning money previous: 1.000.000 USD x 4% = $40,000 the number of years A business tax exemption is: 2 years + 2 years x 50% = $1,000,000 in income for 3 years-$ 30-40,000 USD tax = x (10-3) rest 10 = $294,000-tax exempt income is: $126,000 for the rental income revenue from C and D enterprises total revenue:-rent collect money in advance is: 6 million USD-construction cost of US $2,500,000 $300,000 is allocated-other costs allocated 6 million USD = 240,000 = x USD 7,500,000 USD sales tax to be paid for with revenues of US $6 million advance: money x 4% = $240,000 in business A tax exemption is : 2 years + 2 years x 50% = 3 year return on 6 million USD-$ 2.740.000-$ 240,000 = taxable



 




x (30-3) rest 10 = $2,718,000 Of tax exempt income is: $302,000 of taxable income other revenue other revenue:-of A business: $500,000-sales tax payable: $20,000 – cost allocation = 240,000 = 20,000-40,000-300,000 USD-taxable income = 500,000-20,000-20,000 = $460,000 in 1996 the entire return is not filed income taxes.
As such, General back in 1996 A business must pay income taxes on the total taxable income is: $3,012,000 and are exempt from income tax on the total taxable income is: $888,000.
The method of calculating the taxable income mentioned above are used to tax for the business infrastructure, export processing zones, the business enterprise infrastructure industry, the business office, house rental (not including the hotel business) of the previous fiscal year. Particularly for the case of the business infrastructure of the industrial zone years ago had made the tax settlement as stipulated in the circular of 27 TC/CSTC on 25/5/1996 of the Ministry of finance did not have to adjust again. The difference between settlement data and figures on the way here was adjusted in the financial settlement in 1997.
4. Identify tax: tax Number must submit tax year = taxable income x tax rate tax which a taxable income: income is determined as defined in point 3 above.
Income tax rates are specified in the investment license. The case of the investment license is not specified then the income tax applicable tax rate tax of 25%.
During operation if the business foreign investment or foreign party business does not meet the standards to enjoy the preferential income tax rate and tax exemptions provided for in articles 54 and 56 of Decree No. 12/CP dated 18/2/1997, the Government's local tax agencies to immediately report to the General Directorate of taxation and granting agencies investment tax rates and to the incentives included in the investment license.
5. income tax procedure: tax was temporarily collecting a 3 month period beginning from the first day of the tax year, or tax year ends at the end of the contract currency according to the actual settlement.
For the business cooperation contract less then a year income taxes be filed 2 States, States temporarily in the middle of the first term of the contract, the contract will expire according to the actual settlement.
For business cooperation contracts in the investment license by the licensing authorities the investment level has prescribed the method of determining the business results or the method of calculating individual income tax tax calculation is performed as defined in the investment license.
Slowly for 5 days from the end of the above mentioned tax, businesses invested abroad or foreign parties must establish business income tax return (form No. 1 attached) submitted to the tax authorities at the local headquarters of administrative things, and make tax payment to the State Treasury according to the notice of the tax authorities. Within 5 days from receipt of the Declaration, the tax agency released announcing tax send tax payers.
The case too prescribed time limit filed declarations that business or foreign party business does not file a tax return, the tax authorities have the right to determine the tax amount temporarily paid and tax notices and releases treats slow paying penalties.
Least 5 days (working days) from the date of the notice of tax agencies, tax business for foreign investment or foreign parties must fully business tax according to the notice on the State Treasury by the tax authorities.
The latest is after 90 days from the end of the financial year, businesses invested abroad or foreign business parties must file an annual income tax return along with accounting reports have been audited by an independent auditing organization is allowed to operate in Vietnam for the tax authorities in the area local to the main operating headquarters at the same time make the missing income tax filing (if available) into the State budget according to the tax notice of tax authorities.
6. Income Tax Refund due to reinvestment: a. foreign investors taking profits are split to reinvest into the business for foreign investment which in the license regulations apply a tariff preferential income tax: 10%, 15%, 20% for a time or the whole duration of the project will be the Ministry of finance refundable in part or whole tax return was filed regarding number of reinvestment of profits, if there are enough conditions specified in point 1 Article 59 Decree No. 12/CP. tax refund Level due to reinvest as follows: 100% if the investment in the project applies a tariff of 10% tax.
75% if the investment in the project applies a tariff of 15% income tax.
50% if from into the project applies a tariff of 20% income tax.
The case of foreign investors taking profits are split to reinvest into the project was licensed to invest before the November 23, 1996, the income tax refund level due to reinvest as follows: 100% if the investment in the project to apply the income tax level is 14%.
75% if the investment in the project to apply the income tax rates of 15% to 20%.
50% if from into the projects apply a tariff tax 21% to below 25%.
The case of foreign investors taking profits divided by the year before 1996 to reinvest from 3 years or more and has been the Ministry of planning and investment granted licenses to adjust or the decision to agree to permit reinvestment in Vietnam before October 23, 1996, the tax refund rate is 100%.
b. the number of income tax refund for the reinvestment of profits are defined as follows: L Th = x S x T 100%-S in that: Th: is the number of tax refund.
L: is the number of the profits be divided after has filed income taxes bring reinvestment.
S: is the tax benefit recorded in the investment license.
T: Is the rate of tax to be refunded according to the rules mentioned above.
c. complete tax procedures income reinvestment: in order to return the number of tax already paid for the reinvested profits, foreign investors or who is authorized to present fully the following documents to the tax authority at the local headquarters of the main operating business : complete application or dispatch income taxes due to rollover. Simple content must specify the name, address, account number of beneficiary tax refund money to reinvest.
Commitment to use the profit to reinvest from 3 years or more of foreign investors.
The investment license (certified copy) or adjustment by the Agency license granted the investment license, which explicitly allows the owner to use the profit is split to reinvest and owner meet eligible for tax refund due to rollover.

Certificate of foreign parties have enough capital of the Board with respect to the business venture or confirmed by the audit authority for the business 100% foreign-owned or foreign parties. (Original or certified copy).
Declaration about profits reinvested (in the form of 2 enclosed).
The vouchers have business tax (copy) and confirmed by the State Treasury on enterprise income tax already paid.
When getting full of documents mentioned above, the local tax authorities inspect, determine the number of submitted income tax of enterprises and tax number was returned to the owner, and then send the application for tax refund on the Ministry of Finance (budget) to the Finance Ministry to review the decision before charged to investors.
Within 30 days of receiving the application, the Finance Ministry announced its decision for investors.
The case does not make investors reinvested the investors must submit pay income tax portion of the budget has been done including interest calculated from when the investor received the amount of the tax refund to the investor is repaid to the budget a tax amount to be done above (calculated according to the interest rate of bank deposits) and dealt with according to law.
 
II. TAX On The TRANSFER Of PROFITS ABROAD 1. Taxable subjects: profits that foreign economic organizations or foreign individuals are obtained due to the capital investment involved in any manner specified in the law on foreign investment in Vietnam including the income tax amount to be repaid for the reinvestment of profits and profits are due to the transfer of capital when it moved out of the territory of Vietnam or withhold In addition to Vietnam are taxable subject to transfer profits abroad.
With regard to the cases of foreign parties used the profit to be divided in order to pay the debt for the parent company, or use the profits to be divided to spend for the representative office of the parent company in Vietnam, are considered transfer of profits abroad and foreign parties to pay the tax on the transfer of profits abroad.
Foreign economic organizations or foreign individuals have moved profits abroad must declare tax on transfer of profits abroad.
2. Determine the tax: the tax on the transfer of profits abroad must file are determined by the number of profits transferred abroad or considered moving abroad or of the profits that investors retain outside Vietnam (x) transfer of profits tax rate specified in the licence by the licensing authorities the investment level. Case, the investment license is granted is not regulated the transfer tax profits abroad, the transfer tax benefits abroad made according to the provisions of article 57 of the Decree 12/CP dated 18/2/1997 of the Government.
3. tax procedure: tax on the transfer of profits abroad fall under each transfer of profits abroad. Cases of private enterprises hold back profits in addition to Vietnam made the Declaration, currency lodging monthly.
Before the transfer of profits abroad or at the latest on 5 months later for profit use case on the purposes considered as transfer of profits abroad, retained profits outside Vietnam; organizations or individuals abroad to set up the tax return filed for the tax authorities to directly manage business organizations or individuals that foreign capital investment (No. 3 sample attached), and submit the tax according to the Declaration on the State Treasury. Within 5 days of receipt of the Declaration, the tax agency checking, tax calculation if the flaws in the tax return then done release announcements of tax for foreign investors. Foreign investors have filed additional tax liability owed to the State Treasury.
The case too prescribed time limit filed declarations that business or foreign party business does not file a tax return, the tax authorities have the right to determine the tax amount temporarily paid and tax notices and releases treats slow paying penalties.
Least 5 days (working days) from the date of the notice of tax agencies, tax business for foreign investment or foreign parties must fully business tax according to the notice on the State Treasury by the tax authorities.
The State Treasury handed back to taxpayers tax vouchers link 1 transfer of profits to transfer money abroad.
Every year, at the latest within 90 days of the end of the fiscal year, the foreign investor must report the tax authorities directly managed the business about the profit numbers are divided, the use of the profit tax and transfer of profits abroad for profit is divided by the number of years ago. The case of the foreign investor has filed tax transfer of profits abroad, but then not move offshore and are not used for purposes treated as transfer of profits abroad, the State budget will refund of taxes already paid. Application for refund of taxes already paid: tax refund application filed. Simple content must specify the reason please refund of tax already paid; Name, address, account number of units would be tax refunds already paid.
Lists the amount of tax already paid with vouchers paid into the Treasury (copies).
Confirmation of the Treasury about the amount of tax already paid (specify the tax already paid on the chapter, type, account, in accordance with the contents of the budget).
Certified by the tax authorities of a tax number was overpaid and suggested the tax agency's handling of the tax already paid.
Tax refund application submitted to the Ministry of Finance (budget) to the Finance Ministry to check tax refund decision was filed.
 
III. TAX for the TRANSFER of CAPITAL OPERATION of the enterprises with foreign investment of transfer of shares in the venture, the foreign parties in the venture business, 100% foreign-owned enterprises or foreign business parties make the transfer of capital as defined in article 34 of law on foreign investment in Vietnam to make tax filing for transfer operations which according to the provisions of this circular.
The parties to the venture business in Vietnam have incurred capital transfer activities do pay tax according to the instructions in the TC/96 TCT circular 30/12/1995 of the Ministry of finance.
Tax for the transfer activities which include income taxes and tax on the transfer of profits abroad. Specifically: 1. Income taxes: income earned from capital transfer activity is subject income taxes according to the law on foreign investment in Vietnam.
 


Tax payable = taxable income x tax rate of return on capital transfer activities 1.1. Taxable income: income from the assignment shall be determined as follows: taxable income = transfer value-initial value of the stake transfer-transfer costs in it: the transfer value is defined as the total value of the fact that the parties to the transfer are obtained according to the contract of assignment. Transfer case not regulated price paid or value of payments is not determined according to the principle of market value transaction between the sides and lateral transfers are transfers, tax authorities have the right to examine and determine the value of the payment of the contract on the basis of the reference market price and the contract of assignment is similar.

The initial value of the capital transfer is determined on the basis of the books, accounting of capital contributed by investors at the time of transfer which the Board recognized business venture for business venture, or the results of the audit agency audit for business 100% foreign capital , or the parties involved recognize the business fit with the current law of Vietnam.
The case of the owner after the continued transfer of his shares back, the original value of the stake transfer brought each time after that is determined by the value of the contract of assignment before plus the actual value, the additional capital (if any) determined by the principles outlined in this clause.
The cost of the transfer is the actual expenses directly related to the transfer, according to original documents are recognized by the tax authorities. Case of transfer costs incurred abroad, the original document must be a certified agency or independent audit of the water charges.
Transfer costs include: costs to make the legal procedures necessary for the assignee; the fees and charges payable upon assignment; the transaction costs, negotiation, contract transfer ... have proven vouchers.
1.2. income tax: income tax for capital transfer activity is 25%.
The case of foreign investors to transfer funds for Vietnam's State enterprises or enterprises in which the State seized the shares dominated the foreign investors are exempt from tax on capital transfers. The income tax exemption for capital transfer activities by the competent authorities of the medical standards and record in writing to transfer capital.
The case of foreign investors to transfer funds for the Vietnam business is not the business you must submit capital transfer tax with tax rate of 10%.
1.3. Disclosure, filed income taxes on capital transfers: slow for 5 working days from the date of the agency having the authority to transfer capital, equity transfer party or authorized person (including the lateral transfer of capital cases are exempt from income taxes for capital transfer operations) must establish the tax return filed for the capital transfer tax where local authorities business capital investment which transfer (form 4 attached) attached to the contract of assignment, the decision to transfer the capital of the competent authorities, a copy of the decision to establish the enterprises receive capital transfers (if business is Vietnam), certificate of capital and the certificate from the root of the expenses; at the same time filed enough tax into state coffers and send the paper copy of the tax payer for health care standards agencies the transfer of capital.
The case discovered the Declaration, calculating tax not yet accurately, within 10 days (working days) from receipt of the Declaration, the tax authorities to tax notices to taxpayers or ask taxpayers to provide the necessary documentation to determine the correct tax.
 
IV. EXPORT TAX, IMPORT TAX all goods that enterprises with foreign capital and business parties are allowed to export and import through border Vietnam, including goods from Vietnam market selling to enterprises in export processing zones and goods of enterprises in export processing zones in Vietnam market are taxable objects, export, import tax and must pay tax according to the provisions of the law on the export tax, import tax.
1. Exemption from the export tax, import tax: in addition to the cases are tax exemptions specified in the export Tax, import tax enterprises foreign investment and business parties also are tax exemptions under article 63 of Decree No. 12/CP dated 18/2/1997 of the Government. Jurisdiction to review tax free for the case to be tax free under article 63 of Decree 12/CP is defined as follows: based on the investment license, technical-economic explanation of each project, the Ministry of Commerce approved the list of items imported duty-free under the provisions of article 12 of Decree 63/CP dated 18/2/1997 for each business.
Category base duty free imports of the Ministry of Commerce, the Bureau of customs of the city, centrally monitor the import of enterprises. Quarterly the Customs Bureau to gather reports of the Ministry of finance and the General Department of customs, import-export turnover and the number of import-export goods of enterprises invested abroad.
2. Declaration and import-export tax collection: import-export goods of enterprises with foreign investment or foreign parties business was import-export tax exemption in the cases aforementioned, if used on purposes other than the purpose was tax free export, import hefty selling at market, or Vietnam, the Department of commerce must be allowed and must Access the return of import-export tax was waived.
For the import goods at the time of the special consumption tax Law not yet in effect and have to be imported tax free, but when used on purposes other than the original purposes, or sale concessions in Vietnam market at the time of the special consumption tax Law is in effect, then, in addition to access the import tax (according to the current tax rate at the time the visit filed) business foreign-invested businesses or foreign business parties must file both the special consumption tax.
Within 2 days of use to purposes other than the purposes are exempt from import duty, or ceded to sell goods, enterprises or foreign-invested business responsible parties must declare to the Customs Department, the city where the main headquarters of the business , or declare to customs where alienation sells the goods or declare to the Customs the place of registered enterprises imported goods declaration (form No. 5 attached). So the time limit on that is not declared, the business or business parties will be sanctioned under the provisions of the law on the export tax, import tax and special consumption tax Law.
Import tax and special consumption tax collection are determined on the basis of the tax base including tax, rates, tax rates at the time of sale in accordance with the law of the hefty tax, import tax and special consumption tax Law.
In the process of tax collection management enterprises of foreign investment and the business side, the tax administration responsible business oversees the use of import and export goods are tax free, when spotted the hefty case goods were tax free, then, in addition to collecting sales tax under the provisions of the law on turnover tax , Director of the tax Bureau, it was the right decision to visit currency import tax and penalties under the provisions of the law on the export tax, import tax. Access currency amount and fine are handled as follows: number of input tax, special consumption tax (if any) access the currency lodging central budget 100%.
The number of fines and confiscate local budget (the budget): 100% as specified in circular No. 09 TC/TCT on 24/1/1995 of the Ministry of finance.
 
The THIRD FINALIZING The IMPLEMENTATION Of TAX OBLIGATIONS And CHECK The TAX SITUATION In The ENTERPRISE ANNUAL TAX I.

The end of each financial year, the business capital of foreign investment or foreign Party should conduct business calculate the implementation of tax obligations and the tax-settlement reports, submitted to the tax authorities. The annual tax was conducted according to the content specified below: 1. During the period of 90 days from the end of the financial year, the business capital of foreign investment and foreign business parties must submit to the tax authority where the tax register reports the situation of production and business the accounting report, have been audited and the tax-settlement reports (form No. 6 attachment to this circular), and filed the missing tax according to the tax settlement reports (if available) into the State budget.
Businesses that have invested overseas and foreign business parties are not allowed to offset the number of overpaid taxes with this number of underpaid taxes when making the annual tax.
2. Pursuant to the report manufacturing, trading and financial settlement reports of the business, the tax Bureau directly governed city, province recalculated each business taxes are paid in the financial year, and collated with the periodic tax return in the year to determine the validity of the tax return , tax-settlement reports. Case report business tax up inaccurate tax authorities inspecting the business's tax situation.
 
II. CHECK the TAX SITUATION in the ENTERPRISE in the process of tax management for enterprises invested abroad and the foreign side, the tax Department, the city is responsible for inspecting periodically or irregularly tax in business when necessary. at least once a year the tax Bureau to inspect tax situation for the following cases: enterprises are in time are exempt, the tax reduction but report no financial interest.
The business of currency.
The tax-settlement reports, business is incorrect or unclear or tax-settlement reports, incomplete records the targets of tax calculation service.
The enterprise does not submit the tax settlement reports or incorrect filing deadline.
The financial situation of enterprises large fluctuations in tax compared with the previous year.
Other cases within 3 years the tax Bureau to examine a minimum of 1 times.
Before examining the business foreign investment or foreign parties, the tax authorities must have decided to check, which stated the test content and test period. The decision is sent to the enterprise with foreign investment or foreign Party representation business before starting test 3 days. In case of need to check more content with the content recorded in the inspection decision or prolong the inspections tax authorities must have decided to additional checks.
The test results must be established as a technical text of the authorized representative of the business or international business and tax authority representatives conducting the inspection. The minutes of this test the tax authorities have the responsibility to submit to the Ministry of Finance (General Directorate of Taxes) together with the enterprise's accounting report (copies).
Businesses have invested abroad or foreign side business if not agreed with the comments of the tax agency concluded in a check, then has the right to appeal to the General Department of taxation and finance. In the course of pending complaints, businesses or foreign business parties must still implement strictly the conclusion of tax agency has launched.
 
III. TAX when BUSINESSES HAVE FOREIGN INVESTMENT, FOREIGN PARTIES ACTIVE EXPIRY or DISSOLUTION When the parties finish business contract or when the enterprise foreign investment operations expiry of contract or dissolved under the law on foreign investment in Vietnam, the business or business parties must establish financial reporting and tax settlement reports submitted offices where tax registration. The tax authorities need to conduct the following tasks: 1. Perform test report similar tax annual tax referred to in section I above.
2. Identify the rights and responsibilities of each party in the business for foreign investment and business cooperation contracts. The content of this work is: identify about investment of the investor are on account of the business including the monetary capital, fixed assets, materials, goods. Verification for the foreign investor's investment may be transferred abroad.
Determine the interest or entitlement, and the responsibility of the client regarding the amount of interest or holes. Confirm the benefit that the foreign investor is entitled may transfer abroad. Calculate and assign the number transfer tax on offshore profits of the return may be transferred abroad. Number of transfer tax profits abroad will be right for the State budget unless the foreign investor to produce the documents to prove income number that does not move abroad because of one of the following reasons: used to reinvest in Vietnam according to the decision of the licensing authority.
Used for personal spending needs in Vietnam in addition to the other has declared.
Genus used in Vietnam for other purposes.
 
IV. MEASURES AGAINST TRANSFER pricing: to ensure correct determination of the tax obligations of the business, during the periodic inspection or test reports of the business tax, if found to have unreasonable issues about prices or the rate of profit in the transaction between associated companies , tax authorities imposed measures against the transfer price below to determine the correct taxable income of an enterprise: 1. price comparison method in the free market: the tax authorities can use the product, goods, services on the free market to determine for products, goods and services Exchange internal trafficking, between associated companies. Conditions to apply the method of comparing the free-market price: (i) there is no difference between the 2 business compared to affect the trading price and quality of goods, trademarks, conditions of delivery and payment relations or (ii) where there is no difference in the comparison 2 business, you can use measures calculated to eliminate the factors that affect the price of the transaction.
For example, An oil company He's sold to A joint venture enterprise in Vietnam between your company with a company in Vietnam 1200 litres of lubricants with 1500 USD, paid after 6 months. Also at that time, his company sells to business B is independent businesses in Vietnam 1000 liters of lubricating oil with price is 1000 USD with the payment conditions. Suppose the interest rate market trade credit term of 6 months is 10%. While identifying the return of venture companies A tax agency, Vietnam can redefine the oil price in the contract on based on price comparisons under the contract of the company B as follows: the price of a liter of lubricating oil in the form of payment after 6 months: $1,000 + $1,000 x 10% = $1.1 per liter 1,000 liters of oil to the Fixed Price for the contract between the company contact the British company and 1,200 litres of oil x 1.1 USD/liter = $1,320 2. The method used to determine the selling price of the purchase price.
The case has its business units of goods bought on by a Enterprice overseas links provided and cannot identify the actual purchase price on the free market, the tax authorities may use the sales value of the business unit to determine the purchase price according to the following formula :


Purchase price = sales value for independent ENTERPRISE (except for import tax, if any)-ban for XN are independent (except for import tax, if any) x interest rate included an average interest rate of business sector average gross business sector can be determined based on the gross interest rate data of other items of dơn that purchase from independent companies and sell for the independent companies or the rate of interest included of common units of other independent businesses. Gross interest rate is determined by the following formula: net sales-Cost of capital interest rate = gross sales x 100% of net sales (figures based on the reported results of profit/loss of the business).
The method used to determine the selling price of the purchase price will not apply in case of: goods products before selling out to have tools, assemble, renovate, add value to use;
Product goods before selling out to be tied to the trade marks, trade names have a high value on the market.
The time between the time of purchase and the time of the sale that lasted over a year and during that time the market has large fluctuations in price.
For example: A A factory in Vietnam to have 100% of the invested capital from the company B production of wine in France. Enterprises of A monopolistic product consumption of B company in Vietnam market. In 1995 A factory from 10,000 liters of wine, B company have filed tariffs as determined by Customs is 75,000 USD and in the entire consumption of wine with sales conversion is 185,000 USD. End of 1995 tax authorities determine the purchase price on A factory's wine products as follows: revenue = sales-tax = $185,000-$ 75,000 = $110,000 110,000 Sales Price (excluding taxes = $/liter = 11 imported) 10,000 liters of gross interest rate assumed an average wine business is 10%.
The purchase price in USD/liter = 11-11 USD/liter x 10% = $9.9/liter 3. The method uses the entire cost to determine the taxable income.
The case of a unit of production, manufacture and processing of products and the entire interface for integrated link, no products sold on the market to determine the price comparison, the tax authorities can base on bookkeeping accounting costs of the unit to determine the unit's income which according to the following formula : fixed income = the total cost of the entire product x net rate is the average Total cost of production all products delivered in the period = Cost of capital items delivered in the period + delivery costs in the period + cost of general management in the States the average profit rate of manufacturing industry may identified based on net interest rate figures of the independent production companies different.
The net interest rate is determined by the following formula:: net income before net interest rate income tax = price wholesale capital + cost of sale + cost of general management (data based on the reported results of profit/loss of the business).
For example, A garment factory in Vietnam is a joint venture between a South Korean company and a company in Vietnam. The activity of enterprises of A garment is the garment production and delivery of the entire B company in Korea. Suppose A factory in 1995, handed to the company B 10,000 suits with the fixed price is 10 USD/Ministry. Bookkeeping of the enterprise A in 1995 has figures: sales of US $80,000 capital Price delivery costs $6,000 cost of USD 12,000 General Management Of the entire price of US $98,000 industrial A and B companies in Vietnam are two affiliate companies, tax authorities can determine the taxable income are as follows : assuming the tax agency to determine the net rate of an average garment manufacturing industry is 10% of the fixed income = $98,000 x 10% case spotted the disadvantage on price but no conditions apply the measures above, the notice to produce business related vouchers and business requirements with a written guarantee the legality of the vouchers have provided. Why send the relevant documents about the General Directorate to carry out the exchange of information with the tax authorities of the country.
 
The FOURTH PART the CURRENCY LODGING TAX and OTHER INSTRUCTIONS i. TAX MONEY: The enterprise with foreign capital and foreign parties had business taxes are filed according to instructions in the second part of this circular was filed taxes in Vietnam or in foreign currency are the Ministry of finance accepted.
The rules change from foreign to numb same Vietnam or vice versa is done according to the exchange rates by the State Bank of Vietnam announced at the time of payment.
The budget revenues from the business for foreign investment are accounted into the contents of the budget according to the current rules.
 
II. The RESPONSIBILITY of the BUSINESS to FOREIGN INVESTMENT and FOREIGN BUSINESS SIDE: 1. Slowly for 5 days from the start of the deployment of investment licenses or dissolved, or change items or change the location of the operating headquarters, the business, the business of the business dependent on foreign parties or business must register with the procedures the tax agency, the city where the operating headquarters (form 7 enclosed).
2. In the process of production, business activities must strictly observance the rules of tax declaration.
3. Present the full range of bookkeeping, accounting and in materials related to tax calculation and tax when the tax agency requirements.
4. Payment in full, on time.
 
III. Responsibility And AUTHORITY Of The TAX AUTHORITIES 1. Guide to the tax payers make tax registration and tax declaration according to the prescribed regimes.
2. check the tax return, check books, accounting documents and the documents necessary for the calculation of taxes, have the right to request submission of the n objects to answer unclear issues related to tax calculation.
3. Tax calculation, tax notices for tax payers. Have the right to assign tax in case the taxpayer does not self declaration deadlines specified or incorrect declaration.
4. Set the minutes and treated for tax violations in the jurisdiction are regulated by law.
5. Responsible enforcement of the tax law of adjustment, ensure the integrity, accuracy and objectivity.
6. check the implementation of registration and accounting mode of business and to check the implementation of the registered accountant mode.
7. Confirm the taxes already paid by the foreign investor in the case of the foreign investor demand.
 
IV. PROCESSING Of COMPLAINTS And INFRINGEMENT 1. The violation of tax legislation will be sanctioned as follows: Not done properly the provisions on tax registration as specified in point 1 section II, the fourth part of this circular shall be subject to release under the provisions of Decree No. 22/CP dated 17/4/1996 of the Government on administrative sanctions in the field of taxation.
Not done correctly the provisions on tax declaration shall be subject to a fine as stipulated in the Ordinance on administrative sanctions, Decree No. 22/CP of the Government and the current Guide text.

Man, time counts of tax money then suffer a fine of up to 5 times of tax man, time counts.
Late tax compared to the prescribed time limit shall be subject to penalties, filing slowly every day 0.2% (two per thousand) calculated on the number of tax filing.
2. Authority to handle complaints and violations: the authority to handle the tax offense belongs to the direct tax authorities tax management.
Complaints about taxation of taxpayers by the tax authorities collect taxes directly to consider and resolve. If litigants do not agree with the solution that has the right to appeal to the superior tax offices, the Ministry of finance. The decision dealt with by the Minister of finance is the final decision. While the pending complaint, the complaint is accepted the opinion of the tax authorities have launched.
 
V. IMPLEMENTATION of taxation by the provinces, the city of common responsibility and guide the enterprise with foreign investment and foreign business parties implement strictly the provisions of this circular.
The tax Bureau is responsible for the layout of a force of officers dedicated to manage taxes for businesses that have invested overseas and foreign parties. This dedicated management Department is responsible for monthly, quarterly and at the end of the year are reported to the Ministry of Finance (Tax Administration) about the tax situation and other reports required general management service for enterprises invested abroad and the foreign active business party in charge.
This circular replaces circular No. 51 for TC/TCT on 3/7/1993, circular No. 90 TC, TCT on 10/11/1993 and the related content stipulated in the circular of the TC/96 TCT 30/12/1995 and no. 27 TC/CSTC circular on 25/5/1996 of the Ministry of finance. All previous provisions contrary to the Ministry of finance prescribed in this circular are repealed. This circular effect after 15 days from the date of signing and the effect to make determining the tax obligations in fiscal 1997.