Official Letter (“OL”) No. 11133/BTC-CST dated 21 August 2017 providing guidelines on taxes on income from transfer of futures contract
According to this OL of the Ministry of Finance (“MOF”), taxes on income from transfer of futures contract shall be as follows:
- Value Added Tax (“VAT”): Not subject to VAT
- Corporate Income Tax (“CIT”): For domestic enterprises, income from futures contract transaction shall be subject to CIT; tax assessable income shall be the sum of net profit and loss incurred during the tax assessment period. For foreign contractors, CIT shall be imposed at the rate of 0.1% on the transaction value; particularly, transaction value of the futures contract shall be the settlement value of the futures contract at the tax assessment time, multiplied by the contract’s coefficient ratio, multiplied by number of contracts, multiplied by the initial deposit margin, and then divided by two.
- Personal Income Tax (“PIT”): 0.1% on transaction value, in which the transaction value shall be determined with the same formula as of CIT.
Clearing member in which the individual and foreign contractor open account shall be responsible for withholding and declaring the relevant tax before making payment.
Official Letter No. 48185/CT-TTHT dated 18 July 2017 on the deductibility of PIT expense for global income of expatriate
In OL 48185, Hanoi Tax Department has guided for the case of expatriates being assigned by the parent company to its Vietnamese subsidiary, where the Vietnamese subsidiary shall bear the PIT on global income of the expatriates. According to the OL, provided that there is a provision in the expatriate assignment agreement between the parent company and the Vietnamese subsidiary where the Vietnamese subsidiary shall pay for this PIT of the expatriates, then the relevant tax expense is allowed as deductible expense of the Vietnamese subsidiary.
Official Letter 62112/CT-TTHT dated 14 September 2017 on dependant relief for Personal income tax (“PIT”) purpose
According to this OL 62112 of Hanoi Tax Department, each dependent is only allowed to be registered for one (01) taxpayer for each calendar year. Therefore, same dependent cannot be registered for one taxpayer for few months of the year and then for another taxpayer for other months of that same year. Any change in dependent registration to another taxpayer must only be made at the beginning of the following year by de-registration from the current taxpayer and re-registration to the new one.
Official Letter3438/TCT-TNCN dated 02 August 2017 on employees’ authorizing the company to declare and pay PIT on their behalf
This OL 3438 of the General Department of Tax has provided that, if the individual receives income from both Vietnamese company and parent company in overseas, the individual must directly declare and pay his/her own PIT on income received from parent company to the competent tax authority; at year-end, the individual, if being tax resident in Vietnam, shall carry out the PIT finalization as regulated. The individual, however, can authorize the Vietnamese company to do the tax declaration/payment on his/her overseas income (this must follow the Vietnam’s Civil Code); in such case, the Vietnamese company shall use the individual PIT declaration form as per the prevailing regulation.
Official Letter3706/CT-TTHT dated 24 April 2017 on PIT for Vietnamese labour working abroad
According to OL 3706 of the Ho Chi Minh Tax Department, if a Vietnamese individual is assigned to work for a project abroad and receives per-diem per the company’s policy, such per-diem shall not be included into the individual’s taxable income and the relevant expense is deductible for CIT calculation purpose.
Official Letter3867/TCT-TNCN on PIT relating to company’s support to obtain Temporary Residence Card (“TRC”) and Visa for expatriates
On 25 August 2017, the General Department of Taxation has issued this OL 3867, according to which, if the company pays for the expenses of applying for TRC and Visa for expatriates, the expenses must be included into their taxable income for PIT purpose. As for work permit, since this is a regulatory responsibility of the company when hiring the expatriates, the relevant expenses shall not be considered taxable income of the expatriates and not subject to PIT.