Công văn 1024/CT-TTHT năm 2017 về chính sách thuế thu nhập cá nhân do Cục thuế thành phố Hồ Chí Minh ban hành

To: Siemens Ltd. VietnamAddress: No. 5B Ton Duc Thang, Ben Nghe Ward, District 1, Ho Chi Minh CityTIN: 0302727641

In response to your document No. 18/2016/Tax dated December 12, 2016 regarding tax policies, Ho Chi Minh City Department of Taxation hereby gives guidance as follows:

Pursuant to the Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance providing guidance on person income tax (PIT):

+ Article 1 stipulates taxpayers as follows:

“…Taxable income is determined as follows:

…

Taxable income of a non-resident is the income earned in Vietnam, regardless of the place where the income is paid and received...";

+ Clause 2 Article 2 stipulates incomes from salaries or wages subject to PIT as follows:

“…

a) Salaries, wages and other cash or non-cash earnings related to salaries or wages.

…”

+ Clause 1 Article 18 stipulates as follows:

 “1. PIT on income from salaries or wages of a non-resident is determined by multiplying total income from salaries or wages by the tax rate of 20%.”

Clause 1 Article 1 of the Circular No. 103/2014/TT-BTC dated August 06, 2014 of the Ministry of Finance providing guidance on tax liabilities incurred by foreign organizations and individuals doing business or earning income in Vietnam (hereinafter referred to as “withholding tax”) stipulates entities eligible to pay withholding tax as follows:

“Foreign organizations either having permanent establishments in Vietnam or not or foreigners being either residents or non-residents in Vietnam (hereinafter referred to as “foreign contractors/sub-contractors”) that do business in Vietnam, or earn income in Vietnam, according to contracts, agreements or commitments made between foreign contractors and Vietnamese entities, or between foreign contractors and foreign sub-contractors, for performing partial tasks of main contracts.”

Pursuant to the Circular No. 92/2015/TT-BTC dated June 15, 2015 of the Ministry of Finance providing guidelines for VAT and personal income tax incurred by residents doing business, amendments to some Articles on personal income tax of the Law No. 71/2014/QH13 on amendments to Tax Laws and the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on amendments to Tax Laws and Decrees on taxation;

Pursuant to the abovementioned regulations, in case your Company enters into contracts or agreements with other foreign companies (of the same corporation) that will then send their experts to your Company in Vietnam, these experts sign employment contracts with and receive salaries from such foreign companies and then your Company will make payment of costs of these experts to such foreign companies, before making payments to such foreign companies, your Company shall deduct, declare and withhold taxes for them according to the Circular No. 103/2014/TT-BTC. Quarterly, these experts (who are non-residents in Vietnam in the tax year) shall directly make declaration and payment of PIT on their salaries paid by foreign companies with a tax rate of 20% according to Form No. 02/KK-TNCN enclosed with the Circular No. 92/2015/TT-BTC dated June 15, 2016, and must not submit PIT statements to tax authorities at the end of year; your Company may submit PIT declarations on behalf of these experts to the supervisory tax authority (but they must themselves complete such PIT declarations).Your Company should comply with the legislative documents referred to herein.

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