• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/17/2014

Vietnam - Expanded foreign contractor withholding tax regime 

August 17: Vietnam’s Ministry of Finance issued Circular 103/2014/TT-BTC (6 August 2014) as guidance concerning the foreign contractor withholding tax regime.

Circular 103 is effective 1 October 2014, and extends the foreign contractor withholding tax rules to additional entities such as:

  • Foreign entities and individuals distributing or supplying goods in Vietnam under terms whereby the seller bears the risk during delivery of the goods within Vietnam
  • Foreign entities and individuals who remain owners of the goods being supplied, bear the costs of distribution, marketing, and advertising, are responsible for the quality of goods / services, and have the authority to establish the selling price
  • Foreign entities and individuals who conclude contracts in their names via authorized Vietnamese entities or individuals
  • Foreign entities and individuals who exercise their import / export rights, distribution activities in Vietnam, and trading goods for export or selling goods to Vietnamese merchants

The circular also defines certain business arrangements that are not subject to the foreign contractor tax regime.

Read an August 2014 report [PDF 504 KB] prepared by the KPMG member firm in Vietnam: Circular 103 on Foreign Contractor Withholding Tax

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