blue-check Cases in which withholding tax must be withheld before making payments to foreign contractors

Official letter No. 37635/CTHN-TTHT dated October 1st, 2021 of the Department of Taxation of Ha Noi city regarding tax declaration made by a branch located in a province other than the province where the head office is located
Posted: 14/10/2021 1:57:00 PM | Latest updated: 8/11/2021 3:36:49 PM (GMT+7) | LuatVietnam: 5317 | Vietlaw: 536

According to clause 1 Article 5 of Circular No. 302/2016/TT-BTCstatus2 , branches located provinces other than the province where the head office is located shall themselves submit dossiers of licensing fee declaration at their managing tax authorities.

With regard to value added tax (VAT), enterprise income tax (EIT), they shall be concentrated declared at the head office if the braches keep accounting records dependently and do not sell goods. If the braches sell goods and earn revenue, they shall submit the dossiers of VAT declarations at their managing tax agencies (Article 11 of Circular No. 156/2013/TT-BTCstatus1 , Article 16 of Circular No. 151/2014/TT-BTC).

Regarding withholding tax, according to clause 2 Article 4 of Circular No. 103/2014/TT-BTC, a branch shall be responsible for withholding, paying tax on behalf of a foreign contractor in the following cases:

- It buy services, services associated to goods or pays incomes generated in Vietnam on the basis of contractor or subcontractor contracts;

- It buys goods in the form of import, export on the spot or under Incoterms;

- It distributes goods, provides services on behalf of foreign organizations, individuals in Vietnam.

Ms Phuong Thao (
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Published Vietlaw's Newsletter No. 536
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Tax of Contractor