The Department of Taxation of Ha Noi city notes that a Vietnamese enterprise shall have to declare, pay tax on behalf of a foreign contractor only when the latter fails to meet the requirements for making direct tax declaration.
In case the foreign contractor meets the requirements for making direct tax declaration in Vietnam according to the regulations at Circular No. 103/2014/TT-BTC, the Vietnamese enterprise shall not withhold and pay tax on behalf of the former.
With regard to value added tax (VAT) in relation to services provided by the foreign contractor, the Vietnamese enterprise may deduct tax if it meets the regulations at clause 1 Article 14, Article 15 of Circular No. 219/2013/TT-BTC (amended at clause 10 Article 1 of Circular No. 26/2015/TT-BTC and Article 1 of Circular No. 173/2016/TT-BTC ).