Official letter No. 24788/CTHN-TTHT dated July 5th, 2021 of the Department of Taxation of Ha Noi city regarding withholding tax

In case a Vietnamese enterprise buys machinery, equipment from a foreign seller in the form, according to which, the machinery, equipment are distributed to the buyer (the buyer does not carry out import procedure at checkpoint), the buyer shall be subject to 10% withholding tax when buying under this form.

If the machinery, equipment are attached software, the software’s value shall be subject to the tax rate of 10%. If the software’s value cannot be separated from value of the machinery, equipment, the whole value of the contract (machinery, equipment and software) shall be subject to the highest tax rate (it is 10% in this case).