OFFICIAL LETTER 1797/HYE-QLDN3 ON VAT DEDUCTION AND COST RECORDING FOR FOREIGN CONTRACTOR TAX EXPENSES BEFORE ESTABLISHING A LEGAL ENTITY
Official letter 1797/HYE-QLDN3 on VAT deduction and record expenses for foreign contractor tax expenses before establishing a legal entity as follows:
In case, before establishing the Company, the founders authorize an organization or individual to pay on their behalf certain expenses related to the establishment of the Company, purchase of goods and materials:
Regarding VAT: The Company is allowed to declare and deduct input VAT according to the VAT invoice under the name of the authorized organization or individual, meeting the conditions specified in Clause 3, Article 24, Article 25, Decree No. 181/2025/ND-CP dated July 1, 2025 of the Government; Article 14, Article 15 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance.
Stipulated in Clause 3, Article 24 of Decree No. 181/2025/ND-CP dated July 1, 2025 of the Government; Clause 12, Article 14 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance does not apply to VAT payment documents on behalf of foreign parties.
Regarding deductible and non-deductible expenses when determining taxable income for corporate income tax, the provisions of Article 6 of Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance (amended and supplemented in Circular No. 119/2014/TT-BTC, Circular No. 151/2014/TT-BTC, Circular No. 96/2015/TT-BTC dated June 22, 2015) are implemented.
Regarding the responsibility for tax declaration and deduction: In case the foreign supplier does not meet the conditions for direct tax declaration in Vietnam as prescribed in Article 8, Section 2, Chapter II of Circular 103/2014/TT-BTC, the Company shall comply with the provisions of Clause 1, Article 81 of Circular 80/2021/TT-BTC and Clause 2, Article 4, Chapter I of Circular No. 103/2014/TT-BTC to implement.
