OFFICIAL LETTER 724/TCT-CS DATED 02 MARCH 2018 OF GDT GUIDING FCT FOR LOAN INTEREST AND FEES PAID TO FOREIGN ENTITY
According to official letter 724/TCT-CS dated 02 March 2018 of GDT:
Under the double taxation avoidance agreement, loan interests paid to foreign banks which are exempt from taxation under double taxation treaties shall be exempted from the tax payable by contractors in Vietnam. However, other expenses to be paid to the foreign bank, such as capital arrangement and commitment fee, are separate amounts not included in the loan interest, the company in Vietnam shall have to declare and pay Contractor tax on behalf of foreign banks. The company in Vietnam is entitled to deduct the VAT paid on behalf of the foreign contractor and may account the CIT payable by the contractor on behalf of the deductible expenses when calculating the CIT if other expenses are payable to the foreign bank. Including contractor tax.
