Official letter 42509/CTHN-TTHT about FCT policy:
Based on the above provisions, in case Company B is a Chinese enterprise (hereinafter referred to as the Foreign Contractor) providing road freight transport services from Vietnam to China and vice versa, with income arising in Vietnam on the basis of contracts, agreements or commitments between the Foreign Contractor and Vietnamese organizations and individuals, it is subject to Circular No. 103/2014/TT-BTC of the Ministry of Finance. In case the Foreign Contractor does not meet the conditions for tax declaration in Vietnam, the Company is responsible for withholding, declaring and paying taxes on behalf of the Foreign Contractor according to the instructions in Articles 12 and 13 of Circular 103/2014/TT-BTC, specifically:
- Regarding corporate income tax: the corporate income tax rate applied to taxable revenue is 2%.
- Regarding VAT: the VAT rate applied to taxable revenue is 3%.
In case Company B provides transportation services that meet the requirements of international transportation as prescribed in Article 9 of Circular 219/2013/TT-BTC of the Ministry of Finance, the VAT rate of 0% shall apply. In case Company B is a Chinese enterprise with income from services provided and consumed outside Vietnam, it is not subject to Circular No. 103/2014/TT-BTC dated August 6, 2014 of the Ministry of Finance
