Uni 06-08-2014 - Guidance on foreign contractors paying tax under the hybrid method

According to official letter No. 2860/TCT-DNL in guidance of foreign contractors paying VAT under deduction method, paying CIT under the ratio % to revenue (the hybrid method):

• Foreign contractors issue VAT invoices, declare VAT at the time of construction acceptance, VAT amounts are converted with the exchange rate at the VAT issuance date. CIT is declared, paid monthly when receiving money form the investors and converted with the exchange rate at the money receipt date. The exchange rate at the time of VAT issuance and paying, declaring CIT can be revised. Foreign contractors base on CIT obligations to reissue the issued VAT invoice without VAT rate.
• Foreign contractors issue VAT invoices  to the investors for the subcontracted value with temporary value. When CIT is determined, the subcontracted value can be revised at the time of subcontractor finalization. The contractors base on the finalized-subcontracted value, reissue the issued invoices and revise the declared invoices. Foreign contractors are not penalty for tax administration violation and pay late payments for the additional payable tax amounts.