How to declare and pay taxes on foreign contractors

Post time: 06/11/2013

This is one of the problems many businesses are interested in making declaration and payment of foreign contractors.

Answer questions Hyundai Engineering & Construction Company Co.Ltd of declaration and payment of cash advances , General Department of Taxation (GDT) guidelines :

In paragraph 3 of Article 18 of Circular No. 28/2/2011 dated 28/2011/TT-BTC of the Ministry of Finance guiding some articles of the Law on Tax Administration regulations on VAT , corporate income tax for foreign contractors :

Foreign contractors and subcontractors foreign direct implementation of VAT by the credit method , income tax at the rate of % of the revenue tax filing , tax finalization declaration dossiers to tax agencies directly inside of Vietnam .

a) Declaration of VAT by the credit method prescribed in Article 10 of this Circular .

b ) Income tax return at the rate of % of its revenue is generated for each time when foreign contractors receive payment and finalization at the end of the contract

In case of foreign contractors receive payment several times during the month , you can sign up for monthly tax declaration instead of the time of filing . "

Pursuant to the above provisions , the case of Hyundai Company is a foreign contractor to build the project the Mong Duong 1 Thermal Power Plant under contract number 150 911 ADB/MD1-TPIP.EPC dated 15/9/2011 , payment of VAT by the credit method , income tax at the rate of % of the sales tax , in the contract it signed with the company Hyundai Vietnam Vietnam regulated parties to pay an advance amount by rate% of contract value to the company Hyundai contract performance , the Company is responsible Hyundai declare and pay tax on this amount as prescribed in advance .

Where the Hyundai company received advance payment several times during the month , you can sign up for monthly tax declaration instead of opening times incurred by cash advance.

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