Dispatch No. 1387/TCT-CS on 23rd April, 2012 by the General Department of Tax on corporate income tax for foreign contractors
Replying dispatch of China construction holding company on corporate income tax of foreign contractors, GDT comments as follows:
Point 3.1.a Section III, Part B of Circular No. 134/2008/TT-BTC dated 31/12/2008 by the Ministry of Finance stipulating that revenue subject to CIT is the total revenue excluding VAT, not excluding other taxes payable (if any) that the foreign contractor, foreign subcontractors receive. Revenue subject to CIT is calculated including expenses paid by Vietnamese Party on behalf of the foreign contractors, foreign subcontractors (if any).
In 3.1.b2 Section III, Part B of Circular No. 134/2008/TT-BTC guiding the determination of revenue subject to CIT in case foreign contractors sign a contract with the Vietnamese subcontractor or foreign subcontractors pay tax under section II, part B of Circular 134/2008/TT-BTC to assign portion of the value of the work specified in the contract signed with the Vietnamese party, revenue subject to CIT of foreign contractors does not include the value of work, the value of machinery, equipment done by subcontractors Vietnam or foreign subcontractors.
