According to Article 14 of Circular No. 78/2014/TT-BTC , when a foreign company transfers its whole capital invested in a Vietnamese company, the former has to pay tax on incomes from capital transfer, even it has no permanent establishment in Vietnam.
If the capital transferee is a an organization/individual in Vietnam, it shall be responsible for withholding, paying tax on behalf of the foreign company (point c Clause 2 Article 14 of Circular No. 78/2014/TT-BTC ).
Notably, if the transfer contract does not specify the payment price or tax authority has grounds to conclude that the payment price is not conformable with the market price, the tax authority may inspect and fix the transfer price (point a Clause 2 Article 14 of Circular No. 78/2014/TT-BTC ).
|Published||Vietlaw's Newsletter No. 425|
Regarding EIT on the activity of capital transfer (21/11/2016)