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blue-check Regarding tax on incomes from capital transfer of foreign organizations

Official letter No. 69382/CT-TTHT dated September 4th, 2019 of the Department of Taxation of Ha Noi city regarding tax policy relating to activity of capital transfer
Posted: 10/9/2019 3:39:57 PM | Latest updated: 20/9/2019 2:44:00 PM (GMT+7) | LuatVietnam: 4802 | Vietlaw: 425
VietlawOnline

According to Article 14 of Circular No. 78/2014/TT-BTCstatus2 , 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-BTCstatus2 ).

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-BTCstatus2 ).

Ms Phuong Thao (VietlawOnline.com)
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PublishedVietlaw's Newsletter No. 425
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Read more:

nexto  Regarding PIT on incomes from capital transfer earned by a non-resident (1/10/2017) 

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nexto  Regarding EIT on the activity of capital transfer (21/11/2016) 

nexto  Regarding PIT on non-residents’ incomes from capital transfer in Vietnam (23/11/2016)