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Vietnam 2020 Department of Taxation of Hanoi city - Need to pay corporate income tax when receiving transferred capital from foreign in
Department of Taxation of Hanoi city
Need to pay corporate income tax when receiving transferred capital from foreign investor
Official letter No. 81422/CT-TTHT dated September 7th, 2020 of the Department of Taxation of Hanoi city regarding declaration and payment of corporate income tax (CIT) on incomes from the activity of capital transfer of foreign organizations.
According to point c Clause 2 Article 14 of Circular No. 78/2014/TT-BTC, when the Vietnamese party purchases capital contributions (in Vietnam) of a foreign organization, the transferee has to declare and pay corporate income tax on behalf of the foreign company for the income of capital transfer.
If seller and the buyer of capital contributions in Vietnam are foreign organizations, the tax shall be declared and paid by the enterprise where the capital contributions are transferred.
Purchase price of the transferred capital as the basis for calculation of CIT taxable income from the capital transfer activity is determined according to Article 8 of Circular No. 96/2015/TT-BTC.