Circular No. 07/TC-TCT provides specific guidance on the financial obligations of foreign-invested banks in Vietnam, including turnover tax, profit tax, repatriation tax, import-export tax, land rental fees, and tax registration.
适用范围
Branches of foreign banks and joint venture banks in Vietnam.
要点
- Foreign bank branches and joint venture banks must pay turnover tax at different rates based on specific business activities (6%, 4%, 8%, 15%, and 4%).
- Profit tax is applied at a rate of 25% on profits earned, with no exemptions or reductions.
- Banks must pay repatriation tax according to Article 73 of Decree No. 28/CP dated February 6, 1991.
- Imports of goods for business operations are exempt from import tax, but when sold in Vietnam, they must be declared and the previously exempted tax must be paid.
- Banks must pay land rental fees according to Decision No. 210a TC/VP dated April 1, 1990, and Circular No. 51 TC/TCT dated October 1, 1992, with specific rates determined by the Ministry of Finance.
- Banks must register taxes with the local Tax Department where their headquarters are located.
🌐 本文件的社会影响
- Positive impact: Helps foreign banks understand and comply with their financial obligations, ensuring fairness in the application of laws.
- Negative impact: May impose additional tax costs on banks, particularly with high tax rates such as 15% on foreign exchange and gold, silver, and precious stones.
❓ 常见问题
What is the rate of turnover tax?
The turnover tax rate for specific business activities is as follows: industrial and commercial credit 6%, agriculture 4%, import-export 8%, foreign exchange trading 15%, and gold, silver, and precious stones trading 15%. If multiple activities are conducted, the highest applicable rate will be applied.
Is there any exemption or reduction for profit tax?
There is no exemption or reduction for profit tax. Profit tax is applied at a fixed rate of 25% on profits earned.
What procedures must banks follow when importing goods for business operations?
When importing goods for business operations, banks must apply for tax exemption at the Ministry of Finance with documentation including operating licenses, import quotas, import permits, and customs declarations. After review, the Ministry of Finance will return the original documents.
How must banks pay land rental fees?
Banks must pay land rental fees according to Decision No. 210a TC/VP and Circular No. 51 TC/TCT, with specific rates determined by the Ministry of Finance based on proposals from the banks and local People's Committees.
With which authority must banks register taxes?
Foreign bank branches and joint venture banks in Vietnam must register taxes with the local Tax Department where their headquarters are located.
全文
CIRCULAR OF THE MINISTRY OF FINANCE
Guidelines for the fulfillment of financial obligations
of foreign-invested banks in Vietnam
Pursuant to the Law on Foreign Investment in Vietnam and current tax laws; to facilitate the understanding and compliance with tax obligations to the State of Vietnam by foreign bank branches and joint venture banks in Vietnam, the Ministry of Finance provides specific guidelines as follows:
1. Business income tax.
All foreign bank branches and joint venture banks licensed by the State Bank of Vietnam to operate in Vietnam must pay turnover tax according to the Law on Turnover Tax.
The basis for calculating turnover tax is the total interest income from loans, interest income from deposits, and other revenues from foreign exchange transactions, service fees, and commissions.
The rate of turnover tax for each business activity is specified in Circular No. 59/TC-TCT-CS dated November 2, 1991, issued by the Ministry of Finance, specifically:
Credit to production and business establishments in the industry and commerce sector: 6% of turnover;
Credit to agricultural production and business establishments: 4%;
Credit to export-import trading establishments: 8%;
Foreign currency trading: 15% of the difference between the purchase and sale prices of foreign currencies;
Gold, silver, and precious stones trading: 15% of the difference between the purchase and sale prices of gold, silver, and precious stones;
Other banking activities: 4% of turnover.
In cases where a bank engages in multiple business activities, it must separately account for the revenue of each activity to calculate turnover tax. If the bank cannot separately identify the revenue of each activity, it will be subject to the highest turnover tax rate applicable to its taxable activities.
2. Profit tax.
Foreign bank branches and joint venture banks in Vietnam must pay corporate income tax at a rate of 25% on profits earned, without exemption or reduction as stipulated in Circular No. 66 TT-LB dated October 30, 1992, issued jointly by the Ministry of Finance and the State Committee for Cooperation and Investment.
3. Tax on profit repatriation abroad.
Economic organizations or individuals from abroad investing in foreign bank branches and joint venture banks in Vietnam, who earn profits from these banks, must pay profit repatriation tax when transferring such profits out of the country, as provided for in Article 73 of Decree No. 28 HĐBT dated February 6, 1991.
4. Export tax, import tax.
Foreign bank branches and joint venture banks in Vietnam are exempt from import duties only for goods imported in accordance with standards and quantities for direct use in their operations, as announced by the State Bank of Vietnam for application to all foreign bank branches and joint venture banks in Vietnam. When importing goods eligible for duty exemption, the banks must follow procedures for duty exemption at the Ministry of Finance as specified in Circular No. 432 TC/TCT dated December 30, 1991, issued by the Ministry of Finance.
Documents required for the duty exemption procedure to be submitted to the Ministry of Finance (General Department of Taxation) include:
1. A copy of the operating license issued by the State Bank of Vietnam, both original and duplicate.
2. Import quota issued by the Ministry of Trade, both original and duplicate.
3. Import permit issued by the Ministry of Trade, both original and duplicate.
4. Customs declaration form for imported goods issued by customs, both original and duplicate.
After reviewing the documents, the Ministry of Finance will return the original documents to the bank.
Imported goods that have been exempted from import duties, if sold domestically by the banks, must declare and pay back the exempted import duties.
5. Ground rent.
Foreign bank branches and joint venture banks in Vietnam that lease premises or offices for business purposes or are granted land leases by the state for office use must pay rent for the leased area according to Decision No. 210a TC/VP dated April 1, 1990, and Circular No. 51 TC/TCT dated October 1, 1992, issued by the Ministry of Finance. The specific rental amount for each bank is determined by the Ministry of Finance based on the proposal of the foreign bank branch or joint venture bank and the opinion of the People's Committee of the province or city where the bank's office is located.
While awaiting the proposals of foreign bank branches, joint venture banks, and local authorities' opinions for the Ministry of Finance to determine the specific rental amounts, the tax collection authority will temporarily collect rent based on the guidance provided in Circular No. 51 TC/TCT dated October 1, 1992. Once the official decision is made, adjustments will be made to the collected amount, either by collecting additional amounts or refunding overpaid amounts to the bank.
6. Other taxes and levies not mentioned in this circular shall be implemented according to current laws and the guidance provided in Circular No. 55 TC/TCT/TT dated October 1, 1991, issued by the Ministry of Finance.
7. Tax registration.
Immediately upon obtaining the operating license, foreign bank branches and joint venture banks in Vietnam must register for tax with the local tax bureau where the bank is headquartered (including branches). During their operation, these banks must comply with tax inspections and management by local tax bureaus and the Ministry of Finance (General Department of Taxation).
During the implementation of tax regulations, if any issues arise, banks are advised to report them to the local tax bureau and the Ministry of Finance for resolution.
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