This circular provides guidance on the exemption of value-added tax for foreign currency option transactions and confirms that foreign exchange payment lines do not generate tax liabilities. The Ministry of Finance is also studying the application of withholding income tax on fees and income from these transactions.
적용 범위
Provincial Tax Departments; enterprises conducting foreign currency option transactions
핵심 사항
- Enterprises are exempt from paying value-added tax on foreign currency option transactions (Point 7, Section II, Part A Circular No. 120/2003/TT-BTC)
- Foreign exchange payment lines between Vietnamese customers and banks do not generate tax liabilities
- The Ministry of Finance is studying the application of withholding income tax on option fees and income from foreign currency option transactions
- Enterprises are exempt from value-added tax, reducing business costs
- Tax Departments provide additional guidance on tax payments for transactions related to foreign currency options
- The application of withholding income tax on fees and income from foreign currency option transactions is unclear, causing difficulties in compliance with the law
🌐 이 문서의 사회적 영향
- Enterprises are exempt from value-added tax, reducing business costs
- Tax Departments provide additional guidance on tax payments for transactions related to foreign currency options
- The application of withholding income tax on fees and income from foreign currency option transactions is unclear, causing difficulties in compliance with the law
❓ 자주 묻는 질문
Must enterprises pay value-added tax when conducting foreign currency option transactions?
No, enterprises are exempt from paying value-added tax for this transaction.
Does the foreign exchange payment line between Vietnamese customers and banks generate a tax liability?
No, this payment line is merely an exchange of foreign currencies and does not generate a tax liability.
Has the Ministry of Finance issued specific guidance on applying withholding income tax to option fees and income from foreign currency option transactions?
Not yet, the Ministry of Finance is studying and will issue detailed guidelines in the near future.
전문
LETTER
OF THE MINISTRY OF FINANCE NUMBER 14290TC/TCT DATED DECEMBER 6, 2004 ON TAXES
FOR FOREIGN EXCHANGE OPTIONS TRANSACTIONS
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-->RESPECTED DIRECTORATES OF TAXATION OF PROVINCES AND MUNICIPALITIES UNDER THE CENTRAL GOVERNMENT
The Ministry of Finance has received letters from several enterprises requesting guidance on tax policies applicable to foreign exchange options transactions. Regarding this matter, the Ministry of Finance provides the following opinions:
1. On value-added tax (VAT) for foreign exchange options transactions: Based on the guidelines set forth in Point 7, Section II, Part A of Circular No. 120/2003/TT-BTC dated December 12, 2003 issued by the Ministry of Finance, considering the nature of such transactions, foreign exchange options transactions are not subject to VAT.
2. Regarding foreign currency flows between Vietnamese customers and banks and foreign banks (excluding option fees and adjustments):
These are merely foreign currency exchange settlement flows that do not generate income or additional value, hence no tax liability arises.
3. On withholding income tax for option fees and income from foreign exchange options transactions: Currently, the Ministry of Finance is studying and considering the application of withholding income tax in cases where banks or organizations outside Vietnam have no permanent establishment in Vietnam but generate income from executing foreign exchange options transactions in Vietnam. Therefore, the Ministry of Finance acknowledges the enterprises' requests and will issue detailed guidance documents in due course.
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