This document provides guidance on determining and calculating tax on remittance of income abroad for investors based on the amount of income they wish to transfer and the applicable tax rate. The General Department of Taxation requests local Tax Bureaus to notify enterprises of this regulation.
Key points
- Investors → must pay tax on remittance of income abroad based on the amount of income transferred out of the country as per Article 1
- The tax rate for tax on remittance of income abroad is specifically determined for each Investor according to Article 1
- The actual amount transferred abroad after deducting tax → equals the initial transfer amount minus the tax payable according to Article 1
- Provincial and centrally-administered city Tax Bureaus → guide enterprises to implement in accordance with Circular No. 74 TC/TCT and Circular No. 89/1999/TT-BTC as per Article 2
🌐 Social impact of this document
- Enterprises with income remitted abroad → must pay tax, contributing to the state budget
- The state budget → increases revenue from tax on remittance of income abroad
- Investors → bear a financial burden due to additional taxes when remitting income abroad
❓ Frequently asked questions
How is the tax rate for tax on remittance of income abroad determined?
The tax rate for tax on remittance of income abroad is specifically determined for each Investor according to Article 1.
What is the actual amount transferred abroad after deducting tax?
The actual amount transferred abroad after deducting tax equals the initial transfer amount minus the tax payable according to Article 1.
What are the responsibilities of Tax Bureaus in guiding enterprises?
Provincial and centrally-administered city Tax Bureaus → guide enterprises to implement in accordance with Circular No. 74 TC/TCT and Circular No. 89/1999/TT-BTC as per Article 2.
What do enterprises need to do to comply with the regulations on tax on remittance of income abroad?
Enterprises must follow the guidance of Provincial and centrally-administered city Tax Bureaus and pay tax on remittance of income abroad according to the regulations.
Full text
GENERAL DEPARTMENT OF TAXATION
To: Provincial and Municipal Tax Bureaus under the Central Government
under the Central Authority
Recently, the General Department of Taxation has received inquiries from some enterprises and local tax bureaus regarding the determination of withholding tax on income repatriation overseas. In response to this issue, the General Department of Taxation provides guidance as follows:
According to Circular No. 74 TC/TCT dated October 20, 1997, and Circular No. 89/1999/TT-BTC dated July 16, 1999 issued by the Ministry of Finance, withholding tax on income repatriation overseas must be calculated based on the amount of income that investors receive and intend to transfer abroad, including the withholding tax itself.
For example: Investor A intends to transfer VND 100 million in income abroad. Assuming the withholding tax rate for Investor A is 5%, then the withholding tax on income repatriation overseas that Investor A must pay is: VND 100 million x 5% = VND 5 million. Therefore, the actual amount of income transferred by Investor A (after deducting tax) is VND 95 million.
We request all Tax Bureaus to guide enterprises to comply with the above regulations.
DISTRIBUTION:
- As above
- Representatives of the General Department of Taxation in southern provinces
- Departments under the General Department of Taxation
- To be filed HC, NV5
DIRECTOR OF THE GENERAL DEPARTMENT OF TAXATION
ASSISTANT DIRECTOR OF THE GENERAL DEPARTMENT OF TAXATION
Truong Chi Trung
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