Circular No. 26/2004/TT-BTC guides the implementation of regulations on tax on profit repatriation abroad and corporate income tax refund for reinvestment by foreign investors. This Circular applies to economic organizations or individuals from foreign countries operating in joint ventures, wholly foreign-owned enterprises, and cooperation contracts under the Law on Foreign Investment in Vietnam.
적용 범위
Foreign investors operating in joint ventures, wholly foreign-owned enterprises, and cooperation contracts according to the Law on Foreign Investment in Vietnam.
핵심 사항
- Foreign investors are not required to pay tax on profit repatriation abroad starting from January 1, 2004, except when there is an international agreement or treaty that differs from this guidance.
- Economic organizations or individuals from foreign countries must file a Declaration for Profit Repatriation before transferring income out of the territory of Vietnam.
- Foreign investors are not entitled to a corporate income tax refund for reinvested profits starting from January 1, 2004, except for projects that have received prior approval documentation for using profits for reinvestment.
- This Circular takes effect fifteen days after its publication in the Official Gazette.
- Foreign investors enjoy tax incentives on corporate income tax as stipulated in the Corporate Income Tax Law No. 09/2003/QH11.
🌐 이 문서의 사회적 영향
- Positive impact: Reduces the tax burden on foreign investors, encouraging them to retain profits for reinvestment in Vietnam.
- Negative impact: May reduce state budget revenue from profit repatriation abroad.
❓ 자주 묻는 질문
Must foreign investors pay tax on profit repatriation abroad?
No, foreign investors are not required to pay tax on profit repatriation abroad starting from January 1, 2004, except when there is an international agreement or treaty that differs from this guidance.
What must foreign investors do before transferring income out of the territory of Vietnam?
Economic organizations or individuals from foreign countries must file a Declaration for Profit Repatriation according to the Appendix attached to this Circular, submitting it to the direct tax authority managing the enterprise in which they have invested capital.
Are foreign investors eligible for a corporate income tax refund when reinvesting?
No, foreign investors are not entitled to a corporate income tax refund for reinvested profits starting from January 1, 2004, except for projects that have received prior approval documentation for using profits for reinvestment.
When does this Circular take effect?
This Circular takes effect fifteen days after its publication in the Official Gazette.
How are foreign investors incentivized with respect to corporate income tax?
Foreign investors enjoy tax incentives on corporate income tax as stipulated in the Corporate Income Tax Law No. 09/2003/QH11.
전문
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MINISTRY OF FINANCE |
SOCIALIST REPUBLIC OF VIETNAM |
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Number: 26/2004/TT-BTC |
Hanoi, March 31, 2004 |
CIRCULAR
Guidelines for Implementing Provisions on Withholding Tax on Dividends Transferred Abroad and Refund of Corporate Income Tax for Reinvestment by Foreign Investors
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Pursuant to the Law on Investment of Foreign Organizations and Individuals in Vietnam adopted by the National Assembly of the Socialist Republic of Vietnam on November 12, 1996, and the Law Amending and Supplementing Certain Articles of the Law on Investment of Foreign Organizations and Individuals in Vietnam adopted by the National Assembly of the Socialist Republic of Vietnam on June 9, 2000. Pursuant to Decree No. 24/2000/NĐ-CP dated July 31, 2000 of the Government detailing the implementation of the Law on Investment of Foreign Organizations and Individuals in Vietnam;
Pursuant to the Law on Corporate Income Tax No. 09/2003/QH11;
Pursuant to the provisions of Decree No. 164/2003/NĐ-CP dated December 22, 2003 of the Government detailing the implementation of the Law on Corporate Income Tax.
The Ministry of Finance hereby issues guidelines for implementing provisions on withholding tax on dividends transferred abroad and refund of corporate income tax for reinvestment by foreign investors as follows:
I. GENERAL PROVISIONS:
1. These Circulars apply to foreign investors permitted to operate in joint ventures, wholly foreign-owned enterprises, and business cooperation contracts established under the Law on Investment of Foreign Organizations and Individuals in Vietnam, which have lawful income from business activities in Vietnam, transfer such income abroad, or use it for reinvestment in Vietnam.
2. In cases where the State of Vietnam or the Government of Vietnam participates in or enters into international treaties, agreements, or commitments with international organizations or other states or governments, and such treaties, agreements, or commitments contain provisions on withholding tax on dividends transferred abroad or refund of corporate income tax for reinvestment different from those set forth in these Circulars, such provisions shall be applied according to the treaties, agreements, or commitments.
II. SPECIFIC PROVISIONS
1. Withholding tax on dividends transferred abroad: As of January 1, 2004, lawful income obtained by economic organizations or individuals from foreign investment in any form as prescribed by the Law on Investment of Foreign Organizations and Individuals in Vietnam, including individuals residing abroad who invest in Vietnam and foreigners residing in Vietnam who invest under the Law on Encouraging Domestic Investment (including the amount of corporate income tax already refunded for reinvested income and income from capital transfers or share purchases), when transferring out of Vietnam or retaining outside Vietnam, shall not be subject to withholding tax on dividends transferred abroad (including profits generated before December 31, 2003). Before transferring profits abroad, economic organizations or individuals must prepare a Declaration for Transfer of Profits Abroad according to the Appendix attached hereto and submit it to the direct tax management agency overseeing the enterprise in which they have invested.
2. Regarding the refund of corporate income tax for reinvestment:
a) As of January 1, 2004, foreign investors using profits earned and other lawful income from their investments in Vietnam to reinvest in ongoing projects or new projects as stipulated in the Law on Foreign Investment in Vietnam will not be eligible for a refund of corporate income tax on the reinvested profits.
b) For projects that have been granted permission for reinvestment by competent state authorities managing foreign investment prior to January 1, 2004, or have received approval for the use of profits to increase investment capital for expanding ongoing projects or reinvesting in new projects, enterprises using profits earned before January 1, 2004 for reinvestment, and having complete documentation as prescribed in Circular No. 13/2001/TT-BTC dated March 8, 2001 of the Ministry of Finance and submitting it to the Ministry of Finance (General Department of Taxation) will be considered for a refund of corporate income tax for reinvestment.
c) As of January 1, 2004, tax incentives for corporate income tax will be implemented in accordance with the provisions of the Law on Corporate Income Tax No. 09/2003/QH11 and related guiding documents.
3. Implementation: These Circulars shall take effect fifteen days after publication in the Official Gazette. During the implementation process, if there are any difficulties, local tax bureaus shall report to the Ministry of Finance (General Department of Taxation) for prompt resolution.
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MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT DEPUTY MINISTER (Signed) Truong Chi Trung |
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