Circular No. 4973/TC/CST regarding the deadline for implementing a 10% tax deduction on payments to individuals with income of VND 500,000 or more per transaction.

LETTER

OF THE MINISTRY OF FINANCE NUMBER 4973 TC/CST ON APRIL 26, 2005
REGARDING THE DEADLINE FOR IMPLEMENTATION OF A 10% TAX DEDUCTION FOR
EXPENSES PAID TO INDIVIDUALS WITH INCOME
FROM 500,000 VND PER TRANSACTION OR MORE

Dear: - Vietnam Vehicle Inspection Agency

- Provincial and Central City Tax Departments

In response to the letter number 312/2005-ĐK dated April 18, 2005 of the Vietnam Vehicle Inspection Agency regarding the deadline for implementing a 10% tax deduction on expenses paid to individuals with income from 500,000 VND per transaction or more, having income from 500,000 VND per transaction or more, the Ministry of Finance provides the following opinion: Article 3.3.1.1, Point 3, Part III of Circular No. 81/2004/TT-BTC dated August 13, 2004 stipulates that the entity paying income has the responsibility to deduct a tax of 10% on total income for payments made to individuals with income from 500,000 VND per transaction or more derived from activities such as agency work; commission earnings; brokerage (including bonuses); royalties, lecture fees; copyright usage fees for inventions, trademarks, works, project remuneration, business association services, board of directors and members' council services, scientific and technical services, information technology services, consulting services, design, architecture, training, performance activities, sports activities, and other taxable payments.

Point 1, Part VIII of Circular No. 81/2004/TT-BTC stipulates: "This circular takes effect fifteen days after its registration in the Official Gazette and replaces Circular No. 5/2002/TT-BTC dated January 17, 2002 issued by the Ministry of Finance to guide the implementation of Decree No. 78/2001/NĐ-CP dated October 23, 2001 of the Government detailing the implementation of the High-Income Tax Law and any provisions contrary to this circular."

Circular No. 81/2004/TT-BTC was registered in the Official Gazette number 35436 on therefore its effective date is from

In reality, during the period from July 1, 2004 to before September 12, 2004, Circular No. 81/2004/TT-BTC of the Ministry of Finance had not yet taken effect, so tax deductions for payments made to individuals were still carried out according to the provisions of Circular No. 5/2002/TT-BTC. Therefore, the implementation of a 10% tax deduction on expenses paid to individuals with income from 500,000 VND per transaction or more will be uniformly implemented nationwide starting from . day. The Ministry of Financehereby informs the Vietnam Vehicle Inspection Agency and Provincial and Central City Tax Departments for their knowledge and implementation.

Ministry of Finance notifiesfor the Inspection Authority and Tax Departments of provinces and cities to be aware of and implement.