Circular No. 55/2007/TT-BTC guiding the exemption from personal income tax for foreign experts implementing non-governmental foreign aid programs and projects in Vietnam

CIRCULAR

Guidelines on Exemption from Personal Income Tax for Foreign Experts Implementing Non-Governmental Foreign Aid Programs and Projects in Vietnam

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Pursuant to Ordinance No. 35/2001/PL-UBTVQH10 dated May 19, 2001 of the Standing Committee of the National Assembly on tax on income of high-income individuals (hereinafter referred to as personal income tax);

Pursuant to Ordinance No. 14/2004/PL-UBTVQH11 dated March 24, 2004 of the Standing Committee of the National Assembly amending and supplementing certain articles of the Ordinance on personal income tax;

Pursuant to Decree No. 147/2004/NĐ-CP dated July 23, 2004 of the Government detailing the implementation of the Ordinance on personal income tax;

Pursuant to Decision No. 340/TTg dated May 24, 1996 of the Prime Minister on the issuance of regulations governing the activities of non-governmental foreign organizations in Vietnam;

Pursuant to Decision No. 64/2001/QĐ-TTG dated April 26, 2001 of the Prime Minister on the issuance of regulations on management and utilization of non-governmental foreign aid;

Pursuant to Circular No. 7617/VPCP-KTTH dated December 29, 2006 of the Office of the Government agreeing to exempt personal income tax for foreign experts implementing non-reimbursable aid projects of non-governmental foreign organizations in Vietnam;

The Ministry of Finance provides guidelines on the exemption from personal income tax for foreign experts implementing non-governmental foreign aid programs and projects in Vietnam (hereinafter referred to as PCP aid) as follows.

b) In cases where funds from organizations and individuals within and outside Vietnam are used for victim support work and victim support benefits, such activities shall be carried out in accordance with the regulations of the Ministry of Finance and the donor; in cases where there is no agreement between the donor or their authorized representative and the Ministry of Finance regarding the expenditure level, the expenditure level prescribed in this Circular shall apply.

Foreign experts eligible for exemption from personal income tax on income derived from implementing PCP aid programs and projects in Vietnam are those with foreign nationality, selected to enter Vietnam based on mutual agreement between non-governmental foreign organizations and the project management agencies of Vietnam, to directly carry out activities under the PCP aid program and project according to the approved documentation of the program and project by the competent project management agency of Vietnam in accordance with current regulations on the management and utilization of PCP aid and the Terms of Reference (TOR) for foreign experts.

Other entities, including foreign individuals working at representative offices, project offices, or providing consultancy services for projects, are not within the scope of application of this Circular.

2. Documents and Procedures for Exemption

Foreign experts present to the Provincial or Municipal Tax Department where the Project Management Board or Project Owner is located, a request for exemption from personal income tax, including:

- A letter from the non-governmental organization requesting that no personal income tax be levied on income derived from the implementation of the program and project by the foreign expert;

- Confirmation from the competent authority approving the PCP aid program and project (Ministry, Sector, Central Agency of the People's Organization, Provincial People's Committee, or Municipality under the Central Government) that the foreign expert is implementing a PCP aid project, specifying full name, nationality, passport number, duration of work in Vietnam according to the model specified in Appendix I attached to this Circular;

- Relevant documents related to the income of the foreign expert that is subject to exemption;

The tax authority shall refrain from levying personal income tax on income derived from the implementation of PCP aid programs and projects by foreign experts and issue a certificate of exemption from personal income tax for foreign experts according to the model specified in Appendix II attached to this Circular.

3. Organization of Implementation

This Circular takes effect fifteen days after its publication in the Official Gazette, superseding any provisions inconsistent with this Circular.

Any issues arising during implementation should be reported to the Ministry of Finance for consideration and decision./.