Circular No. 83/TC-TCT guides the payment of business income tax and profit tax for foreign organizations and individuals conducting express delivery services for goods and postal items in Vietnam through joint business contracts with organizations in Vietnam. This Circular stipulates the taxable subjects, tax base, tax rates, and procedures for tax declaration and payment.
Scope of application
Foreign organizations and individuals not subject to the Law on Investment of Foreign Organizations in Vietnam and holding permits from competent Vietnamese authorities to conduct express delivery services for goods and postal items in Vietnam through joint business contracts with organizations in Vietnam.
Key points
- Foreign organizations and individuals conducting express delivery services for light and heavy goods in Vietnam must pay business income tax and profit tax according to the guidance provided in this Circular.
- The taxable business income for light goods is the revenue after deducting the shipping fees payable to the Vietnamese party, applying a tax rate of 12.3% (6% business income tax + 6.3% profit tax).
- The taxable business income for heavy goods is the revenue after deducting the air freight charges from Vietnam, applying a tax rate of 21.3% (15% business income tax + 6.3% profit tax).
- The Vietnamese party has the responsibility to declare and pay taxes on behalf of the foreign party for business income tax and profit tax.
- The tax administration authority confirms in writing that the taxes have been paid to serve as the basis for withholding in cases where foreign organizations and individuals belong to countries that have signed Double Taxation Avoidance Agreements with Vietnam.
🌐 Social impact of this document
- Positive impact: The specified tax rates ensure fairness and transparency in taxing express delivery activities.
- Negative impact: Increased costs for foreign organizations and individuals conducting these activities due to the imposition of business income tax and profit tax.
❓ Frequently asked questions
What actions should foreign organizations and individuals take to pay taxes?
Foreign organizations and individuals need to declare and pay business income tax and profit tax according to the guidance provided in Circular No. 83/TC-TCT through the Vietnamese party.
What is the tax rate applied to express delivery of light goods?
The tax rate applied to express delivery of light goods is 12.3% (6% business income tax + 6.3% profit tax).
Are there any regulations regarding tax declaration and payment?
The Vietnamese party has the responsibility to declare and pay taxes on behalf of the foreign party for business income tax and profit tax according to current guidelines.
Are there any regulations regarding tax withholding in cases of signing Double Taxation Avoidance Agreements?
The tax administration authority confirms in writing that the taxes have been paid to serve as the basis for withholding in cases where foreign organizations and individuals belong to countries that have signed Double Taxation Avoidance Agreements with Vietnam.
When does this Circular take effect?
This Circular takes effect from January 1, 1996, and abolishes provisions contrary to this Circular.
Full text
CIRCULAR
Circular No. 83/TC-TCT dated December 25, 1996 of the Ministry of Finance guiding the implementation of business tax and income tax obligations of foreign organizations and individuals conducting express delivery services for goods and mail in Vietnam.
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- Based on the current provisions of the Law on Business Tax and the Law Amending and Supplementing Certain Articles of the Law on Business Tax; the Law on Income Tax and the Law Amending and Supplementing Certain Articles of the Law on Income Tax;
- Based on Decree No. 57/CP dated August 28, 1993 of the Government detailing the implementation of the Law on Income Tax and the Law Amending and Supplementing Certain Articles of the Law on Income Tax; Decree No. 96/CP dated December 27, 1995 detailing the implementation of the Law on Business Tax and the Law Amending and Supplementing Certain Articles of the Law on Business Tax;
- Based on Circular No. 75A TC/TCT dated August 31, 1993 of the Ministry of Finance guiding the implementation of Decree No. 57/CP dated August 28, 1993 of the Government, Circular No. 97 TC/TCT dated December 31, 1995 of the Ministry of Finance guiding the implementation of Decree No. 96/CP dated December 27, 1995 of the Government;
- Based on Circular No. 37 TC/TCT dated May 10, 1995 of the Ministry of Finance guiding the application regime for foreign economic organizations and individuals conducting business activities in Vietnam not falling under the forms of investment according to the Law on Foreign Investment in Vietnam;
The Ministry of Finance guides the implementation of tax payment obligations of foreign organizations and individuals conducting express delivery activities in Vietnam as follows:
This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.
1. Objectives:
Foreign organizations and individuals not subject to the Law on Foreign Investment in Vietnam and having permits from competent Vietnamese authorities to conduct express delivery activities for goods and mail in Vietnam through business cooperation contracts with organizations in Vietnam (Vietnamese party) are the subjects required to pay business tax and income tax according to the guidelines set out in this Circular.
2. Definitions in this Circular:
a. The term "light cargo" refers to ordinary parcels with a maximum weight of 31.5 kg as stipulated in the International Parcel Agreement.
b. Express delivery service for light cargo involves transporting from the sender's address to the recipient's address.
c. The term "heavy cargo" refers to parcels exceeding the size and weight limits specified for ordinary parcels.
d. Express delivery service for heavy cargo is limited to transportation from the airport of origin to the airport of destination.
II. BASIS FOR CALCULATING INCOME TAX
1. Taxable revenue applicable to express delivery activities for light and heavy cargo is defined as follows:
a. For light cargo:
Taxable revenue is the revenue from sending goods from Vietnam that foreign economic organizations and individuals receive after deducting (-) the freight charges payable to the Vietnamese party.
b. For heavy cargo:
Taxable revenue from sending goods from Vietnam that foreign economic organizations and individuals receive after deducting (-) the air freight charges from Vietnam (determined based on reasonable and valid documentation).
2. Tax rate:
The combined tax rate for business tax and income tax shall be applied. The tax rates for express delivery services for light and heavy cargo are as follows:
a. For express delivery of light cargo: a tax rate of 12.3% (business tax rate of 6%, income tax rate of 6.3% as per the tax rate for postal parcel activities) on taxable revenue.
b. For heavy cargo:
For express delivery of heavy cargo: a tax rate of 21.3% (business tax rate of 15%, income tax rate of 6.3% as per the tax rate for transport services) on taxable revenue.
III. DECLARATION AND PAYMENT OF TAXES
The Vietnamese party is responsible for declaring and paying taxes to the State Budget on behalf of the foreign party regarding business tax and income tax as prescribed above and in current guidance documents concerning tax declaration procedures. In cases where declared tax amounts are found to be inaccurate, the tax authority will notify the correct amount of tax due and handle tax violations according to current regulations on tax collection.
The direct tax management agency is responsible for confirming in writing each type of tax paid by the foreign party to serve as a basis for deduction in cases where foreign organizations and individuals belong to countries that have signed Double Taxation Avoidance Agreements with Vietnam. If there are different provisions in international agreements between the Government of Vietnam and the Government of another country, those provisions shall be applied.
IV. ORGANIZATION AND IMPLEMENTATION
This Circular takes effect from January 1, 1996. Any provisions contrary to this Circular are abolished. In cases where foreign individuals and units engaged in express delivery of goods and mail have temporarily paid taxes in 1996 according to other guidelines than those provided in this Circular, the settlement of tax obligations shall be carried out according to this Circular.
During the implementation process, if any issues arise, units are requested to report to the Ministry of Finance for consideration and resolution.
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