Circular No. 8545/TC/TCT dated September 10, 2001 guides the withholding of corporate income tax on interest from deposits for foreign organizations and individuals operating in Vietnam. The document stipulates that deposit interest is subject to taxation, and banks are responsible for withholding before payment.
적용 범위
[State Bank of Vietnam; commercial banks; foreign organizations and individuals engaged in business activities in Vietnam]
핵심 사항
- Deposit interest falls under the taxable income category according to Circular No. 169/1998/TT-BTC (Point 2, Section 1, Part C).
- Banks must withhold and pay tax on behalf of foreign organizations and individuals when paying deposit interest from January 1, 2001.
- The withholding tax rate before remitting to the budget is 0.8% of the actual amount received.
- Interest arising from accounts in the name of foreign individuals engaged in business activities in Vietnam has not yet been subject to taxation.
- Banks are responsible for withholding and paying tax on behalf of foreign organizations and individuals when paying deposit interest.
🌐 이 문서의 사회적 영향
- Increase revenue for the state budget through the implementation of withholding tax on deposit interest of foreign organizations and individuals.
- Foreign organizations and individuals face increased financial burden due to additional taxation.
- Banks encounter difficulties in managing and fulfilling new tax obligations.
❓ 자주 묻는 질문
Is deposit interest from foreign organizations and individuals subject to taxation?
Yes, deposit interest is subject to corporate income tax according to Circular No. 169/1998/TT-BTC.
What percentage must banks withhold when paying deposit interest?
The withholding tax rate before remitting to the budget is 0.8% of the actual amount received.
When does the application of withholding tax on deposit interest begin?
Withholding tax applies from January 1, 2001.
전문
LETTER
OF THE MINISTRY OF FINANCE NO. 8545/TC/TCT DATED SEPTEMBER 10, 2001
REGARDING WITHHOLDING TAX ON INTEREST FROM DEPOSITS
Dear: State Bank of Vietnam
In response to the letter No. 266/CV-VPI dated June 28, 2001 from the State Bank (attached with a discussion paper by the Banking Working Group) regarding corporate income tax on interest from deposits, the Ministry of Finance provides its comments as follows: after:
1. Regarding corporate income tax on interest from deposits:
According to the provisions of the Law on Corporate Income Tax, interest from deposits and loans is subject to corporate income tax. For foreign organizations and individuals conducting business in Vietnam not under the Law on Investment by Foreign Investors, they are regulated by Circular No. 169/1998/TT-BTC dated December 22, 1998 of the Ministry of Finance. According to the guidance at point 2, section 1, part C of Circular No. 169/1998/TT-BTC, interest on loans includes income from any form of lending including income from securities and bonds. The term "income from any form of lending" essentially refers to interest rates (interest) paid for loans, deposits, securities, and bonds. Organizations issuing securities and bonds and banks when raising capital use various forms of borrowing such as borrowing, accepting deposits, issuing securities and bonds, and paying interest according to agreed-upon rates. the amendment of Circular No. 169/1998/TT-BTC dated December 22, 1998 issued by the Ministry of Finance. According to the guidance at point 2, item 1, part C of Circular No. 169/1998/TT-BTC, interest on borrowed money is income from loans made in any form, including income from securities and bonds. The term "income from loans made in any form" essentially refers to the interest rate paid for loans, deposits, securities, and bonds. Organizations issuing securities and bonds and banks when raising capital use borrowing forms such as taking out loans, receiving deposits, issuing securities and bonds, and paying interest according to agreed-upon rates.
According to international practice, double taxation avoidance agreements have provisions regarding interest on loans (interest). In the OECD Model Commentary, the term "interest on loans" also includes interest from deposits, securities, and bonds.
Therefore, interest from deposits is consistent with Vietnamese law and international practices under Circular No. 169/1998/TT-BTC.
2. Regarding the responsibility of banks to withhold tax
2. Regarding the responsibility of banks to withhold tax:
The principle for declaring and paying taxes by foreign organizations and individuals conducting business in Vietnam as stipulated in Circular No. 169/1998/TT-BTC is that Vietnamese entities must have the responsibility to withhold tax before making payments to foreign organizations and individuals. Currently, many banks are implementing this principle when paying contractors abroad for goods or services or loans. Therefore, when banks pay interest to depositors or borrowers, they must withhold and pay taxes on behalf of these depositors and borrowers in accordance with current laws. To cover the costs associated with tax collection and payment, banks will be entitled to retain 0.8% of the actual amount collected before transferring it to the State Treasury account.
On May 10, 2001, the Ministry of Finance issued Circular No. 4245/TC/TCT guiding banks on implementing the withholding of tax before paying interest on deposits to foreign organizations as stipulated in Circular No. 169/1998/TT-BTC. The tax withholding applies to interest on deposits arising from January 1, 2001 onwards. For interest on deposits arising from accounts in the names of foreign individuals conducting business in Vietnam, tax on income will temporarily not be levied for these individuals' deposit interests.
3. Regarding the implementation of withholding tax:
On May 10, 2001, the Ministry of Finance issued Circular No. 4245/TC/TCT guiding banks on how to withhold taxes before paying interest from deposits to foreign organizations as stipulated in Circular No. 169/1998/TT-BTC. Withholding tax applies to interest from deposits arising after January 1, 2001. For interest from deposits arising from accounts under the names of individual foreigners conducting business in Vietnam, taxes on these interests will be temporarily exempted.
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