CIRCULAR

GUIDING PERSONAL INCOME TAX EXEMPTION FOR FOREIGN EXPERTS WHO IMPLEMENT FOREIGN NON-GOVERNMENTAL AID PROGRAMS OR PROJECTS IN VIETNAM

Pursuant to May 19, 2001 Ordinance No. 35/2001/PL-UBTVQH10 of the National Assembly Standing Committee, on income tax on high-income earners (hereinafter referred to as personal income tax - PIT);
Pursuant to March 24, 2004 Ordinance No. 14/2004/PL-UBTVQH11 of the National Assembly Standing Committee, amending and supplementing a number of articles of the Ordinance on Personal Income Tax;
Pursuant to the Government’s Decree No. 147/2004/ND-CP of July 23, 2004, detailing the implementation of the Ordinance on Personal Income Tax;
Pursuant to the Prime Minister’s Decision No. 340/TTg of May 24, 1996, promulgating the Operation Regulation of foreign non-governmental organizations in Vietnam;
Pursuant to the Prime Minister’s Decision No. 64/2001/QD-TTg of April 26, 2001, promulgating the Regulation on management and use of foreign non-governmental aid;
Pursuant to the Government Office’s Official Letter No. 7617/VPCP-KTTH of December 29, 2006, approving PIT exemption for foreign experts who implement non-refundable aid projects of foreign non-governmental organizations in Vietnam;
The Ministry of Finance guides PIT exemption for foreign experts who implement foreign non-governmental aid programs or projects in Vietnam as follows:

1. Scope of application:

Foreign experts entitled to PIT exemption for incomes from the implementation of non-governmental aid programs or projects in Vietnam are foreign nationals recruited as agreed upon between foreign non-governmental organizations and Vietnamese project-managing agencies to directly participate in activities of non-governmental aid programs or projects in Vietnam in line with the programs’ or projects’ documents approved by the Vietnamese project-managing agencies under current regulations on management and use of non-governmental aid and terms of reference (TOR) for foreign experts.

Other foreigners, including foreign individuals working in representative offices or project offices or as project consultants, are not subject to this Circular.

2. Tax exemption dossiers and procedures:

A foreign expert shall present to the Tax Department of the province or centrally run city where the project management unit or project owner is headquartered a dossier of application for PIT exemption, comprising:

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- Certification of the managing agency competent to approve non-governmental aid programs or projects (ministry, department, branch, central agency of a mass organization or provincial/municipal People’s Committee) that the foreign expert is implementing a non-governmental aid project, clearly stating his/her full name, nationality, passport number and working duration in Vietnam, made according to the Form specified in Appendix No. I to this Circular;

- Documents related to the foreign expert’s income eligible for tax exemption;

The tax authority does not collect PIT on the foreign expert’s income from the implementation of the non-governmental aid program or project and grant a certificate of PIT exemption to the foreign expert, made according to the Form specified in Appendix No.

3. Organization of implementation:

This Circular takes effect 15 days after its publication in “CONG BAO.” All regulations contrary to those of it are annulled.

Problems arising in the course of implementation should be reported to the Ministry of Finance for consideration and decision.

FOR THE MINISTER OF FINANCE
VICE MINISTER




Truong Chi Trung

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APPENDIX NO. I

(Enclosed with the Finance Ministry’s Circular No. 55/2007/TT-BTC of May 29, 2007)

MANAGING AGENCY … (name) OF THE FOREIGN NON-GOVERNMENTAL PROGRAM/PROJECT IN VIETNAM

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom – Happiness
… (date) … (month), 2007

To: The Tax Department of … province/city

… Vietnam;

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THE MANAGING AGENCY… OF THE FOREIGN NON-GOVERNMENTAL AID PROGRAM/PROJECT IN VIETNAM CERTIFIES:

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The program/project document was approved on … (date) … (month) … (year) by … (the Vietnamese competent agency).

Total aid capital amount: ……………………………….

Implementation duration: from … (month) … (year) to … (month) … (year)

The program/project-implementing agency: ……………………….

The program/project implementation location: ……………….

The foreign expert implementing the program/project: MrVietnam: from … to …, the job(s) performed in Vietnam … under the program/project document and the enclosed terms of reference (TOR).

The managing agency … would like to request the Tax Department of … province/city to allow PIT exemption for Mr

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APPENDIX NO. II

(Enclosed with the Finance Ministry’s Circular No. 55/2007/TT- May 29, 2007)

GENERAL DEPARTMENT OF TAXATION

TAX DEPARTMENT OF … PROVINCE/CITY

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom – Happiness
… (date) … (month), … (year)

CERTIFICATE OF PIT EXEMPTION FOR FOREIGN EXPERT’S INCOME FROM THE IMPLEMENTATION OF FOREIGN NON-GOVERNMENTAL AID PROGRAM/PROJECT IN VIETNAM

To

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- Pursuant to the Prime Minister’s Decision No. 64/2001/QD-TTg of April 26, 2001, promulgating the Regulation on management and use of foreign non-governmental aid;

- Pursuant to the Finance Ministry’s Circular No. … Vietnam;

- Pursuant to Decision No. …, approving the foreign non-governmental aid program/project in accordance with the Prime Minister’s Decision No. 64/2001/QD-TTg of April 26, 2001;

… of … (date) … (month) … (year), and enclosed dossiers of PIT exemption for Mr./Mrs. … who is the foreign export working for the non-governmental aid program/project … (name of the program/project) of the foreign non-governmental organization … (name of the non-governmental organization) in Vietnam,

The Tax Department of … province/city certifies that Mr

Director of the Tax Department of … province/city

(Signature, seal)