Official Dispatch No. 1820/TCT-TNCN dated May 27, 2011 of the General Department of Tax on Personal Income Tax Policy for profits transferred overseas

To: Bac Lieu Department of Tax

On answer the Official Dispatch No. 74/CT-TTr dated March 07, 2011 of Bac Lieu Department of Tax on Personal Income Tax Policy for profits transferred overseas of No.1 Limited Company, the General Department of Tax has following opinions:

-   The Article 3.3 of the Law on Personal Income Tax regulates taxable incomes as following:

“3. Incomes from capital investment, including: a/ Interests;

b/ Dividends;

c/ Incomes from capital investment in other forms, except for government bond interests.”

            -  The  Article 27  of  the  Law  on  Personal  Income  Tax  regulates  the calculation  base  for  non-residents  who  earn  incomes  from  capital investment as following: “Tax on income from capital investment of a nonresident is determined to be equal to the total sum of money earned by a non-resident  from his/her  capital  investment  in  organizations  or  other individuals in Vietnam, multiplied by the tax rate of 5%.” - At the point 3.3, Section II, Part A of the Circular No. 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance regulating incomes liable to personal income tax: “Profits received for contribution of capital to limited  liability  companies,  partnerships,  cooperatives,  joint  ventures,

business  cooperation  contracts  and  other  business  forms  under  the

Enterprise Law and the Cooperative Law.”

Pursuant  to  above  regulations,  the  remained  income  of  No.1  Limited Company (after paying enterprise income tax): If the Company shares foreign investors who have to pay personal income tax for Incomes from capital investment before transferring incomes overseas. The remaining incomes  are  shared  with  foreign company  investing  in  organizations, individuals in Vietnam and not in the list of Incomes liable to personal income tax.

The General Department of Tax responds to Bac Lieu Departments of Tax for full understanding./.

FOR THE GENERAL DIRECTOR DEPUTY GENERAL DIRECTOR

Pham Duy Khuong