Official Dispatch No. 1826/TCT-TNCN dated May 27, 2011 of the General Department of Tax on Personal Income Tax Policy

        The  General  Department  of  Tax  received  the  Official  Dispatch  No. 113/CV-CTTVXD dated May 09, 2011 of the Quang Nam Construction and Consulting Limited Company on question to the personal income tax

policy,  Quang  Nam  Department  of  Tax  answered  at  two  documents (Official Dispatch No. 863/CT-TTHT dated March 04, 2011 and Official Dispatch  No.  2165/CT-TNCN  dated  April  22,  2011),  and  the  General Department of Tax has opinions as following:

      According to the instruction on point 1, Section2, Part A of the Circular 84/2008/TT-BTC dated September  30,  2008 of the Ministry of Finance guiding the implementation of a number of Articles of the Law on Personal Income Tax and guiding the implementation of the Government’s Decree No.  100/2008/ND-CP dated September  08,  2008, detailing a number of Articles of the Law on Personal Income Tax: “Incomes from business activities Incomes  from  business  activities  are  those  earned  from production  or business activities in the following:

 - Goods production or trading or service provision in all domains and business sectors  under  law,  such  as  goods  production  and  trading;         construction;  transport;  food  and  drink  catering;  provision  of  services, including house or business space lease service.

Independent professional activities of individuals in domains and sectors for which they are licensed or issued practice certificates under law.” According  to  the instruction  of  the  Article 5  of  the  Circular  No. 62/2009/TT-BTC Circular No. 62/2009/TT-BTC dated March 27, 2009, of the  Ministry  of  Finance  amending  and supplementing  the  Ministry of Finance’s Circular No. 84/2008/TT-BTC of September 30, 2008, guiding a number of articles of the Law on Personal Income Tax and guiding the Government’s  Decree  No. 100/2008/ND-CP  of  September 8, 2008, detailing a number of articles of the Law on Personal Income Tax: “Organizations and individuals that pay commissions to goods sale agents; salaries,  wages,  remuneration  or  other sums  of  money  to  individuals performing services of VND 500,000 or more each time or as the total value of commissions or service charges, shall withhold personal income tax before  paying  incomes  to  these  individuals  under  the  following guidance:

Withholding tax at the single rate of 10% of paid incomes, except for cases for which the Ministry of Finance has given a written guidance on specific  temporary withholding  rates (for  insurance  or  lottery  agency commission).

Comply with above guidance:

- Individuals having business registration have to make up a list and pay tax in accordance with regulation.

- Individuals as collaborators who are not in Company’s workforce find works outside and bring to Company to sign promise contract, Company has to deduct at the percentage  10% for the service with total income

payment of 500.000 VND and   above when paying these individual on the implementation of consulting, designing and so  on.

Quang  Nam  Department  of  Tax  is  proposed  to  study  and  solve  in accordance with regulations.

FOR THE GENERAL DIRECTOR DEPUTY GENERAL DIRECTOR

Pham Duy Khuong