Tax obligations on income from foreign investment capital in Vietnam
By Hoa Nguyen
09/12/2024
This article provides detailed information on tax obligations for income from foreign investment in Vietnam. In addition, the article also explains the regulations on the statute of limitations for requesting settlement of individual labor disputes. Understanding tax obligations and legal regulations helps you to fulfill your financial obligations correctly and protect your legal rights.
In the case of foreign companies and foreign investors establishing enterprises in the form of single-member LLCs, without Vietnamese enterprises or Vietnamese people contributing capital:
Foreign investors and overseas companies will not be subject to the 5% tax rate on capital investment income, as stipulated in Clause 2, Article 10 of Circular No. 111/2013/TT-BTC dated August 15, 2013. Due to the amendment and supplement in Clause 6, Article 11 of Circular No. 92/2015/TT-BTC dated June 15, 2015, "The profits of a single-member limited liability company owned by an individual shall not be included in taxable income from capital investment." This is the biggest difference compared to the type of two-member limited liability company.
In addition, for 100% foreign-invested enterprises, also known as FDI (Foreign Direct Investment) enterprises, there is a relatively good natural brand in transactions, and at the same time, the management and operation of a single-member LLC, owned by an individual, is also more proactive and flexible.
In the case of foreign companies and foreign investors establishing enterprises in the form of limited liability companies with two or more members, with Vietnamese enterprises or Vietnamese people contributing capital:
Foreign investors or overseas companies will be subject to a 5% tax rate on capital investment income, as prescribed in Clause 2, Article 10 of Circular No. 111/2013/TT-BTC dated August 15, 2013 and Clause 6, Article 11 of Circular No. 92/2015/TT-BTC dated June 15, 2015./.
