Dear …..,
Wish you are doing well and keeping safe.
Relating to the above topic, our tax team had been scanning through the company’s bank statements and recognized that there are some payments to overseas vendors which may be subject to Foreign Contractor Tax.
Foreign contractor tax (FCT) is a specific kind of tax in Vietnam. The tax applies to foreign business entities, who perform business activities and receive income in Vietnam. FCT is not a separate tax but it combines corporate income tax (CIT) and value added tax (VAT) for the payments on foreign contractors.
Foreign business entities are responsible for FCT for services performed in Vietnam. Payments that are subject to FCT are including services fee.
For general services, 5% CIT and 5% VAT are applicable on service fees paid.
In this regards, in ….. there are 02 overseas payments from …….. to foreign business entities (…….).
Please confirm that we shall go ahead to comply with the FCT declaration and payment. Kindly be noticed that the late declaration and late tax payment penalties may incur.
Thank you.
Best regards,