Respectfully to:

- The taxation department of Kon Tum province
- The taxation department of Binh Duong province

The General Department of Taxation has received official dispatch No. 4474/CT-TTr dated September 21, 2010 of the taxation department of Kon Tum province and official dispatch No. 7264/CT-TT&HT dated July 23, 2010, of The taxation department of Binh Duong province, asking opinion on personal income tax (PIT) for non-resident foreign individuals who are brokerage to sale goods in foreign countries for Vietnamese enterprises, the General Department of Taxation has opinions as follows:

At point 4.2 section I, part A of the Circular No. 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 of September 8, 2008, detailing a number of articles of the Law on Personal Income Tax, guided: “Non-Vietnamese nationality individuals who earn taxable incomes, including foreigners working in Vietnam and foreigners not present in Vietnam but earning taxable incomes in Vietnam.”

At point 3.2 section I, part C of the Circular No. 84/2008/TT-BTC dated September 30, 2008, of the Ministry of Finance, as mentioned above, guided:   "Personal income tax rates for incomes from business activities of non-resident individuals are specified for different production sectors or business lines as follows:… 5% for service provision;…”

At point 1, section II, part C of the Circular No. 84/2008/TT-BTC dated September 30, 2008, of the Ministry of Finance, as mentioned above, guided:  “Personal income tax on income from salaries or wages of a non-resident individual is determined to be his/her income from salaries or wages multiplied by (x) the tax rate of 20%”

Based on guides mentioned above, if non-resident foreign individuals who supply brokerage service for goods sale in foreign countries to Vietnamese enterprises and they are paid brokerage commission by Vietnamese enterprises, the enterprises paid commission have responsibilities for deducting and paying PIT at the tax rates as follows: 

...

...

...

- If foreign individuals are not traders, their brokerage commission amounts will be considered as salaries or wages and they will be dutiable at tax rate of 20% on commission amounts.

Foreign individuals being trader must have business registration as prescribed by foreign law or papers proving to be trader and being recognized by foreign law. Foreign papers and documents must be consular legalized when being used in Vietnam, as prescribed in the Circular No. 01/1999/TT-NG dated June 03, 1999, of the Ministry of Foreign Affairs, providing for rules of legalizing papers and documents.

The General Department of Taxation notifies the taxation departments.

FOR THE GENERAL DIRECTOR OF GENERAL DEPARTMENT OF TAXATION
DEPUTY GENERAL DIRECTOR




Pham Duy Khuong