SUBJECTS NOT IT APPLICATION

SUBJECTS NOT IT APPLICATION

Subjects not it application specified in Article 2 of Circular 103/2014/TT-BTC include:

- Foreign organizations and individuals doing business in Vietnam in accordance with the Law on Investment, the Law on Petroleum and the Law on Credit Institutions.

- Foreign organizations and individuals earning incomes from services provided and used outside Vietnam.

Example 1: Company H of Hong Kong provides material handling services at the port in Hong Kong for Company A in Vietnam. Company A pays Company H for material handling services at the Hong Kong port.

In this case, material handling services at Hong Kong port are provided and used in Hong Kong, so they are not taxable in Vietnam.

- Foreign organizations and individuals providing goods without services shall be provided in Vietnam in the following forms:

+ Delivery of goods at foreign border checkpoint (including cases the seller is responsible for warranty).

+ Delivery at Vietnam's border checkpoint (including cases the seller is responsible for warranty).

Example 2: Company C in Vietnam signs a contract for the import of excavators and bulldozers with Company D in overseas, and the delivery is carried out at the Vietnam's border checkpoint. Company D shall bear all responsibilities and expenses related to the shipment to the point of delivery at the Vietnam's border checkpoint; Company C is responsible for expenses related to the receipt and transportation of goods from Vietnam's border checkpoint. The contracts prescribes that the goods come with a one-year warranty by company D, in addition, Company D does not provide any services related to such goods in Vietnam. In this case, the goods supply activities of Company D are not subject to the application of Circular 103/2014/TT-BTC.

- Foreign organizations and individuals provide any of the services below and are provided overseas, such as:

+ Repair of means of transport (aircraft, aircraft engines, aircraft spare parts, ships), machinery and equipment (including undersea cables, transmission devices), with or without spare parts;

+ Advertising and marketing (except for advertising and marketing on the internet);

Example 3: A Vietnamese enterprise signs a contract with an organization in Singapore to run advertisements for products in Singapore, this advertising service is not subject to the application of Circular 103/2014/TT-BTC. In case an organization in Singapore to run advertisements for consumption in the Vietname's market on the internet, the income from this advertising service is subject to the application of Circular 103/2014/TT-BTC.

+ Trade promotion and investment encouragement; 

+ Brokering goods sale and services provision overseas;

Example 4: A Vietnamese enterprise signs a contract to hire a company in Thailand to broker the sale of its goods in Thailand or on the international market, this brokerage service is not subject to the application of Circular 103/2014/TT-BTC; in case a Vietnamese enterprise hire a company in Thailand to broker a transfer of the Vietnamese company's real estate in Vietnam, this brokerage service is subject to the application of Circular 103/2014/TT-BTC.

+ Training (except for online training);

Example 5: Company A in Vietnam signs a contract with University B of Singapore for provision of training for Vietnamese employees at University B, the training services provided by University B are not subject to the application of Circular 103/2014/TT-BTC; in case Company A in Vietnam signs a contract with University B in Singapore for provision of training for Vietnamese employees in Vietnam in the form of online training, the online training services provided by University B is subject to the application of Circular 103/2014/TT-BTC.

+ Division of charges for international telecommunications services between Vietnam and foreign contractors, which are provided outside Vietnam.

- Foreign organizations and individuals using a bonded warehouses or inland clearance depot (ICD) as a warehouses serving international transport, transit of goods, or storage of goods to be processed by other companies.