Tax on transferring profit, dividend incomes from Vietnam to foreign countries

Tax on transferring profit, dividend incomes from Vietnam to foreign countries

Tax on transferring profit, dividend incomes  from Vietnam to foreign countries (abroad) is governed by  following legal documents:
1. Law on corporate income tax applicable to corporate investors
2. Law on personal income tax applicable to individual investors
3. Guidelines for transferring profits abroad of organizations and individuals promulgated by the Ministry of Finance.
4. Treatment on avoidance of double taxation between Vietnam and the country of which the investor has nationality.

1. Tax on transferring profit, dividend incomes from Vietnam to foreign countries for investors being enterprises:

Pursuant to Clause 6, Article 4 of the Law on Corporate Income Tax 2008 stipulates that income is distributed from capital contribution, joint venture and association with domestic enterprises, after paying corporate income tax as prescribed by the Corporate Income Tax Law 2008 are exempt from tax. Therefore, tax on transferring profit, dividend incomes from Vietnam to foreign countries does not apply to corporate investors.

2. Tax on transferring profit, dividend incomes from Vietnam to foreign countries for individual investors:

Pursuant to Clause 6, Article 11 of Circular 92/2015/TT-BTC, personal income tax on income from capital investment of non-resident individuals is determined by the total taxable income of non-resident individuals received from capital investment in Vietnamese organizations and individuals multiplied by the tax rate of 5%. Therefore, the tax on transferring profit, dividend incomes from Vietnam to abroad is 5% for individual investors

3. Determine the amount of income to be remitted abroad

Pursuant to Clause 1, Article 3 of Circular No. 186/2010/TT-BTC stipulating: "Annual profit remitted abroad is the profit that foreign investors are divided or earned in the fiscal year from investment activities in foreign countries. direct investment based on audited financial statements, corporate income tax finalization declarations of enterprises in which foreign investors participate plus (+) other profits such as profits profits that have not yet been carried over from previous years; minus (-) amounts used or committed by foreign investors to reinvest in Vietnam, profits used by foreign investors to cover expenses of investors foreign investors for production and business activities or for personal needs of foreign investors in Vietnam”.

In addition, the tax on transferring profits and dividends from Vietnam to abroad is adjusted according to the Agreement on Avoiding Double Taxation that Vietnam signed with the country of which the investor has nationality.

LAWYER VIETNAM LAW FIRM - Vietnamese Lawyers