On May 27th, 2019, Hanoi Department of Tax issued the Official Letter No.38359/CT-TTHT. Whereby:
In case Enterprise purchases advertising services on Facebook, Google, CloudFlare of foreign network operators to increase the spreading of its products , the number of access, branding efficiency, security and to optimize speed, … the above cooperation is carried out by just creating an online login account on the system, not signing in any contract or in a document but it has to pay for each use (may be many times a month) based on payment request sent by the partner, then the Company is responsible for deducting and paying Foreign Contractor Tax before paying to foreign contractors with the percentage of VAT and CIT by 5% as stipulated in Article 12, 13 of Circular No. 103/2014/TT-BTC
Declaring tax for the case of paying VAT directly on the value of VAT and paying CIT according to fixed rate calculated on income is consider as declaration for each time of payment for foreign contractors and declaration of final settlement when terminating the contract.
In case the company pays foreign contractors many times a month, it is possible to register for monthly tax declaration instead of declaring for each time of payment.
