On August 15th, 2019, Hanoi Department of Tax issued the Official Letter No.64601/CT-TTHT. Whereby:
In case Enterprise hires foreign contractors to process software and then the staffs in Vietnam will continue to pack and sell products to domestic partners, the Contractor’s income arising from software outsourcing fees shall be subject to FCT as prescribed in Circular 103/2014/TT-BTC, specifically as follow:
- VAT: Processing software is not subject to VAT.
- CIT: Applying 5% CIT rate on turnover.
In case foreign contractors generate income from copyright, the CIT rate calcualted on turnover shall be 10%.
