On June 10th 2019, Hanoi Tax Department issued Official Letter No. 44292/CT-TTHT. Whereby:
In case the enterprise signs a cooperation contract to distribute products of another partner. The partner will pay bonuses to employees of the enterprise in cash or in-kind when the partner’s products are sold
- For the bonuses for employees, partner shall pay via the enterprise to salespeople in accordance with the laws (these incomes are not from performing services for partner such as repair, warranty, promotion, advertising), the enterprise does not have to declare and pay VAT for these bonuses as stipulated in Clause 1, Article 5 of Circular 219/2013/TT-BTC.
- When the enterprise pays these bonuses on behalf of the partner to its salespeople, the enterprise is responsible for withholding 10% PIT of each payment from VND 2 million / time or above according to the provisions of Article 25 of the Circular 111/2013/TT-BTC.
- For in-kind bonuses, if these objects are not subject to registration of ownership according to regulations, they shall not have to declare and pay PIT.
