1. PERSONAL INCOME TAX

Official Letter No. 1211/TCT-DNNCN dated April 4^th, 2019 of General Department of Taxation regarding tax policies on capital transfer of individuals in the joint stock companies

By regulation, individuals transfer their shares in the joint stock company according to the Law on Enterprise and the Law on Securities, which is determined as incomes from transferring securities.

Whereby, if the individual has income from transferring “shares” (as a form of “stocks”), this income shall be declared and paid PIT with 0.1% on the transfer price (Article 16, Circular 92/2015/TT-BTC). Therefore, this regulation does not distinguish between listed or unlisted joint stock company.

Official Letter No. 2500/CT-TTHT dated April 12^th, 2019 of the Dong Nai Tax Department regarding Personal income tax of incomes on winning prizes.

If the company has organized sweepstakes for employees and customers, the incomes received are determined as incomes from winning prizes, not incomes from wages and remunerations.

Therefore, the prize provider shall withhold personal income tax before providing prizes to the prizewinner (Point g, Clause 1, Article 25, Decree 111/2013/TT-BTC) and declare on form 06/TNCN (Clause 2, Article 21, Decree 92/2015/TT-BTC) according to current regulations.

If the company declared incomes from winning prizes on the declaration 05/KK-TNCN, it is incorrect. The company should make the adjustment and additional declarations of months and years which are incorrect.

2. FOREIGN CONTRACTOR TAX

Official Letter No.35836/CT-TTHT dated May 20^th, 2019 of Ha Noi Tax Department regarding tax policies when purchasing the package tours from foreign contractor.

If the company purchases package tours of foreign contractor, the contract includes:

1. Package tours (including meals, hotels, transportation abroad...)

2. Round-trip tickets from Viet Nam to aboard and return.

According to this official letter, FCT applies in each case as below:

1. Package tours are provided and consumed outside Vietnam's territory, thus it is not subject to FCT;

2. Round-trip tickets from Vietnam to the travel country and return, FCT rate is:

+ CIT: Rate 2%

+ VAT: Not subject to VAT with international transport

Official Letter No. 1544/TCT-CS dated April 19^th, 2019 of the General Department of Taxation on FCT regarding Hedging insurance services (Risk prevention)

If the overseas company (the third party) signs a contract with the company in Vietnam to provide Hedging insurance services for the purpose of preventing risks of material price fluctuations (traded between Vietnam and suppliers). The company may receive money from the third party (income of company) or pay money to the third party (income of the third party).

Then, the income received by the third party, paid by Vietnamese company is subject to FCT according to Decree No. 103/2014/TT-BTC.

Vietnamese company is responsible for declaring, withholding, paying FCT on behalf of overseas company as services with the rate on revenue:

+ VAT: 5%,

+ CIT: 5%