Official Letter No. 966/CT-TTHT issued by the Tax Department of Thanh Hoa Province on 18/02/2025 on the tax policy of foreign contractors for fines due to late loading and unfinished goods is paid as follows:

by KMC Consulting Company Limited

In the course of performance of the contract, if a fine or compensation due to delay in loading and unloading of goods is incurred for the need to store the ship beyond the time limit under the contract signed between the two parties, the income received by the foreign company is subject to contractor tax as prescribed in Article 1 of Circular No. 103/2014/TT-BTC; Concrete:

  • VAT: Subject to VAT declaration and calculation and payment.
  • CIT: Determined according to the provisions of Article 13, Section 3, Chapter II of Circular No. 103/2014/TT-BTC dated 06/8/2014 of the Ministry of Finance (mentioned above). Accordingly, the CIT rate in case of applying the direct method specified at Point a, Clause 2, Article 13, Section 3, Chapter II of the Circular No. 103/2014/TT-BTC dated August 6, 2014 of the Ministry of Finance (mentioned above). If the foreign company fails to satisfy one of the conditions specified in Article 8, Section 2, Chapter II, the Vietnamese party shall pay tax on behalf of the foreign contractor or foreign subcontractor.

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