Why are goods imported through bonded warehouses capable of paying contractor tax?

Answer:

Overview of bonded warehouse:

  • Concept: is a warehouse or yard area separated from the surrounding area for temporary storage, preservation or provision of services for goods from foreign countries or from inside the country to be put into warehouses under contracts on hiring of foreign warehouses The customs office is signed between the bonded warehouse owner and the goods owner under customs inspection and supervision.
  • Goods are imported through bonded warehouses in the following forms:

Step 1: Goods are brought into bonded warehouses by foreign contractors (from abroad)

Step 2: Goods are transferred ownership (sold) to Vietnamese enterprises (including export processing enterprises)

Step 3: Vietnamese enterprises carry out import procedures.

Thus, goods provided in the above form have delivery and receipt places located in bonded warehouses. In other words, the place of delivery and receipt of goods is within the territory of Vietnam.

According to Article 1, Circular 103/2014 / TT-BTC is applicable to the case:

  1. Foreign business organizations having permanent establishments in Vietnam or not; foreign business individuals that are residents of Vietnam or not (hereinafter referred to as foreign contractors and foreign sub-contractors) who do business in Vietnam or earn income in Vietnam under contracts, agreements, or commitments between the foreign contractor and a Vietnamese entity or between a foreign sub-contractor and a foreign sub-contractor to perform part of the main contract.
  2. Foreign entities providing goods in Vietnam in the form of domestic export and earn income in Vietnam under contracts between them and Vietnamese companies (except for cases in which goods are processed and then returned to foreign entities) or distribute goods in Vietnam or provide goods under Incoterms rules that require the sellers to be responsible for goods that have been taken into Vietnam’s territory.

So that, the foreign company uses a bonded warehouse in Vietnam to sell and deliver goods to the Company in Vietnam, the foreign company must be obliged to pay withholding tax on the income generated in Vietnam.

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