Circular No. 64/2010/TT-BTC: Foreigners to be taxed on interest income

The Ministry of Finance issued Circular No 64/2010/TT-BTC on April 22, amending Circular No 134/2008/TT-BTC of December 2008 on tax obligations of foreign organisations and individuals doing business as contractors in Viet Nam.

Particularly, foreign enterprises or individuals who operate their businesses in Viet Nam and earn some sorts of incomes must pay income tax for interests from their bonds and short-term saving certificates.

The new document defines two kinds of income earned by foreign entities in Viet Nam – interests from bonds and from saving certificates - as those imposed with corporate revenue tax.

For the transfer of stocks, bonds, and short-term saving certificates, the income tax will be calculated based on the total sale at the moment of transfer. Meanwhile, in the 2008 circular, the income tax for bond interests was based on the total sale at the time of receiving interests.

The Circular takes effect on June 6.

(Source: VNS/VGP)