Question: We have been awarded a contract of construction supervision of a solar plant in Vietnam and the supervision will last for more than 6 months. We would like to know if we are considered a permanent establishment and if we need to set an office or if it’s enough with the client to retain the witholding taxes and not set a permanent establishment.
I am Lawyer of SB Law. I was entrusted to provide you legal advice regarding to your question hereunder.
In this case, when you are awarded a 6 months contract for construction supervision, it is not considered as a permanent establishment. Then, you can have two following options:
– Option 1: Your Client shall retain witholding tax and deduct withholding tax before making payment to you.
– Option 2: You shall setup a Project Office in Vietnam to follow the project. Then, the Project Office in Vietnam shall take care withholding tax for you.