Question: We are a Joint Vienture in Vietnam and please advise the tax apply to dividend pay incase our company pay dividend to Vietnamese owner and Foreign owners. 

Answer: According to the Point c, Subclause 3, Clause 2, Circular No. 111/2013/TT-BTC dated 15 August 2013 of the Ministry of Finance on the implementation of the law on personal income tax and the Government’s Decree No.65/2013/ND-CP elaborating a number of articles of the Law on Personal income tax and the Law on the amendments to the Law on Personal Income Tax, amended and supplemented by Subclause 6, Clause 11, Circular No. 92/2015/TT-BTC dated 15 June 2015 of the Ministry of Finance, profits from capital contributions to limited liability companies shall be subject to the Personal Income Tax.

Accordingly, the Vietnamese Owner shall pay personal income tax in line with progressive personal income tax rate (Sub-clause 2, Clause 7, Circular No. 111/2013/TT-BTC). Meanwhile, foreign owner, a non residential tax payer shall pay the personal income tax at the rate of 5% (Clause 19, Circular No. 111/2013/TT-BTC).
With the respect to your company, according to Point 1, Article 7, the Agreement for avoidance of double taxation and the prevention of fiscal evasion with the respect to taxes on income and on capital between Vietnam and Israel, your mother compnay’s dividend generated through your Vietnam company’s business activities in Vietnam shall not be taxed in Vietnam.
If you have any further questions, please feel free to contact us.
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