Vietnam: Foreign contractor tax liability | KPMG Global
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Vietnam: Foreign contractor tax liability, goods imported before October 2014

Vietnam: Foreign contractor tax liability

The General Department of Taxation has issued guidelines that may be viewed as an effort to require companies to declare and pay foreign contractor tax on all imported goods with “warranty terms attached” in periods prior to October 2014.


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Official Letter 2776/TCT-CC (26 June 2017) requests that all provincial tax departments review imports of goods prior to October 2014 for foreign contractor tax compliance. 

Foreign contractor tax

Circulars prior to October 2014, with respect to goods supplied before October 2014, provided that the supply of goods with warranty services performed in Vietnam were subject to the foreign contractor tax. From 1 October 2014, foreign contractor tax was not to apply to the supply of goods when the goods were delivered at a foreign border or at the Vietnamese border, and the goods only had warranty terms as the responsibility and obligation of the seller (there were no other associated services performed in Vietnam). However, in subsequent releases, the tax authorities issued various (and contrary) guidelines providing that the foreign contractor tax applied to goods that had warranty terms but no other associated services performed in Vietnam. The June 2017 official letter includes directions for the local tax authorities to review the imports of goods from October 2014 for compliance with the foreign contractor tax guidelines.

KPMG observation

With the recent official letter, it can be interpreted that companies will still declare and pay foreign contractor tax on imported goods with warranty terms attached in periods prior to 1 October 2014. Businesses need to be aware of the new guidelines and review all import contracts with warranty terms attached that are concluded before 1 October 2014, in order to prepare for potential future tax audits and inspections.


Read a July 2017 report [PDF 290 KB] prepared by the KPMG member firm in Vietnam

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