[ingodirectors] UPDATE on issue of PIT Exemption + relevant documents

Wed May 17 13:14:51 ICT 2017

Dear INGO directors:

Following the mini-survey on PIT exemption from last week, I would
like to thank those of you who quickly responded. I received 33
replies from you. Ten (10) INGOs confirmed receiving a letter from
Hanoi Tax Department (HTD), although the number is likely much higher
— HTD said they sent it to 30-40 INGOs. In the letter HTD asked INGOs
to deduct, declare and pay PIT for foreign staff which is currently
working / has worked in Vietnam. In some cases, the letter listed
names of all expatriate staff that have worked between 2009 and 2017.

The majority of INGOs who responded are registered as Representative
Office (14) or Project Office (14). Only five (5) respondents are
registered as Operations. There are 72 expatriates working / have
worked for these 33 organisations. Majority (23) of INGOs have signed
MoU which includes Article 1.4. granting the exemption from PIT on
salaries and allowances. Most of them (20) have already submitted
lists of expatriates to HTD, but only 2 received approval. Two (2)
INGOs received negative responses, while others are still waiting.

I will meet PACCOM senior leadership this Friday to share my findings
and to discuss the course of action. PACCOM committed to organise a
meeting with INGO Steering Committee and other INGO representatives
later next week. Now, I just wanted to provide an update, as well as
share some relevant documents. Most of you are familiar with it, but
there may be some country directors who have not yet seen it. Here is
an overview of the attachments with key articles noted for your
reference:

- sample of the recent HTD letter notifying INGO on non-eligibility
for PIT exemption
- Decree 12: Article 23 — Personal income tax on expatriate staff
- Law on Personal Income Tax: Article 4 — Income which is tax exempt (point 14)
- Letter from the Ministry of Finance 13231/BTC-TCT, 18 September 2009
- Sample of MoU between COMINGO and INGOs — articles 1.4 and 1.7
- my old letter to HTD on behalf of INGOs, December 2009
- HTD response to my letter, January 2010
 (the last two attachments are 8 years old, but some questions are
very relevant)

There are some other relevant legal documents, such as bilateral
agreements between Vietnam and your governments; Decree 93; Labour
Code; etc. I can share it upon request. There are more detailed
circulars guiding the implementation of Decree 12 and 93; various
amendments, letters, decisions and other documents related to the
above-listed legislation. I just wanted to share the most relevant
papers. Let me know if you need original documents in Vietnamese.

I will keep you informed of further developments, following my meeting
with PACCOM.

Warm regards,

Marko
---------
Marko Lovrekovic, Managing Co-Director
VUFO-NGO Resource Centre
Trung Tu Diplomatic Compound
6 Dang Van Ngu, Dong Da, Hanoi
Building E3, Room 201, 2nd floor
Mobile: +84 904 191 871
Phone: +84 4 3832 8570
Email: director at ngocentre.org.vn
Web: http://www.ngocentre.org.vn

On 11 May 2017 at 17:47, Marko Lovrekovic <director at ngocentre.org.vn> wrote:
> Dear INGO directors:
>
> Some of you have received letters from the Hanoi Tax Department
> recently, in which they asked for payments of Personal Income Tax
> (PIT) for your foreign staff. A few of you have been asked to pay PIT
> for your foreign staff retroactively, as far back as 2013. Hanoi Tax
> Department claims that some foreign staff does not meet sufficient
> conditions for PIT exemption and/or that some INGOs have no provisions
> on PIT exemption in their partnership agreements signed with VUFO, on
> behalf of COMINGO.
>
> If such claims proved valid, this may have significant consequences
> and implications on our work. I would like to propose a meeting with
> the VUFO-NGO Resource Centre Steering Committee, PACCOM senior
> leadership and selected INGO directors affected with the
> above-mentioned request. Before we schedule a meeting, I would like to
> collect some basic information in order to get a 'bigger perspective'
> on the current status of this issue within the INGO community.
>
> I have prepared 8 simple questions, mostly with 'yes' or 'no' answer.
> It should not take more than 3 minutes of your time; and it would help
> me greatly to prepare a follow up. Kindly note that the questions are
> intended for INGOs which employ foreign nationals, including those
> with dual citizenship. Click here:
>
> https://goo.gl/forms/iEdMupdyRxPnjC6o2
>
> Thank you in advance for your prompt responses. I will keep you
> informed about further developments.
>
> Marko
>
> Marko Lovrekovic, Managing Co-Director
> VUFO-NGO Resource Centre
> Trung Tu Diplomatic Compound
> 6 Dang Van Ngu, Dong Da, Hanoi
> Building E3, Room 201, 2nd floor
> Mobile: +84 904 191 871
> Phone: +84 4 3832 8570
> Email: director at ngocentre.org.vn
> Web: http://www.ngocentre.org.vn
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