On 17 November 2009, the State Bank of Vietnam issued Official Letter No. 8990/NHNN-QLNH ("Letter 8990") to reply to the General Department of Taxation's question whether payment by foreign individuals via their current accounts opened in Vietnam for goods purchased from Vietnamese enterprises is determined to be made via bank for the purpose of deduction and refunding of value added tax.
With reference to Article 30 of Decree No. 160/2006/ND-CP providing regulations for implementation of the Ordinance on Foreign Exchange Control, Letter 8990 affirms that non-resident individuals may open and use foreign currency deposit accounts at credit institutions in Vietnam to disburse for a remittance or payment for a current transaction.
As such, payment via a current account by a foreign sole proprietor or a foreign individual for goods purchased from a Vietnamese enterprise is deemed to be paid via bank. However, this payment mode must be stipulated in the export contract, its addendum or its amendment.
Letter 8990 reminds authorised credit institutions that they are responsible for monitoring and controlling all receipt and disbursement in foreign currency deposit accounts in order to ensure payments and transfers are implemented for the correct purposes and in compliance with the law.
For inquiries related to this Client Alert, please contact:
Dao Nguyen (email@example.com)
Thinh Dan (firstname.lastname@example.org)