Customer referral contract between company and individual.

In case the company signs a collaborator contract with an individual to sell goods or provide services, the company should note the following basic points.

Regarding the subject and individual signing the contract, the individual participating in the signing of a service provision contract as above needs to satisfy all conditions for signing the contract. Specifically, in some conditional business lines, individuals need to register their business before entering into contracts, excepting for  special cases where business registration is not required under Clause 2, Article 79 of Decree 01. 2021/ND-CP.

Regarding related tax policies, companies entering into contracts with individuals need to deduct 10% tax on income according to point i, article 25 of Circular 111/2013/TT-BTC. In addition, commissions paid to individuals are included in deductible expenses when determining corporate income tax when the conditions of Article 4 of Circular 95/2015/TT-BTC are met. As follows:

  • Actual expenses related to business and production activities.
  • Expenses with all current legal documents.
  • Payments with a value of over VND 20 million (including VAT) must be paid by bank transfer.

Regarding the nature of arising economic operations, in case the contents of the signed contract and the actual performance are not the same, the related expenses may be excluded from the expenses due to the violation of Article 4 of this Circular 95/2015 due to violation of the legal basis of documents.

Official Dispatch No. 1203/CTTPHCM-TTHT dated February 8, 2021

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[DDC] Dong Du International Accounting, Taxes & Legal Consulting Group HCMC Vietnam, A member of OneSMP Singapore, Southeast Asia Business Consulting Network, we specialize in accounting services, corporate tax advice, legal advice, business training, human resource consulting, product & market surveys…over 15 years up to now in the Vietnam market. Currently, we have also built a team of foreign experts from Japan, Singapore, Thailand, Cambodia … to help customers inside and outside Vietnam to expand appropriate business opportunities as well as possible.

[SETTING UP COMPANY, ACCOUNTING, TAX, LAW COMPLIANCE, HR…IN HO CHI MINH, VIET NAM FOR FOREIGN INVESTORS]

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