Scenario: your company imports 2,400 tons of raw materials and hires an international inspection body (headquartered in Singapore) to send surveyors to Vietnamese ports for quality/quantity inspection — fee USD 48,000 (net). How is contractor tax computed?
Step 1 — Characterize: inspection is an ordinary service
Inspection (survey, testing, certification) is an ordinary service under the 2026 contractor-tax framework (CIT Law 67/2025, Decree 320/2025, Circular 20/2026): 5% VAT + 5% CIT on taxable revenue. No special VAT exemption like training or healthcare.
Step 2 — The numbers on USD 48,000 (net)
- VAT withheld: 48,000 × 5% = USD 2,400.
- CIT taxable revenue: 48,000 + 2,400 = USD 50,400.
- CIT withheld: 50,400 × 5% = USD 2,520.
- Total withholding: USD 4,920 — the inspection body nets USD 43,080.
Step 3 — Treaty relief and inspection specifics
Treaty: Singapore has a tax treaty with Vietnam (1994 + 2012 Protocol). Without a Vietnamese permanent establishment, service fees may be CIT-exempt under Article 7 (Form 01/HTQT) — but 5% VAT still applies. Note: surveyors visiting Vietnam on short, repeated trips — aggregate days over 12 months; breaching 183 days on the same project can create a service PE.
On-behalf filing duty: when wiring the inspection fee abroad, the Vietnamese enterprise must retain the contractor tax, complete Form 01/NTNN under Circular 80/2021, and pay on behalf of the inspection body. Where the contract was signed from 12/3/2026, the hybrid method has been abolished, leaving only the withholding computation shown above.
Frequently asked questions
1. How much contractor tax on foreign inspection?
5% VAT + 5% CIT (on VAT-inclusive revenue) — on USD 48,000 net, total withholding USD 4,920.
2. Do repeated short surveyor trips create a PE?
They can — aggregate days over 12 months; over 183 days on the same/connected project may create a service PE.
3. Can a treaty exempt it?
CIT may be exempt under Article 7 without a PE (Form 01/HTQT), but 5% VAT still applies.
4. Who declares and pays?
The importing company handles all three steps: it retains the tax when settling the inspection fee, submits Form 01/NTNN, and pays on behalf — keep the survey report filed with the tax records.
5. What’s the tax value of inspection reports?
They evidence import quality/quantity — keep them with the contractor-tax file for finalization queries.
This article has been quality-reviewed by the FLAW AI Legal Council
