Common problems
- A turnkey contract covering equipment, installation, training and technology transfer does not separate the value of each part, so the wrong withholding rate is applied.
- It is not settled which party bears foreign contractor tax, and the shortfall appears at settlement.
- VAT treatment of the ODA-funded portion is applied inconsistently across packages.
- Investment incentives the law already grants to the railway sector are not fully used.
Legal basis
The wording below is our reading of each provision, not an official translation. Only the Vietnamese text is authoritative — you can open every document in the Document lookup section.
Law on Railways — Article 5.4Railway infrastructure business, railway transport, railway industry and railway workforce training are investment-incentivised sectors.
Law on Railways — Article 32.4Trial running, training and technology transfer costs are included in total investment — how these are separated bears directly on the tax position.
Law on Independent Audit — Article 40.2(a)An audit firm may register to provide economic, financial and tax advisory services.
What we do
- Review the contract before signingSeparate the value of each component, establish the tax treatment of each, and make clear which party bears the tax.
- Determine the foreign contractor tax positionBy activity: supply of goods, installation services, training, technology transfer.
- Settle VAT treatment by funding sourceApplied consistently across all packages within the project.
- Review investment incentivesAgainst the qualifying conditions and the documentation needed to claim them.
- Prepare the explanatory fileReady in advance for when the tax authority examines the position.
What you receive
- A review of the tax clauses in the contract, with proposed amendments
- A schedule of foreign contractor tax by component
- Consistent VAT guidance for the whole project
- An explanatory file for the tax authority
When to call us
Before signing with a foreign contractor — that is the point at which the clauses can still be changed. After signature, only the consequences can be managed.
Two conditions, stated before anything else. First, this is a service under Clause 2, Article 40 of the Law on Independent Audit — an audit firm must register it with the Ministry of Finance before providing it. Second, if we audit your organisation, or expect to, this engagement must pass an independence check under Article 30 of the same law before signing. We run that check first, and if it fails we say so plainly and decline.
Next step
Describe your situation on the Request advice page, or call 0825092007. We read it, classify it and reply within 24 working hours — including when the answer is that the work falls outside what we are permitted to do.
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