Guide to Foreign Contractor Tax
If customers choose to pay Google and Facebook using Optimus's card, foreign contractor tax and bank fees apply.
Foreign contractor tax
This tax must be paid to the government to recognize expenses paid to foreign companies (Google and Facebook are foreign companies with no offices in Vietnam and do not issue VAT invoices).
Foreign contractor tax has 2 components:
5% foreign contractor value-added tax
5.26% foreign contractor corporate income tax
Optimus has already deducted item 1 when paying VAT, so customers only need to pay Optimus for item 2.
Bank fees
When paying Google and Facebook with a corporate Visa card, the bank charges a fee of 1% per transaction.
Total cost when issuing a VAT invoice
Total amount payable by the customer = (Advertising budget + Foreign contractor tax + Bank fees + Service fees) * 1.1 (10% VAT)
Example:
Assuming the advertising budget (the total amount paid to Google and Facebook) is 50 million VND, the total cost when issuing an invoice is:
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