1. Instruction Personal Income Tax (PIT) Application Subject & Procedure for foreigners working in INGOs’ offices in Vietnam THE VIETNAM UNION OF FRIENDSHIP ORGRANIZATIONS PEOPLE’S AID COORDINATING COMMITEE Final/Nov. 2013

2. Legal Basis Official letter No.10109/BTC-TCT dated 16/7/2009 reporting to Prime Minister; Official letter No.4994/VPCP-KTTH dated 23/7/2009 of Government Office on PIT on foreigners working for INGOs in Vietnam. Final/Nov. 2013

3. Subjects of Application Application Subjects: Foreigners working in INGOs’ offices in Vietnam. Agency receiving PIT documents and settling PIT: Department of Taxation of Provinces or centrally administered cities and Ministry of Finance (General Department of Taxation). Final/Nov. 2013

4. Personal Income Tax Duties of Foreigners 1. Period from December 31 th 2008 backwards: Foreign individuals working for Vietnam-based INGO offices are PIT-exempted, as stipulated in the Ordinance on Income tax on high-income earners. Final/Nov. 2013

5. Personal Income Tax Duties of Foreigners 2. Period from January 1 st 2009 onwards: Exemption for PIT is conducted based on commitments of Vietnamese government stated in international treaties contracted with INGOs with the following conditions: Financial sources of salary or allowance are from overseas, and not extracted from project budget implemented in Vietnam; PIT-exempted subjects are foreign nationals (including ones with both foreign and Vietnamese nationalities); The time-limited exemption shall be based on the agreement on time limit between the Government of Vietnam or COMINGO (if authorized by the Government) and INGOs in Vietnam. Final/Nov. 2013

6. In case agreements signed before January 1 st,2009 between COMINGO (authorized by the Government of Vietnam) and INGOs are still in force and include articles on tax exemption for foreign workers, the implementation of the agreement is continued. Personal Income Tax Duties of Foreigners Final/Nov. 2013

7. Application for tax exemption Foreign experts submit a request for tax exemption to the Department of Taxation of Province where the Project Management Board or Project Owner headquarters is located, including: + A letter of request of INGO for PIT exemption on foreign experts’ income from program/ project implementation. Final/Nov. 2013

8. Application for tax exemption + A confirmation letter of the agency authorized to approve INGOs’ program/project (i.e. Ministries, centrally administered agencies of People organizations, People’s Committees of centrally administered provinces) confirming the work of said foreign expert in INGO projects in Vietnam and clearly specifying his/her full name, nationality, passport number, working duration in Vietnam, following the stipulated form; + Documents related to the foreign expert’s personal income that exempted from PIT. Final/Nov. 2013

9. Receiving and Processing time frame Within 15 (fifteen) working days after receiving sufficient application documents, the Taxation Agency will issue a Confirmation letter of PIT exemption for said entities. Taxation agency does not collect PIT on foreign experts’ income from INGOs’ program/ project implementation. Final/Nov. 2013

10. The Representative Offices of INGOs in Vietnam are responsible to submit a list of PIT-exempted foreign staff and the agreements between INGOs and The Government of Vietnam or COMINGO to the Department of Taxation of Province where they are located no later than November 30 th every year. The Head of INGOs’ Office in Vietnam are responsible for the accuracy of the list of PIT exempted staff submitted to the Taxation agency. INGOs’ responsibilities Final/Nov. 2013