GENERAL DEPARTMENT     SOCIALIST REPUBLIC Of VIETNAM
      Of TAX          Independence-freedom-Happiness
 No. 947 TCT/NV5
                                Hanoi, June 21, 1994

REDUCE Of INCOME TAX fOR OVERSEAS VIETNAMESE INVESTING TO HOME COUNTRY

To : Department of tax of provinces, cities placed directly under the authority of central Government.

To execute the Decree No.29/CP dated may 27, 1993 of the Government concerning the incentive measures for Vietnamese permanently settling abroad who invests to home country, State Committee for Cooperation and Investment and Central Com mittee for Overseas Vietnamese have issued the inter-ministerial circular No.497/TTLB dated March 24, 1994 guiding the implementation of Decree No.29/ CP dated May 27, 1993.

General Department of Tax hereby guides the implementation of the incentive by tax regulated in art.3 of Inter-ministerial circular No.497/TTLB as follows:
- Vietnamese permanently settling abroad, who invests to the country in the forms of Law on foreign Investment in Vietnam, can enjoy 20% reduce of the income tax value to be paid (excluding the projects which enjoy the favourable income tax of 100%). When remitting the profit abroad, they only have to pay the abroad remitting profit tax of 5% based on the profit value remitted abroad.

- Overseas Vietnamese objects enjoying the above mentioned incentive shall have the following conditions:

Overseas Vietnamese individual investing to the country shall be confirmed by central committee for overseas Vietnamese and present this confirmation to the tax organization.

for the foreign economic organization having overseas Vietnamese employee who participates investing to the country, the capital share of overseas Vietnamese in foreign parties contribution shall be higher than 50% as specified in Investment lic ence or in Business cooperation contract, joint-venture contract or joint-venture contract or joint-venture charter approved by State Committee for Cooperation and Investment.

- The reduced amount of income tax for overseas Vietnamese shall be determined as follows.

Periodically, when the enterprise having foreign investment capital contributed by overseas Vietnamese presents the tax declaration, the tax organization shall calculate the income tax amount to be paid by the enterprise and calculate the inco me tax amount to be reduced for overseas Vietnamese on the basis of the profit distributing ratio of for overseas Vietnamese specified in Investment licence or Joint - venture contract or Business cooperation contract or Ente rprises charter. The income tax to be paid by the overseas Vietnamese included in the total income tax to be paid by the Enterprise shall be equivalent to the profit ration distributed to them.

On the basis of income tax value to be paid specified for the responsibility of overseas Vietnamese, the tax organization shall calculate the income tax value to be reduced as 20% of the income tax value to be paid. This reduced amount shall be clearly written in the income tax notice of tax organization for the enterprise and it shall be discounted from the income tax value to be paid by the enterprise. The overseas Vietnamese shall arrange to draw this reduced value from accounts of the enterprise by themselves.

- The above mentioned incentives by tax for overseas Vietnamese shall be applied for income tax and contingent profit remitting tax from 1st June, 1993. for the excess of tax value, that overseas Vietnamese have paid according to the regulations o f the official letter here to accounting from 1st June, 1994, shall be discounted from the tax value to be paid in the next period.

- If they are any obstacles emerging during the implementation of this regulation, the tax bureaus are requested to report to General Department of tax for further guidance.

Chief of General Department of Tax
TRAN XUAN THANG
(Signed)