Tax obligations for a company specializing in cloud computing services.

BTS is a startup providing cloud computing services, specializing in offering modern and reliable solutions to IT customers. In 2021, BTS established a legal entity in Vietnam with capital contributions from two legal entities: a Singapore company and a Vietnamese company. BTS is a proud partner of two of the largest multinational technology companies in the cloud computing industry – Google, with Google Cloud Platform (GCP) and Google Workspace service (formerly known as G-Suite), and Amazon, with the Amazon Web Services (AWS) platform.

In September 2023, BTS plans to acquire cloud computing service packages from Amazon Web Services ("AWS") to offer to customers in Vietnam. As AWS is a foreign provider without a permanent base in Vietnam but generates income in the country, it falls under the scope of contractor tax regulations outlined in Circular 103/2014/TT-BTC dated 06/8/2014. Accordingly, BTS is obligated to declare and pay contractor tax on behalf of AWS, covering both value-added tax ("VAT") and corporate income tax ("CIT").

The challenge faced by BTS is determining whether the cloud computing products and services provided by AWS are categorized as software services and are not subject to VAT. This classification is crucial for establishing the correct tax rate and ensuring accurate contractor tax declarations for AWS, thereby mitigating potential tax risks.

Given the evolving nature of the cloud computing industry and the uncertainties in tax policies, BTS sought assistance from TPM to navigate these complexities and accurately determine the sufficient contractor tax obligations for AWS.

TPM's solutions

TPM, being a professional tax consultancy firm with in-depth knowledge of tax regulations in Vietnam, approached the challenge of determining contractor tax obligations related to AWS's cloud computing services for BTS with a meticulous strategy. The initial step involved comprehensive discussions with BTS's Board of Directors and the finance and accounting department to gain a thorough understanding of BTS's operational model.

Furthermore, TPM conducted a thorough examination of all relevant documents pertaining to the services provided by AWS, referencing current legal documents to provide BTS with advice on determining taxable entities and the obligations for contractor tax declarations for AWS.

Following the review, TPM concluded that, given the nature of the cloud computing services offered by AWS to BTS, there are substantial grounds to categorize this as a non-VAT software service. Consequently, AWS is not subject to VAT obligations in the context of contractor tax declarations.

Recognizing the complexity of the business and aiming to safeguard BTS's interests while mitigating future risks, TPM drafted a letter and submitted it to the Ho Chi Minh City Tax Department, seeking feedback on this matter.


Benefiting from TPM's support and insights, BTS has obtained favorable responses from the Tax Authorities in resolving issues related to identifying taxable entities and determining contractor tax declaration obligations for AWS. This positive outcome serves as the foundation and rationale for BTS's decision to select TPM as its tax consulting partner throughout its business operations in Vietnam

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