Preheat oven to 350° F. Beat butter, sweetened condensed milk, egg, and vanilla extract. Sift flour and baking powder. Gradually add flour mixture to butter mixture. Refrigerate for 20 minutes. Spread dough on a floured surface and roll out with a rolling pin. Cut with cookie cutters and place on a baking sheet lined with waxed paper and bake for 15 minutes or until golden on the edges.