Personal income tax in Vietnam for foreigners

Personal income tax finalization is when an individual generates income from salaries and wages from many different sources as taxable income is required tax finalization personal income. In Vietnam, personal income tax finalization is implemented by an online portal conveniently for individuals. Clients can log into your account on the website of the General Department of Taxation (https://canhan.gdt.gov.vn/) and then follow the steps described below. At your convenience, Clients can authorize the finalization to the company paying your income or Tax Agent as Viet An. We provide a tax service to finalize your PIT tax as quickly as possible.

What is personal income tax finalization?

Personal income tax finalization is the act of individuals with taxable income from salaries and wages self-finalizing or authorizing finalization to the place where the income is paid to declare the personal income tax amount in a tax year with the agency. Tax issues include additional tax amount that needs to be paid, refund of overpaid tax amount, and tax offset in the next period.

Scope of determining the taxable income of foreigners

• For foreigners who are resident individuals, taxable income is income generated within and outside the territory of Vietnam, regardless of where the income is paid and received.
• For non-resident individuals, taxable income is income generated in Vietnam, regardless of where the income is paid and received.

Finalization of personal income tax in Vietnam for foreigners

For resident foreigners

• Foreigners who are individuals residing in Vietnam will have to fully comply with regulations on tax finalization at the time of taxable income generation like Vietnamese citizens. Residents shall make PIT finalization when they have to pay additional tax or have overpaid tax amounts.
• Resident individuals being foreigners who terminate working contracts in Vietnam shall make tax finalization with tax authorities before leaving the country. The organization that pays personal income will be authorized to finalize PIT. The deadline for submitting personal income tax finalization dossiers in this case is the 45th day after the individual exits.
• The tax ratio in case a foreigner residing in Vietnam signs a labor contract of 3 months or more:

(Unit: million VND)

• In case a foreigner residing in Vietnam signs a labor contract of less than 3 months, the tax shall be calculated according to the full table x 10% tax rate.

For non-residing foreigners

Foreign workers who do not reside in Vietnam, i.e. do not fully meet the conditions for residence in Vietnam above, must make PIT finalization according to the following regulations:

• An employee working in Vietnam means the presence of such individual in the Vietnamese territory for less than 183 days in a calendar year or for 12 consecutive months counting from the first day that person is present in Vietnam ( based on the date of entry stamped on the Passport).
• The foreign worker does not have a regular place of residence in Vietnam, does not register for a permanent residence following the law, or does not have a long-term rental contract in Vietnam.
• In case a non-resident foreign individual authorizes tax finalization: That individual has income at an organization with a contract for 3 months, at the time of PIT finalization, he will be able to authorize the organization to tax finalization. This organization rece will only make PIT finalization for the part of the income that is paid by the organization.
• In case the individual is a non-resident foreigner who directly finalizes the tax: That individual has income from salary, business, or from many taxable people and has an overpaid tax amount, or additionally pays or offsets other taxes. The next declaration period will finalize personal income tax by himself.
• Whether the labor contract of a foreigner who does not reside in Vietnam is signed for a term of less than 3 months or from 3 months or more, tax is calculated according to Full income x Tax rate of 20%.

Determining whether the foreign individual resides or does not reside

For foreign workers, it is necessary to first determine whether the foreigner is a resident or non-resident individual in Vietnam. The determination will be based on Clause 1, Article 1 of Circular 111/2013/TT-BTC:

A resident individual is a person who meets one of the following conditions:

• Being present in Vietnam for 183 days or more within a calendar year or 12 consecutive months from the first day of presence in Vietnam, in which the arrival date and departure date are counted as one (01) day. Arrival and departure dates are based on the certification of the immigration authority on the individual’s passport (or laissez-faire) when arriving and leaving Vietnam. In case of entry and exit on the same day, it is counted as one day of residence.

Have a permanent residence in Vietnam in one of the following two cases:

• Permanent residence is the permanent residence stated in the Permanent Residence Card or the temporary residence when applying for a Temporary Residence Card issued by a competent agency under the Ministry of Public Security.
• Having a rented house to live in Vietnam according to the provisions of housing law, with the term of the lease contract being 183 days or more in the tax year.

Legal risks violate the obligation of finalizing personal income tax on time

• Administrative penalties for individuals who have to pay additional tax but do not declare on time and are discovered by the Tax authority.
• In case an individual overpays tax without declaring and finalizing it on time, the overpaid tax amount will not be refunded and tax will not be offset in the next period.

The time limit for individuals to complete tax finalization

Personal income tax finalization for salaries, wages, and income received. Personal income tax will be finalized no later than the timelines specified below:

• No later than March 31 of the financial year for organizations and individuals paying income from salaries and wages;
• No later than April 30 of the financial year for individuals with income from salaries or wages to directly settle taxes with the tax authority.

Instructions for individuals to self-finalize personal income tax online

Tax finalization can be done by the individual or authorization for finalization to the place where income is paid. In cases where individuals have taxable income but are not subject to authorization for finalization to the place where the income is paid, they must settle directly with the tax authority.

Currently, individuals can self-finalize personal income tax online for income from different sources as follows:

Step 1: Access the Vietnam Tax Website of the General Department of Taxation at: https://canhan.gdt.gov.vn/

In case an individual does not have a login account, they need to register an account (1) to log in to the system.

Step 2: Log in to the system

After you have a login account, select “Log in” and fill in the appropriate information fields as required including “Tax code and “Check code”. Then you click “Continue”. You need your PIT code and password to log in to the system.

Step 3: Click on “Tax finalization” then click “Online declaration” to declare tax finalization information

You must fill in and declare accurately the following information:

1. Sender’s name: The system fills in automatically according to registration information.
2. Contact address: The system fills in automatically according to registration information.
3. Contact phone: Automatically according to tax registration information.
4. Email address: Automatically according to tax registration information.
5. Choose declaration: You choose the declaration suitable for your case.
6. Tax Department: The system fills in automatically according to registration information.
7. Tax Sub-department: Automatic filing system according to registration information.
8. Type of declaration: Depending on the case, you can choose an official declaration or an additional declaration.
9. Declaration year: Automatic filling system according to registration information (can be edited).

Declaration selection

In the declaration selection section, in case you self-finalize personal income tax, you will choose declaration 02/QTT-TNCN – Personal income tax finalization declaration (TT80/2021)

Cases where individuals self-finalize personal income tax

Case 1:

Taxpayers have only 01 direct source for tax declaration in the year due to working at international organizations, Embassies, Consulates in Vietnam or sources from abroad (no deduction at source). Then, the taxpayer selects the tax agency that was declared directly during the year in the box “Tax Department” to directly declare taxes during the year.

Case 2:

Taxpayers who directly declare taxes in the year have 02 or more sources, including cases where they have both income that is subject to direct declaration during the year and income that has been deducted by the income-paying organization.

Case 3:

Taxpayers who do not directly declare taxes during the year only have income that is subject to deduction through the income-paying organization. Then declare information about changing workplace.

In case of Tax finalization: You choose “Finalization by calendar year”

Type of declaration: You choose “Official declaration”

After completing the above information, click “Continue”.

Step 4: Declaring tax payment information on the tax return according to the form.

Be sure to fill in all information fields completely and accurately. After filling in the information, click “Complete declaration”.

Step 5: Select XML output to download the completed sample declaration file to your computer.

Step 6: Select “Submit declaration” then enter “Check code” to authenticate submission of declaration and click “Continue”.

After completing the system, there will be a notification of the successful submission of the declaration.

Step 7: At the step of selecting “Export XML”, the system will send the declaration file in XML format. The payer must “Print the declaration” to submit to the tax authority for deduction documents.

Taxpayers print the declaration and submit it to the Tax authority.

Open the “XML Output” file, choose to print 02 copies, then sign taxpayer’s name.

Note: Payers download the iTax Viewer, which is an application to read electronic tax declarations in XML format released by the General Department of Taxation to open the file.

Step 8: Submit tax deduction documents and tax declaration: Taxpayers bring ID cards, tax deduction documents, and tax declaration (with signature) and submit dossiers to the one-stop department of the submitted Tax Authority to complete.

Personal income tax finalization service for foreigners of Viet An Tax Agent

Personal income tax finalization service for foreigners is a special field that Viet An Tax Agent can provide to foreign clients.

• Tax regulation consultancy for foreigners: Viet An tax agent has knowledge and experience in tax regulations related to foreigners. Our experts will help taxpayers understand the specific tax regulations and legal requirements applicable to foreigners when finalizing personal income tax.
• Identify sources of income and tax deductions: Viet An Tax Agent will assist taxpayers in identifying sources of income from different sources such as salary, interest, dividends, commissions, business activities, and investments. They will provide you with information about applicable tax deductions and help taxpayers optimize the amount of tax payable.
• Related legal advice and support: Viet An Tax Agent will provide you with legal advice and assistance related to personal income tax finalization for foreigners. Our specialists will answer questions and help taxpayers understand the process and related legal and tax requirements.
• Representation before tax authorities: Viet An tax agents can represent taxpayers as authorized before tax authorities during tax finalization. We will work with tax authorities to resolve issues and procedures related to the personal income tax finalization of clients.

Through Viet An’s tax finalization service, taxpayers ensure compliance with tax laws and regulations, minimize legal risks, and enjoy maximum benefits in the personal income tax finalization process. Please contact Viet An Tax Agent for advice and support on personal income tax finalization services quickly, promptly, and accurately!