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Personal income tax in Vietnam

Finalizing personal income tax for foreigners is a very complicated business. Therefore, business organizations need to understand tax regulations to avoid errors. Viet An tax agent provides service on personal income tax in Vietnam such as tax finalization service for foreigners quickly and accurately with the following sequence of steps.

Tax VAT Invoice

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.

Scope of determining 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 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.

Personal income tax schedule applicable to foreigners residing

In case a foreigner residing in Vietnam signs a labor contract of 3 months or more

In case a foreigner residing in Vietnam signs a labor contract for 3 months or more, the PIT calculation on income from his/her salary or wages shall be calculated according to the partially progressive tax rate as follows:

(Unit: million VND)

Tax scale Taxable income/year

(million VND)

Taxable income/month

(million VND)

Tax

ratio (%)

1

2

3

4

5

6

7

To 60

Over 60 to 120

Above 120 to 216

Above 216 to 384

Above 384 to 624

Above 624 to 960

Over 960

Up to 5

Over 5 to 10

Over 10 to 18

Over 18 to 32

Above 32 to 52

Above 52 to 80

Over 80

5

10

15

20

25

30

35

In case a foreigner residing in Vietnam signs a labor contract of less than 3 months

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.

Finalization of Personal income tax in Vietnam for foreigners non-residing in Vietnam

Foreign workers who do not reside in Vietnam, ie, 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.

Instructions on how to calculate tax for non-resident foreigners

  • 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%.

Finalization of personal income tax for individuals who are foreigners in some special cases

In addition, for special cases where foreigners are present in Vietnamese territory for less than 183 days in the first calendar year but from 183 days in 12 consecutive months, personal income tax finalization shall be carried out according to the following procedures: separate regulations.

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.

Viet An Tax Agent has a team of experienced experts on personal income tax regulations for foreigners as well as understanding the legal regulations when foreigners generate income in Vietnam. 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!

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