(+84) 9 61 67 55 66
info@vietanlaw.vn

Tax services for foreign representative offices in Vietnam

According to Clause 2 Article 16 of the Law on Commerce 2005, foreign traders have rights to establish representative offices in Vietnam. However, foreign representative offices in Vietnam only can conduct some commercial promotion activities but not profitable activities as prescribed in the law. Therefore, a foreign representative office in Vietnam has fewer tax duties than an enterprise.

According to Clause 3 Article 17 of the Law on Commerce 2005, foreign representative offices have rights to recruit Vietnamese or foreign employees to work there. Due to that, personal income tax is the only tax duty of a foreign representative office.

To determine the payable tax, foreign representative offices have to do the tax audit. Tax audit is the process of calculating and checking all the revenues and expenses during the tax term to establish grounds for declaring and paying tax. Simultaneously, tax audit may be the grounds for tax exempt, reduction and refund.

Personal income tax audit for foreign representative offices:

Taxable incomes of people working at representative offices are wages regulated at Clause 2 Article 3 of the Law on Personal income tax 2007. Duties to declare, deduct, pay and audit personal income tax for workers of a representative office belong to it.

During the tax audit process, a representative office could consider and list out kind of incomes eligible for tax exemption or tax reduction to claim for it. According to Clause 1 Article 62 of the Law on Tax administration:

“If taxpayers determine by themselves tax amounts to be exempted or reduced, a tax exemption or reduction dossier includes:

  • Tax declaration form;
  • Documents related to determination of the tax amount to be exempted or reduced.”

Taxpayers are residents and non-residents:

  • Residents:
  • Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of their presence in Vietnam;
  • Having a place of habitual residence in Vietnam, which is a registered place of permanent residence or a rented house in Vietnam under a definite contract;
  • Tax period: Annual.
  • Non-residents:
  • People who do not satisfy the above conditions;
  • Tax period: Upon each time of income generation.

Besides that, tax audit also helps representative offices establish grounds for tax refund if paid tax amounts are larger than payable tax amounts. Tax audit is a complicated duty related to many legal regulations.

If clients have any question about tax audit and tax law, please feel free to contact Viet An Law Firm. We are willing to give legal advice and support you during the procedures!

Related Acticle

Tax accounting for representative offices of foreign traders

Tax accounting for representative offices of foreign traders

According to the provisions of Clause 2, Article 16 of the Commercial Law 2005, foreign traders have the right to establish a representative office in Vietnam. However, representative offices are…
Steps to prepare year-end financial statements for businesses in Vietnam

Steps to prepare year-end financial statements for businesses in Vietnam

Preparation of year-end financial statements is one of the important and mandatory tasks for every business, regardless of the size or type of operation. Financial statements not only reflect the…
What does the year-end financial statement dossier include in Vietnam?

What does the year-end financial statement dossier include in Vietnam?

The year-end financial statement is an important document that comprehensively reflects the financial situation and business results of the enterprise after one year of operation. This is not only a…
Tax declaration services for business households in Vietnam

Tax declaration services for business households in Vietnam

Streamline tax declarations for your business household in Vietnam. Our services simplify compliance, saving you time and hassle. The development of e-commerce has brought a lot of convenience to consumers.…
Tax accounting consulting services for foreign-invested (FDI) enterprises

Tax accounting consulting services for foreign-invested (FDI) enterprises

Foreign-invested enterprises usually have to deal with a lot of challenges in complying with legal regulations on accounting and taxation in Vietnam. Grasping and implementing these regulations not only helps…

CONTACT VIET AN LAW

In Hanoi: (+84) 9 61 67 55 66
(Zalo, Viber, Whatsapp, Wechat)

WhatsApp Chat

whatsapp-1

In Hochiminh: (+84) 9 61 67 55 66
(Zalo, Viber, Whatsapp, Wechat)

WhatsApp Chat

whatsapp-1

ASSOCIATE MEMBERSHIP