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Vietnamese
PERSONAL INCOME TAX CONSULTING
FOR FOREIGNERS IN VIETNAM
Subjects must declare and finalize personal income tax for foreigners
Based on the provisions of Circular 92/2015/TT-BTC, we can determine whether the foreign worker is a resident or non-resident individual.
Resident individuals earning incomes from salaries, wages or business income must finalize personal income tax
- Having a payable tax amount greater than the withheld or temporarily paid tax amount;
- There is a request to refund the overpaid tax or offset in the next period
When a resident is a foreigner, when he or she ends a contract to work in Vietnam before leaving the country, he/she must make a tax finalization
Determining whether a foreigner is an individual residing or not residing in Vietnam
Foreigners are identified as individuals residing in Vietnam
A foreigner is identified as an individual residing in Vietnam when one of the following conditions is satisfied:
- Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months from the first day of presence in Vietnam, in which the arrival and departure dates are counted as one day.
- Have a regular place of residence in Vietnam, including a registered place of permanent residence or a rented house to stay in Vietnam. Having a term of 90 days or more in a tax year is also a resident individual. Even the case of renting in many places.
Foreigners are individuals who do not reside in Vietnam
- A foreigner is a non-resident when his/her presence in the Vietnamese territory is less than 183 days in a calendar year or for 12 consecutive months from the first day of his/her presence in Vietnam.
- The employee is a foreigner who does not have a regular place of residence in Vietnam, does not have a registered place of permanent residence in accordance with the law on residence, or does not rent a house in Vietnam (finalization of personal income tax) for foreigners)
Dossier for finalization of personal income tax for foreigners
Individuals with wages or money are not authorized to authorize organizations or individuals to pay income for tax finalization
- Tax return form 02/QTT-TNCN attached to Circular No. 92/2015/TT-BTC;
- Appendix form 02-1/BK-QTT-TNCN (in case there is registration of family circumstance-based deduction for dependents);
- A photocopy of the tax amount withheld or temporarily paid in the year or the tax amount abroad;
- Photocopies of invoices evidencing contributions to charity, humanitarian or study promotion funds;
- Individuals earning income from international organizations, embassies or consulates, etc. must have documents proving the amount paid by that unit.
Note the special cases:
- If the income-paying organization does not issue tax withholding documents to individuals because it has terminated its operation, the tax authorities will use the industry’s basis to consider the dossiers without having to have tax withholding documents;
- If the law of the foreign country does not issue a tax payment certificate, the person may submit a copy of the tax withholding certificate issued by the income authority or a photocopy of the bank statement with the tax paid abroad with confirmation. receipts from taxpayers.
Foreign individuals authorize organizations and individuals to pay income for tax finalization on behalf of
Individuals, when authorizing organizations to pay tax finalization, must prepare:
- Form No. 02/UQ-QTT-TNCN issued together with Circular No. 92/2015/TT-BTC;
- Invoice document table;
- Photocopy of proof of contributions to charity, humanitarian or study promotion funds.
Time to finalize personal income tax for foreigners
- The tax year is the calendar year, the tax finalization will be done at the end of the year.
- In the first year of residence in Vietnam, an individual foreign worker who resides for 183 days or more must finalize for the entire calendar year (the result before coming to Vietnam and the part of tax payment in the foreign country). outside corresponding to the time that has not yet arrived in Vietnam will be deducted).
- In the first year of residence in Vietnam, if the individual foreign worker stays in Vietnam for no more than 183 days, the first tax year is 12 consecutive months.
- In subsequent years, if that individual becomes a resident, the next tax year will be the calendar year (year-end settlement).
- The individual left Vietnam during the year. The final tax year will be counted to the month in which the individual foreign worker leaves Vietnam.
Formula for calculating personal income tax for foreigners
For foreigners who are non-resident individuals
According to Clause 1, Article 18 of Circular 111/2013/TT-BTC, personal income tax on income from salaries and wages is determined according to the following formula:
Personal income tax = Taxable income from wages and salaries x 20%
For foreigners who are resident individuals, the following partial progressive tax rates are calculated
- If the labor contract is less than 3 months, it is calculated by the formula:
Personal income tax = Taxable income from wages and salaries x 20%
- If the labor contract is 3 months or more, it will be calculated according to the progressive schedule
Note: Resident individuals earning incomes from salaries and wages from abroad shall make a quarterly tax declaration directly to the tax office.
Location of submission of personal income tax finalization documents for foreigners
– Filed at the General Department of Taxation if the foreigner only has income from wages and salaries and is subject to direct tax declaration during the year.
– Submit to the agency directly managing the organization that has paid the final income in case the foreigner has income from two or more places and is subject to self-settlement.
– If the foreigner changes the place of work but does not calculate the deduction for family circumstances at the last working organization, it shall be paid at the Tax Department of the place of residence. In addition, in some cases such as not signing a labor contract or signing a contract with a period of less than 3 months or earning income from many places but at the time of settlement, do not work anywhere, it is necessary to submit a dossier of decision. at the place where the foreigner resides.
– Submit the finalization dossier at the Sub-department of Taxation where the business is located in the following cases:
- If a foreigner is an individual or a group of individuals doing business in one place, the personal income tax finalization dossier will be directly handled by the local tax department;
- Foreigners are agents with business registration (personal income tax finalization for foreigners).
– In case the individual is a foreigner doing business in many places, the application will be submitted at the place where the tax code is first issued.
Application deadline
According to regulations, the deadline for finalization of personal income tax is the 90th day from the end of the calendar year. The deadline for tax payment is the last day of the deadline for submitting the tax finalization declaration.
Phone: (+84) 961 366 238
Email:
- vphn@siglaw.com.vn
- vphcm@siglaw.com.vn
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