Today LSX Lawfirm will give you an article about: “Personal income tax declaration for foreigners in Vietnam”, as follows:
Legal grounds
- Decree No. 152/2020/ND-CP
- Circular No. 111/2013/TT-BTC
The case the foreign worker is not eligible for a work permit in Vietnam
Pursuant to Clause 3, Article 7 of Decree 152/2020/ND-CP stipulating cases; where foreign workers are not eligible for work permits in Vietnam and recruiting and managing Vietnamese laborers working for Foreign organizations and individuals in Vietnam have the following specific contents:
Article 7: Cases where foreign workers are not subject to work permits
…
Internal movement of enterprises within 11 service industries in Vietnam’s service commitment schedule with the World Trade Organization, including: business, information, construction, distribution, education , environment, finance, health, tourism, culture, entertainment and transport.
Who must pay personal income tax in Vietnam?
Pursuant to Clauses 1 and 2, Article 1 of Circular 111/2013/TT-BTC and Article 2 of Circular 119/2014/TT-BTC stipulating who must pay personal income tax as follows:
A resident is a person who meets one of the following conditions:
- Being present in Vietnam for 183 days or more in a calendar year or for 12 consecutive months from the first day of presence in Vietnam; in which the arrival and departure dates counted as one (01) day. The date of arrival and departure is based on the certification of the immigration authority on the passport (or travel document) of the individual upon arrival and departure from Vietnam. In case of entry and exit on the same day, it counted as one day of residence.
- An individual present in Vietnam under the guidance at this point is his or her presence in the Vietnamese territory.
- Having a regular place of residence in Vietnam in one of the following two cases:
- Having a regular place of residence in accordance with the law on residence:
- For Vietnamese citizens: permanent residence is a place where an individual lives regularly and stably for an indefinite period at a certain place of residence and has registered for permanent residence in accordance with the law on residence.
Then
- For foreigners: the place of permanent residence is the place of permanent residence stated in the permanent residence card or the place of temporary residence when applying for a temporary residence card issued by a competent agency of the Ministry of Public Security.
- Having a rented house to live in in Vietnam according to the provisions of the law on housing, with the term of the lease contract from 183 days or more in the tax year, specifically as follows:
- Individuals who have not or do not have a regular place of residence as guided at Point b.1, Clause 1 of this Article, but have a total number of days of renting a house to live in under lease contracts for 183 days or more in a tax year. identified as a resident individual, even in the case of renting a house in many places.
- Houses rented for accommodation include hotels, guest houses, motels, motels, workplaces, office buildings, etc., regardless of self-employed individuals or employers. hiring for workers.
Then
In case an individual has a regular place of residence in Vietnam as prescribed in this Clause; but is actually present in Vietnam for less than 183 days in a tax year; but he cannot prove that he/she is a resident of any country that individual is an individual residing in Vietnam.
Proof of being a resident of another country is based on the Certificate of Residence. In case an individual belongs to a country or territory that has signed a tax agreement with Vietnam that does not have regulations on granting a certificate of residence; the individual shall provide a photocopy of his/her passport to prove the period of residence.
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Non-resident individual means a person who does not meet the conditions specified in Clause 1 of this Article.
Is it necessary to declare personal income tax for foreigners in Vietnam?
Pursuant to Clause 2, Article 7 of Circular 111/2013/TT-BTC stipulating tax bases for incomes from salaries and wages of resident individuals, specifically as follows:
Article 7. Tax bases for taxable incomes from business, salaries and wages
The tax base for income from business and income from salary and wages is taxable income and tax rate, specifically as follows:
Tax rate
Personal income tax rates for incomes from business, salaries and wages applied according to the partially progressive tax schedule specified in Article 22 of the Law on Personal Income Tax, specifically as follows:
Clause 1, Article 18 of Circular 111/2013/Tt-BTC stipulating the tax bases for income from salary and salary of non-resident individuals; specifically as follows:
“Article 18. For incomes from salaries and wages
Personal income tax on incomes from salaries and wages of non-residents determined by taxable incomes from salaries and wages (×) at the tax rate of 20%.”
In conclusion
If this employee moves within an enterprise within 11 service industries in Vietnam’s service commitment schedule with the World Trade Organization; including: business, information, construction; distribution; education, environment, finance, health, tourism, culture; entertainment and transportation not required to apply for a work permit.
In case the foreign expert satisfies the condition that he or she is an individual residing in the tax year; the income subject to personal income tax – the income generated inside and outside the Vietnamese territory; regardless of the place where the income paid.
In case the foreign expert satisfies the condition that he a non-resident individual in the tax year; his/her personal income taxable income – income generated in Vietnam (regardless of where the income paid and received).
Related questions
Pursuant to Article 13 of Circular 103/2014/TT-BTC, the tax base is the revenue for calculation of corporate income tax and the ratio of corporate income tax to the taxable turnover
Amount of CIT payable = Revenue subject to corporate income tax x Ratio of CIT calculated on taxable turnover
For contractor contracts and subcontractor contracts covering many different business activities, the application of the CIT rate calculated on taxable turnover when determining the payable CIT amount is based on the taxable turnover. CIT for each business activity performed by foreign contractors and foreign sub-contractors according to the provisions of the contract. In case it is not possible to separate the value of each business activity, the CIT rate for the business line with the highest CIT rate shall be applied to the entire contract value.
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