What are the conditions for determining a Vietnamese resident?

What are the conditions for determining a Vietnamese resident?

The conditions for determining a Vietnamese resident for the purpose of calculating personal income tax are stipulated in Clause 1, Article 1 of Circular 111/2013/TT-BTC.

Specifically, an individual is considered a resident if they meet one of the following criteria:

Criterion 1: The individual is present in Vietnam for 183 days or more within a calendar year or for 12 consecutive months from the first day of entry into Vietnam, counting the day of arrival and the day of departure as one day.

The duration of entry and exit will be determined based on the confirmation stamp of the immigration authority on the individual's passport (or laissez-passer). In cases where an individual enters and exits on the same day, it is counted as one day of residence.

The time an individual is present in Vietnam is considered time of residence in Vietnam's territory.

Criterion 2: The individual has a fixed place of residence in Vietnam under one of the following two cases:

(1) Has a stable residence according to the law on residence:

- For Vietnamese citizens: A stable residence is where the individual lives long-term without any time limit at a fixed address and has registered for permanent residence according to the legal provisions.

- For foreigners: A stable residence is the place recorded in the Permanent Residence Card or the registered temporary residence where the Temporary Residence Card is issued by the competent authority.

(2) Has a rental house in Vietnam with a lease contract lasting 183 days or more in the tax year:

- Individuals who do not have a stable residence as outlined in case 1 but have a total house rental duration of 183 days or more in the tax year are also considered residents in Vietnam, including cases of renting multiple places.

- The rented accommodation can be hotels, boarding houses, lodging, workplaces, offices, without differentiating between whether the individual rents themselves or the employer rents on behalf of the employee.

- In case an individual has a stable place of residence in Vietnam but the number of days present in Vietnam is less than 183 days in the tax year and cannot prove residence in another country, they are still considered a resident in Vietnam.

Proof of residence in another country will be based on a Certificate of Residence or, if such a certificate is not issued by that country, the individual can provide a copy of their passport to prove their duration of residence.

What are the conditions for determining a Vietnamese resident? (Image from the Internet)

Which income of a Vietnamese resident will apply the annual personal income tax calculation period in Vietnam?

According to Article 7 of the Personal Income Tax Law 2007 (amended by Clause 3, Article 1 of the Amended Personal Income Tax Law 2012) stipulates:

Tax Calculation Period

1. The tax calculation period for Vietnamese residents is prescribed as follows:

a) An annual tax calculation period applies to income from business; income from wages and salaries;

b) Tax calculation for each income occurrence applies to income from capital investment; income from capital transfer, excluding income from securities transfer; income from real estate transfer; income from prizes; income from copyrights; income from franchising; income from inheritance; income from gifts;

c. Tax calculation either per transfer occurrence or annually for income from securities transfer.

2. The tax calculation period for non-Vietnamese residents is calculated per occurrence of income for all taxable income.

The annual personal income tax calculation period applies to income from business and income from wages and salaries.

Which income from wages and salaries is subject to personal income tax in Vietnam?

Based on Clause 1, Article 2 of the Personal Income Tax Law 2007, as amended by Clause 1, Article 1 of the Amended Personal Income Tax Law 2012, the regulations are as follows:

- Wages, salaries, and payments of a similar nature;

- Allowances and subsidies, except for the following allowances and subsidies:

+ Allowances, subsidies under the law on incentives for people with meritorious services; national defense and security allowances;

+ Allowances for hazardous or dangerous jobs in industries or jobs in environments with hazardous or dangerous elements;

+ Attraction allowances, regional allowances according to legal provisions;

+ Sudden difficulty allowances, accident, and occupational disease allowances, one-time maternity or adoption benefits, allowances due to reduced working capacity, one-time retirement allowances, monthly survivorship benefits, and other allowances according to social insurance law;

+ Severance pay, job loss allowances as stipulated by Labor Law; allowances with a nature of social protection and other allowances and subsidies not in the nature of wages or salaries according to the Government of Vietnam's regulations;

+ Remunerations in various forms;

+ Payments received from participation in business associations, boards of directors, control boards, management boards, and other organizations;

+ Other benefits that the taxpayer receives in money or non-monetary form;

+ Bonuses, except for bonuses attached to titles awarded by the State, bonuses attached to national prizes, international prizes, bonuses for technical innovations, inventions, innovations recognized by competent state agencies, bonuses for reporting or disclosing acts violating the law to competent state agencies.

Note:

The portion of salary paid for night work or overtime that is higher than the daytime work salary according to the law, and income from wages and salaries of Vietnamese sailors working for foreign carriers or Vietnamese international transport carriers are exempt from tax.