How do foreigners who are sent to work in Vietnam for a period of 5 years under the dispatching contract declare and calculate tax?
What are the regulations on taxpayers for foreigners?
According to Official Letter 2414/TCT-DNNCN in 2022 on personal income tax policy issued by the General Department of Taxation:
"At point a, point b, clause 1, clause 2, Article 1 of Circular 111/2013/TT-BTC stipulates as follows:
“Article 1. Taxpayers
1. A resident is a person who meets one of the following conditions:
a) 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 are 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 will be 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.
b) Having a regular place of residence in Vietnam in one of the following two cases:
…
2. Non-resident individual means a person who does not satisfy the conditions specified in Clause 1 of this Article.”
How do foreigners who are sent to work in Vietnam for a period of 5 years under the dispatching contract declare and calculate tax? (Picture from internet)
How is tax deduction for foreigners regulated?
"At Point b.2 Clause 1, Article 25, Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance guiding:
“Article 25. Tax withholding and tax withholding documents
1. Tax deduction
…
b.3) For individuals who are foreigners coming to work in Vietnam, organizations and individuals pay income based on the taxpayer's working time in Vietnam stated in the contract or written assignment to the taxpayer. working in Vietnam to temporarily deduct tax according to the Partial Progressive Schedule (for individuals who have worked in Vietnam from 183 days in the tax year) or according to the Full Tariff (for individuals with limited tax time). working time in Vietnam under 183 days in a tax year)…
What is the tax period for foreigners?
According to Official Letter 2414/TCT-DNNCN in 2022 on personal income tax policy issued by the General Department of Taxation:
"At Point a, Clause 1, Article 6 of Circular 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance guiding:
“Article 6. Tax period
1. For resident individuals
a) Tax period by year: applicable to income from business and income from salary and wages.
…
In case in a calendar year, an individual is present in Vietnam for less than 183 days, but within 12 consecutive months from the first day of presence in Vietnam, 183 days or more, the first tax period is determined as follows: 12 consecutive months from the first day of presence in Vietnam. From the second year, the tax period is based on the calendar year.”
How can foreigners be sent to work in Vietnam for a period of 5 years under the dispatching contract?
According to Official Letter 2414/TCT-DNNCN in 2022 on personal income tax policy issued by the General Department of Taxation:
Based on the above instructions, in case a foreign worker is sent to work in Vietnam for a period of 5 years under the dispatching contract, he/she shall declare and calculate PIT on tax returns. Personal income in 2021 according to the progressive schedule of parts.
In case in a calendar year, the employee is present in Vietnam for less than 183 days but within 12 consecutive months from the first day of presence in Vietnam, 183 days or more, the employee's first tax period is defined as 12 consecutive months from the first day of presence in Vietnam. From the second year, the tax period is based on the calendar year.
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