Individual Income Tax Finalization for Foreigners

Deadline for Filing Tax Finalization

For foreign individuals working until the end of the calendar year (December 31):

According to Article 16 Circular 156/2013/TT-BTC: The deadline for submitting tax finalization dossiers is no later than the 90th day from the end of the calendar year.

- In the case of foreign individuals residing in Vietnam who authorize personal income tax finalization, organizations or individuals paying the income shall finalize the tax for the individual at the time of personal income tax finalization, no later than the 90th day from the end of the calendar year.- If foreign individuals residing in Vietnam do not authorize personal income tax finalization, the organizations or individuals paying the income are not required to finalize the tax for these individuals.

For foreign individuals terminating labor contracts within the calendar year:

According to the guidelines in Article 16 Circular 156/2013/TT-BTC and Article 32 Law on Tax Administration: Foreign individuals residing in Vietnam who terminate their labor contracts must finalize taxes with the tax authority before departure, no later than the 45th day from the termination of the contract.

In cases where it is not possible to finalize personal income tax due to urgent circumstances preventing the preparation of necessary documents, organizations or individuals paying the income are responsible to the tax authority for the personal income tax of the individual. The individual may authorize the organization or individuals paying the income to finalize personal income tax on their behalf no later than the 45th day from the individual’s departure.

Tax Finalization for Foreigners Working in Vietnam for Less than 183 Days, More than 183 Days

Circular 111/2013/TT-BTC stipulates:

- In the case of foreign individuals present in Vietnam for less than 183 days, they are considered non-residents. Organizations or individuals paying the income should withhold personal income tax at a rate of 20% on the total income paid to the non-resident each time the payment is made.- Foreign individuals present in Vietnam for more than 183 days are considered residents. If they authorize personal income tax finalization to organizations or individuals paying the income, those organizations or individuals should finalize the tax for the individual at the time of personal income tax finalization as stipulated.

Family Circumstance Deductions

According to the guidelines in Article 9 Circular 111/2013/TT-BTC, family circumstance deductions are the amounts deducted from taxable income before tax calculation on income from business activities, salaries, and wages of individual taxpayers residing in Vietnam. If residents have both business income and salary or wage income, the family circumstance deduction is applied once to the total income from business activities and salary or wages.

The family circumstance deduction is stipulated as follows:

- For the taxpayer: VND 9 million/month, VND 108 million/year.- For each dependent: VND 3.6 million/month.

Foreign individuals residing in Vietnam can apply family circumstance deductions for themselves from January or from the month they first arrive in Vietnam until the month their labor contract ends and they leave Vietnam in the tax year (calculated by full month).

Taxpayers can apply family circumstance deductions for dependents if the taxpayer has registered and been issued a tax code.

If the taxpayer has not applied family circumstance deductions for dependents during the tax year, they can apply deductions for dependents from the month the maintenance obligation arises when the taxpayer finalizes taxes and registers for family circumstance deductions for dependents.

Offsetting Personal Income Tax After Tax Finalization

Paragraph 4, Paragraph 5, Article 33 Circular 156/2013/TT-BTC and Article 22 Circular 92/2015/TT-BTC stipulate:

Organizations and individuals paying income from salaries or wages, authorized by individuals to finalize personal income tax, are responsible for offsetting excess tax paid, tax deficiencies, and deducting the amount of tax still owed, and reimbursing individuals for excess tax paid when finalizing taxes.

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