Foreigners working in Vietnam have clearly rights and responsibilities and especially with understanding of Personal Income Tax (PIT). Identifying PIT which can help individuals to optimize with their taxes as well as give employers to identify more competitive pay packages.

According toVietnam’s Law on Personal Income Tax, Individuals are subject to PIT based on their tax residency status. PIT payers are identified as both resident and non- resident. It is the same for foreign individuals, depending on the classification into resident and non-resident individuals to determine their PIT obligations in Vietnam.

 

For the purposes of taxation, which conditions for an individual to be seen as a resident of Vietnam?

A foreign individual may be considered as tax resident of Vietnam if any one of the following conditions:

• The foreign individual was physically present in Vietnam for 183 days or more during a calendar year or 12 consecutive months from the initial date of arrival in Vietnam.

• Having a permanent residential place in Vietnam.
• In the case of a Vietnamese citizen, a residential location for which permanent residence has been registered means the specific place where such citizen lives and earns their living on a regular and stable basis and not only for a term, and for which such citizen has conducted registration pursuant to the Law on Residence.
• In the case of a foreigner, a residential location for which permanent residence has been registered (the registered place recorded in the resident card or temporary resident card issued by the authority under the Ministry of Public Security). It also includes the situation in which an individual has a leased house or the like (that includes a hotel room, guest house, location of office and so on) in Vietnam with a total lease term of 183 days or more in the tax year, and the individual is not able to provide a certificate of tax residency of a country/jurisdiction other than Vietnam.

 For example: Mr. John is a foreign individual working as an architect in Vietnam and his company rents for him a house, the termon the rental contract is 2 years from February 2018. However, on May 14, 2020 Mr. John  flew to his hometown within 1 week and then continued to return back to Vietnam to work. Mr. John has the time in Vietnam up to the time of his flight back home is more 183 days. So, Mr. John is defined as a resident in Vietnam.

So, how to be a non- resident individual of Vietnam?

Foreigners who do not meet the above-mentioned conditions are considered as a non-resident of Vietnam. A non-resident of Vietnam is taxed in Vietnam only on their Vietnam-sourced income. Vietnam-sourced income is the income earned or received in relation to the employment and the performed transaction of that foreign individual in Vietnam regardless of the origin or country where the remuneration is paid.

For example: Mrs. Rose is a foreigner coming to Vietnam from February 25, 2020 to March 20, 2020 then flew to Korea. Mrs. Rose was in Vietnam for a total of 15 days. Because of less than 183 dáy so she was identified as a non- resident individual.

 

Conclusion

If you have any further questions for help from an abroad job consultancy in Vietnam. Apolo Lawyers which is a domestic law firm with experienced knowledge in legal advice in general and labor consulting in particular. We will assist not only foreign workers but also businesses to hire foreign labor or Vietnam recruitment service. Please contact us to be consulted in more details.

For further information, please contact:

Apolo Lawyers - Solicitors & Litigators

Address: 10th Floor, PaxSky Building, No. 51 Nguyen Cu Trinh Street, District 1, Ho Chi Minh City

Binh Thanh Branch

Address: 9th/F, Tower K&M Building, 33 Ung Van Khiem St., Binh Thanh Dist., HCM City

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Tel: (028) 66.701.709 / (028) 35.059.349

Mobile 1/ Whatsapp 1: 0939.486.086 / Mobile 2/ Whatsapp 2: 0908.043.086

Email: contact@apolo.com.vn

Website: www.apololawyers.com

APOLO LAWYERS