Annual personal income tax settlement

FOREIGN EMPLOYEES IN VIETNAM

Upon resident or non -resident status in Viet Nam in a calendar year, an expat should declare and settlement of personal income tax for global incomes or  incomes earned within Vietnam’s territory, regardless of the location of payment and receipt. Taxable amount / tax rates methods of declaration for resident and no resident are completely different.

One stop solution on personal income tax for foreigners who are working in Vietnam that to avoid and prevent violations in advance, keep their good standing in optimal manners.

PERSONAL INCOME TAX  –  METHODS OF DECLARATION

The payer of taxable incomes and the person that earns taxable incomes shall declare tax and settle tax in accordance with the procedure provided in guiding documents on tax administration. Rules for declaring tax in some cases:

Tax statements made by non-resident:

1. Non-residents shall declare tax whenever an income is earned in Vietnam only.
2. In case an expat is no-resident in Viet Nam, he or she just pays 20% personal income tax for what they earnt in Viet Nam. 

Tax statements made by payers – for resident employees:

1. The income payers that withhold personal income tax shall declare tax monthly or quarterly. The income payer might not declare tax if no personal income tax is withheld in the month or in the quarter.
2. The monthly or quarterly tax statement shall be made from the first month in which tax is withheld and is applicable to the whole tax year.
3. The income payer that withholds personal income tax on 50 million VND or more in a month in at least one declaration of shall declare tax monthly.
4. The payer of taxable income shall declare and settle tax on behalf of the authorizing person, whether tax is withheld. 

Tax statements directly made by resident employees:

1. The residents that earn incomes from wages paid by international organizations, embassies, and consulates in Vietnam without withholding tax shall directly declare tax quarterly at tax authority. 
2. The residents that earn incomes from wages paid by overseas organizations and individuals shall directly declare tax quarterly at tax authorities.

Tax settlement dates:

1. No later than the last day of the third month from the end of the calendar year or fiscal year for annual tax settlement dossiers; no later than the last day of the first month of the calendar year or fiscal year for annual tax declaration dossiers.
2. No later than the last day of the fourth month from the end of the calendar year for personal income tax settlement dossiers of individuals directly settling taxes.
3. No later than December 15 of the previous year for lump-sum tax declaration dossiers of business households and business individuals paying tax by the lump-sum method; In the case of new business households and individuals, the deadline for submitting lump-sum tax declaration dossiers is no later than 10 days from the date of commencement of business.

In particular,  the deadline for annual personal income tax settlement is stipulated as follows:

1. No later than March 31 for annual tax settlement dossiers.
2. No later than May 4 for personal income tax settlement dossiers of individuals directly settling taxes.

Personal income tax refund:

1. The refund of personal income tax applies to the persons that have registered and obtain tax codes when they submit the tax settlement form. 
2. If the person that has delegated the income payer to settle tax, tax refund shall be made via the income payer. The income payer shall offset the overpaid and underpaid tax. After offsetting, the overpaid tax shall be offset against the tax in the next period or refunded on request. 
3. The person that declares tax directly may choose to claim a tax refund or offset it against the tax in the next period at the same tax authority.
4. Person eligible for the refund of personal income tax that submits the tax settlement behind schedule is exempt from fines for overdue tax statement.

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Read more:

• The 08 compliance procedures expats working in Vietnam – What you shall keep in mind
• Personal income tax on incomes from wages (Taxable incomes for non-resident)
• Personal income tax in Vietnam – 10 types of taxable income and tax rates
• Taxable income and methods of declaration for Expats – personal income tax in Vietnam
• Personal income tax for foreign investors – managers – experts in Vietnam
• Non-taxable – condition for personal income tax exemption and non-taxable (part 1)
• Non-taxable – condition for personal income tax exemption and non-taxable (part 2)
• Who should directly declare tax to tax authorities?