Personal income tax is a tax calculated on an individual’s income sources earned from business activities and other sources such as salaries and wages paid by employers, from capital investments, capital transfer, real estate transfer, prize-winning, copyright, and inheritance gifts. Regardless of Vietnamese or foreigners, depending on residence status, and income level, an individual may have to pay from 5% to 35% of the income earned… Among them, income from salary and wages is the most common and also has the most detailed regulations.
Personal income tax declaration, settlement, and payment are very important tasks for not only the employer but also the employees.
AUTHORIZED PERSONAL INCOME TAX FINALIZATION
- Employees are permitted to authorize income-paying organizations and individuals to finalize their personal income tax (PIT) income in the following cases:
- Individuals only earn income from wage or salary, signs a labor contract for at least 03 months with an income-paying organization or individual, and in fact still works there when authorizing the finalization, even when he has not worked for the full 12 months in the year.
- Individuals work under a more than 3 months labor contract, earn multiple incomes from different companies less than 10 million VND a month and 10% tax has been deducted.
- Individuals, apart from the aforementioned income from salaries and wages, earn additional income from other places, income from leasing houses or land use right less than 20 million VND per month and already pay taxes.
- Income-paying bodies, being organizations or individuals, should finalize their employees’ tax imposed on the income paid by that income-paying body only.
DIRECT PERSONAL INCOME TAX FINALIZATION
- Individuals that earn incomes from salaries and wages paid by international organizations, embassies, consulates in Vietnam without tax deduction, shall submit personal income tax declaration and tax finalization by themselves on a quarterly basis.
- Individuals that earn incomes from salaries and wages paid by income-paying bodies abroad shall submit tax finalization declaration by themselves on a quarterly basis.
- Individual works under a more than 3 months labor contract, earn multiple incomes from different companies more than 10 million VND a month and 10% tax has been deducted.
- The individual, apart from the aforementioned income from salaries and wages, earns additional income from other places, income from leasing houses or land use right more than 20 million VND per month and already pay taxes.
- Taxable amount/tax rates of resident and non-resident are completely different. Fail to properly finalize PIT income will lead to serious fines from the tax department. To verify a proper method of personal income tax declaration (PIT) for expats and residents, or other procedures relating to tax services, please contact us for further consultancy.
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- Doing business in Vietnam: internal salary and wages policy
- Taxable incomes from wages and remunerations
- The annual licensing fees
- Personal income tax (PIT): annual pit settlement key notes
- Investment in Vietnam: incentives on corporate income tax (CIT)
- Tax compliance procedures for year-end: exclusive notices for CEO