Identify cases of personal income tax finalization for foreigners

In fact, foreign workers working in Vietnam are divided into many different cases. Therefore, depending on each specific case, the personal income tax settlement method will be different.

1. Personal income tax finalization for foreign individuals residing in Vietnam

Foreigners permanently residing in Vietnam are defined as people holding the nationality of another country, not having Vietnamese nationality but residing, doing business and living permanently in Vietnam. If a foreigner wants to be allowed to legally reside in Vietnam, he or she must apply for a permanent residence card.

For personal income tax finalization, foreign individuals residing in Vietnam will have to fully comply with the regulations at the time taxable income arises like Vietnamese citizens. In case a foreign worker receives income in foreign currency, according to regulations, it must be converted into Vietnamese currency at the average exchange rate.

2. Conditions for an individual to be considered a foreigner residing in Vietnam:

– First: Foreign individuals must be present in Vietnam for at least 183 days or more in 12 consecutive months or 1 year from the first day. The day the individual arrives in Vietnam and leaves is counted as 1 day.

– Second: In Vietnam, a foreign individual must have a permanent residence. In particular, they must comply with the provisions of law on permanent residence registration. This means having a registered residence and recorded in the Permanent Residence Card or Temporary Residence Card issued by the Immigration Department, Ministry of Public Security; or rent a house to live with a rental contract term of at least 90 days or more in the tax year according to the provisions of housing law.

3. Instructions on how to calculate taxes for resident foreigners:

– In case a foreigner residing in Vietnam signs a labor contract of 3 months or more, personal income tax on income from that person's salary and wages is calculated according to the partially progressive tax rate schedule as follows: after: (Unit: million VND)

– In case a foreigner residing in Vietnam signs a labor contract of less than 3 months, tax will be calculated according to the Full table x Tax rate of 10%.