Fulfill tax obligations in Vietnam for income from abroad

On August 4, 2023, Hanoi Tax Department has Official dispatch 56955/CTHN-TTHT on implementing tax obligations for income from abroad.

1. Official dispatch 56955/CTHN-TTHT: 

Accordingly, based on Clause 1, Article 13 Labor Code 2019 Labor contract regulations:

“A labor contract is an agreement between an employee and an employer regarding paid employment, wages, working conditions, rights and obligations of each party in the labor relationship.

In case the two parties agree by a different name but with content expressing the paid employment, salary and management, administration and supervision of one party, it is considered a labor contract.

Base Circular 119/2014/TT-BTC some amendments and additions Circular 156/2013/TT-BTC, Circular 111/2013/TT-BTC, Circular 219/2013/TT-BTC, Circular 08/2013/TT-BTC, Circular 85/2011/TT-BTC, Circular 39/2014/TT-BTC and Circular 78/2014/TT-BTC to reform and simplify tax administrative procedures.

- In Article 2, amend and supplement paragraphs 1, 2, 3, 4 of Article 1 Circular 111/2013/TT-BTC implementation instructions Personal Income Tax Law, Law amending and supplementing a number of articles of the Law on Personal Income Tax and Decree 65/2013/ND-CP detailing a number of articles of the Law on Personal Income Tax and the Law amending and supplementing a number of articles of the Law on Personal Income Tax as follows:

Article 1. Taxpayers

For resident individuals, taxable income is income generated within and outside the territory of Vietnam, regardless of where the income is paid;

… Base Circular 111/2013/TT-BTC Guiding the implementation of the Law on Personal Income Tax, the Law amending and supplementing a number of articles of the Law on Personal Income Tax and Decree 65/2013/ND-CP detailing a number of articles of the Law on Personal Income Tax and the Law amending and supplementing a number of articles of the Law on Personal Income Tax:

- Article 2 stipulates taxable income:

“...2. Income from salaries and wages

Income from salaries and wages is the income the employee receives from the employer, including:

... c) Remuneration received in the form of: goods sales agent commission, brokerage commission; money to participate in scientific and technical research projects; money to participate in projects and schemes; royalties according to the provisions of law on royalties; money to participate in teaching activities; money to participate in cultural, artistic, physical training and sports performances; advertising service fees; Other service fees, other remunerations.”

Base Circular 80/2021/TT-BTC guiding the implementation of a number of articles of the Law on Tax Administration and Decree 126/2020/ND-CP detailing a number of articles of the Law on Tax Administration.

+ Article 19 regulates tax declaration, tax calculation, and personal income tax allocation:

“Declaring taxes and paying taxes:

a) Personal income tax on income from salaries and wages:

... a.2) Individuals with income from salaries and wages who are subject to direct tax declaration to tax authorities include: resident individuals with income from salaries and wages paid from abroad; Non-resident individuals have income from salaries and wages arising in Vietnam but paid from abroad; Individuals with income from salaries and wages paid by international organizations, embassies, and consulates in Vietnam but have not yet deducted taxes; Individual receives bonus shares from the paying unit"

Base Decree 126/2020/ND-CP detailing a number of articles of the Law on Tax Administration:

- Article 8 regulates taxes declared monthly, quarterly, annually, each time a tax liability arises and tax finalization declaration.

“...2. Other taxes and revenues belonging to the state budget declared quarterly include:

...c) Personal income tax for organizations and individuals paying income subject to tax deduction according to the provisions of personal income tax law, and the organization or individual paying such income is subject to tax deduction. quarterly value-added tax and the option to declare personal income tax quarterly; Individuals with income from salaries or wages directly declare tax to the tax authority and choose to declare personal income tax quarterly."