Personal income tax settlement for individuals who are foreigners not residing in Vietnam

Foreign employees who do not reside in Vietnam, that is, do not meet the above conditions for residence in Vietnam, must make personal income tax settlement according to the following regulations:

– An employee working in Vietnam is the individual's presence in Vietnam for less than 183 days in a calendar year or for 12 consecutive months calculated from the first day the person is present in Vietnam (based on the date of entry stamped on the Passport).

– Foreign workers who do not have a permanent residence in Vietnam, do not register a permanent residence according to the provisions of law or do not have a long-term housing lease contract in Vietnam.

For example: Mr. Wichapas is a Thai national who came to Vietnam to work as a chef on March 18, 2018. In 2018, up to December 31, 2018, he was present in Vietnam for a total of 163 days. Since his stay in Vietnam was less than 183 days, in this case he is determined to be a non-resident individual.

In there:

– In case an individual is a non-resident foreigner who authorizes the settlement of personal income tax: The individual has income at the organization with a contract of 3 months or more, at the time of the personal income tax settlement, he/she can authorize the tax settlement. The unit receiving the authorization for settlement will only perform the personal income tax settlement for the income that the individual is paid by the organization.

– In case an individual is a non-resident foreigner who directly settles tax: That individual has income from salary, business or from many taxpayers and has excess tax to pay or additional tax to pay or offset in the following declaration periods, then he/she must self-finalize personal income tax.

Instructions on how to calculate taxes for non-resident foreigners:

Regardless of whether the Labor Contract of a foreigner not residing in Vietnam has a signed term of less than 3 months or 3 months or more, tax is calculated according to the Full Schedule x Tax Rate of 20%:

Note: Taxable income of non-resident individuals is income arising in Vietnam, regardless of the organization or place where this income is paid. Personal income tax from salaries and wages of non-resident individuals does not have to be finalized.

In addition, in special cases where foreigners are present in Vietnam for less than 183 days in the first calendar year but more than 183 days in 12 consecutive months, personal income tax settlement shall be carried out according to separate regulations.

Above are the regulations that businesses need to pay attention to regarding personal income tax settlement for foreigners. If you find this article useful, please share it with others.