In case employee working in abroad (have foreign citizenship) receive half of his salary in Vietnam, half in abroad. So how he has to pay Personal income tax (PIT) in Vietnam, (the residing time in Vietnam is under 183 days)?
If foreigners working in Vietnam and receiving salary both in Vietnam and abroad, how PIT is calculated (residing time in Vietnam is under 183 days)? Is tax settlement made for them? Apply under the PIT tariff for Vietnamese or foreigner?
There are two cases for foreigner:
Case 1: For employee is foreign employee present in Vietnam (the present of such individual on Vietnamese territory) less than 183 days in calendar year or 12 consecutive months from the date that he/she present in Vietnam and not have permanent accommodation in Vietnam (not have permanent resident registration address in accordance with the law on resident or not rent house in Vietnam; if rent house in Vietnam but lease term less than 90 days) then this case is considered as not permanent individual following regulation in Clause 1 and Clause 2, Section I, Part A of Circular No. 84/2008/TT-BTC.
As stipulated in Point b, Clause 1, Article 2 of Decree No. 100/2008/ND-CP dated 8 September 2008 of the Government stipulate in detail a number of articles of the PIT law then for non-resident individual, taxable income is income that arise in Vietnam, regardless of where income is paid.
Therefore, for individual not reside in Vietnam, he/she only has to pay PIT for the salary that arise in Vietnam, salary that arise in abroad will not incur PIT following PIT law.
Following stipulation in Clause II, section C of Circular No. 84/2008/TT-BTC then PIT for income from salary, wage of individual that not reside in Vietnam are determined by taxable income of salary, wage multiply with (x) 20% tax rate.
For PIT from salary, wage of non-resident individuals are not required for tax settlement (following stipulation in Section D of Circular No. 84/2008/TT-BTC).
Case 2: For individual present in Vietnam less than 183 days in calendar year or within 12 consecutive months from the first day in Vietnam but has permanent accommodation in Vietnam following the 2 herewith cases: Have permanent resident registration address as per regulation in the law of residence (that mean have registered accommodation and marked on the permanent or temporary residence card that issued by a competent authority of the Police Ministry) or have renting house in Vietnam as per regulation on accommodation, with the duration of the lease from 90 days or more in the tax year, as follows:
- Individuals who not yet have or not have permanent registered accommodation, or not granted permanent/temporary residence card but have total house renting day under leasing contract from 90 days up in the tax year will be considered as residence individuals, including case rent in different area.
- House rent for living including hotel, guest house, motel, residing in working place, head office, etc. not distinguish individuals themselves rent a house or employer rent house for employee.Following stipulation in Clause 1, Section I, Part A of Circular No. 84/2008/TT-BTC then the above case is considered as residence individual. Therefore, as per stipulation in Point a, Clause 1, Article 2 of Decree No. 100/2008/ND-CP, dated 8 September 2008 of the Government has detail stipulated a number of articles in the PIT law then taxable income of residence individuals is income that arising in and outside Vietnamese territory, not distinguish where income is paid.
Therefore residence individuals must pay PIT for their arising salary in Vietnam and in abroad.
About PIT for income from salary, wage of residence individuals is calculated following the partial progressive PIT tariff that is stipulated in Clause 4, Section I, Part B of Circular No. 84/2008/TT-BTC.
|PIT rank||Taxable income/year (million dong)||Taxable income/year (million dong)||PIT tariff (%)|
|1||to 60||to 5||5|
|2||over 60 to 120||over 5 to 10||10|
|3||over 120 to 216||over 10 to 18||15|
|4||over 216 to 384||over 18 to 32||20|
|5||over 384 to 624||over 32 to 52||25|
|6||over 624 to 960||over 52 to 80||30|
|7||over 960||over 80||35|
For residence individual is foreigner when he/she finish labor contract in Vietnam, before leaving the country he/she must make the tax settlement with the tax organ. Other cases are exempt from tax settlement (as defined in Clause 2.3, Section II, Part D of Circular No. 84/2008/TT-BTC).
For Vietnamese individual:
For Vietnamese individuals working in abroad and receiving salary both in Vietnam and abroad, have residence time in Vietnam less than 183 days but have permanent accommodation in Vietnam (permanent accommodation in Vietnam is understood as the above mentioned case 2), following stipulation in Clause 1, Section I, Part A of Circular No. 84/2008/TT-BTC then the above case is considered as residence individual. PIT calculation is applied the same as above mentioned case 2.
Residence individuals have income from salary, wage must declare the tax settlement in herewith cases:
- Having sum of PIT paid in a year higher than sum of deducted or pay in advance PIT, or arising PIT obligation in the year but has not been deducted or pay in advance yet.
- Having requirement on PIT reimbursement or compensation for the next term.
The PIT law stipulate the only general PIT tariff for residence individual is Vietnamese and even foreigner. The PIT law not prescribe specific PIT tariff for Vietnamese and foreigner.