Vietnam Personal Income Tax Laws Foreigners Should Know

As the deadline for declaring Personal Income Tax (PIT) is approaching, we are reviewing some tax laws in Vietnam that foreigners working and earning in Vietnam should know and comply.

Law No. 71/2014/QH13 dated 26 November 2014 issued by Vietnam National Assembly amending five tax laws including Law on Personal Income Tax (“PIT”) and Law on Tax Administration provides with regulations on PIT finalization.

Vietnamese Government further issued a number of regulations on tax declaration, payment and finalization, as follows:
1. Decree No. 91/2014/ND-CP dated 1 October 2014, of Government, amending Decree No. 65/2013/ND-CP and Decree No. 83/2013/ND-CP of guidance on the Law on Tax Administration (“Decree 91”). Decree 91 has complemented several exemptions from PIT finalization and comes into effect from 15 November 2014.
2. Circular No. 119/2014/TT-BTC dated 25 August 2014, of the Ministry of Finance, amending and supplementing a number of tax circulars in order to simplify tax formalities (“Circular 119”). Circular 119 has supplemented regulations on PIT obligations of any individual who is a citizen of the country and/or territory entered into an agreement on preventing double taxation with Vietnam.
3. Circular No. 128/2014/TT-BTC dated 5 September 2014, of the Ministry of Finance, guiding the reduction of personal income tax for individuals working in economic zones and border-gate (“Circular 128”). Circular 128 broadens the subject of tax deduction and comes into effect from 20 October 2014.
4. Circular No. 151/2014/TT-BTC dated 1 October 2014, of the Ministry of Finance, guiding Decree 91/2014/ND-CP on various aspects of PIT finalization, providing detail subjects which are not required to finalize PIT.

Tax resident in Vietnam should note that 2014 Personal Income Tax finalization shall be made no later than 31 March 2015.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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