Royal Vietnam would like to summarize the latest instructions from the Department of Taxation on personal income tax for non-resident individuals, applicable in cases where businesses cooperate with foreign experts as follows:
1. Official dispatch responding to Document No. 19112024CV/VQV dated November 19, 2024 and Additional Document No. 13122024CV/VQV dated December 13, 2024 of Valqua Vietnam Co., Ltd. related to personal income tax obligations (PIT). ) for foreign employees (Japanese nationality).
2. Related legal regulations:
– Double taxation avoidance agreement between Vietnam and Japan:
- Income of non-resident individuals from labor in Vietnam is subject to personal income tax.
- Tax exemption if all 3 conditions are met:
+ Staying in Vietnam for less than 183 days in the tax year.
+ The employer does not reside in Vietnam.
+ Income does not arise from a permanent establishment in Vietnam.
– Circular 80/2021/TT-BTC and instructions:
- Dossier for tax exemption and reduction under the Agreement includes form 01/HTQT, residence certificate, labor contract, and related documents.
- First-time tax declaration documents use form 02/KK-TNCN.
3. Opinion of Hai Duong Provincial Tax Department:
- Employees of the Parent Company in Japan who come to provide technical support in Vietnam are determined to be non-resident individuals.
- Income arising in Vietnam is subject to personal income tax, regardless of where the income is paid.
- If an individual meets the conditions for tax exemption or reduction under the Double Taxation Avoidance Agreement, he or she must submit a tax exemption or reduction application according to regulations along with the first tax declaration.
Click here to view Official Dispatch 10982/CTHDU-TTHT on personal income tax policy
