Foreigners Personal Income Tax Declaration Service

 

For foreigners working and living in Vietnam, understanding the regulations on personal income tax (PIT) is necessary to ensure compliance with the law. This article will provide you with detailed information on PIT for foreigners, including calculation, settlement, exemptions and reductions, as well as an introduction to the PIT settlement service of Tam Viet Company.

 

1. What is personal income tax for foreigners?

 

Definition of personal income tax for foreigners

Personal income tax (PIT) is a tax that employees must pay to the state based on their annual income. For foreigners, whether or not they have to pay PIT depends on their residency status in Vietnam.

Classification of foreigners by residence status

According to Vietnamese tax law, foreigners are classified into two groups:

1. Resident individual: A person who has been present in Vietnam for 183 days or more in a calendar year or has a permanent residence in Vietnam.

2. Non-resident individual: A person who is present in Vietnam for less than 183 days in a calendar year and does not have a permanent residence in Vietnam.

This classification directly affects the calculation and the personal income tax rate that foreigners must pay.

Example

• Mr. John, a foreign expert, was present in Vietnam for 200 days in 2023. Accordingly, Mr. John is considered a resident individual and must pay personal income tax on all income from Vietnamese and foreign sources.
• Ms. Sarah, a British journalist, came to Vietnam for work for 120 days in 2023. Ms. Sarah is considered a non-resident individual and must pay personal income tax only on income from Vietnamese sources.

 

2. How to calculate PIT for non-resident individuals

 

 

Taxable income for non-resident individuals

 

For non-resident individuals, only income from Vietnamese sources is subject to personal income tax. This income includes:

• Income from salaries and wages paid by organizations and individuals in Vietnam.
• Income from business in Vietnam.
• Income from capital transfer, real estate transfer in Vietnam.
• Income from intellectual property rights, industrial property rights in Vietnam.
• Other income originating in Vietnam.

 

How to calculate personal income tax for non-resident individuals

 

Personal income tax for non-resident individuals is calculated at the full tax rate, not applying the full tax schedule as for resident individuals. Specifically:

• For income from salaries and wages: Tax rate 20%.
• For other income: Tax rate from 0.1% to 25% depending on the type of income.

For example: Mr. David, an American expert, has a salary income in Vietnam of VND 100 million in 2023. As a non-resident individual, Mr. David must pay personal income tax on this income at a tax rate of 20%, equivalent to VND 20 million.

 

Amounts exempted from personal income tax

 

Non-resident individuals are also entitled to certain personal income tax exemptions, including:

• Income from interest on bank deposits.
• Income from compensation for site clearance.
• Income from life insurance.
• Allowances and benefits as prescribed by law.

 

Can I self-settle personal income tax?

 

Regulations on personal income tax settlement

 

According to the provisions of the Law on Personal Income Tax, all individuals (including Vietnamese and foreigners) are obliged to make annual personal income tax settlement. Personal income tax settlement is the determination of the amount of tax payable or refunded in the tax year.

 

Cases of personal income tax settlement

 

Individuals must settle personal income tax in the following cases:

• Having taxable income from many different sources.
• Having income exceeding the tax-free income level.
• Having income from salaries and wages but not having tax deducted at source.
• Having a request for a personal income tax refund.

How to self-settle personal income tax

 

Individuals can self-settle personal income tax by submitting the Personal Income Tax Settlement Declaration and related documents and records to the tax authority before March 30 of the year following the tax year. However, self-settle personal income tax is quite complicated and prone to errors, especially for foreigners who may have difficulty with language and understanding of Vietnamese tax law. Therefore, many people often choose to use tax settlement services of professional companies.

 

3. How is taxable income for foreigners calculated?

 

Taxable income from wages and salaries

 

For foreigners, taxable income from salaries and wages includes the following:

• Salary, wages and other amounts of a salary or wage nature.
• Remuneration, allowances, subsidies and other amounts of a salary nature.
• Housing, electricity, water, telephone and other amounts paid by the employer.

Taxable income from business and investment

 

The following incomes of foreigners are also subject to personal income tax:

• Income from business, production, construction, transportation, services in Vietnam.
• Income from capital transfer, real estate transfer in Vietnam.
• Income from intellectual property rights, industrial property rights in Vietnam.
• Income from investment funds, bonds, stocks in Vietnam.

 

Non-taxable income

 

Some income of foreigners is exempt from personal income tax, including:

• Income from interest on bank deposits.
• Income from compensation for site clearance.
• Income from life insurance.
• Subsidies and allowances as prescribed by law.

 

4. What are the requirements for personal income tax exemption for foreigners?

 

Conditions for personal income tax exemption for foreigners

 

To be exempted from personal income tax, foreigners must meet the following conditions:

1. Being an individual residing in Vietnam according to the provisions of the Law on Personal Income Tax.
2. Having taxable income from abroad that has been calculated and paid tax abroad.
3. Having confirmation from the foreign tax authority that tax has been paid.

 

Personal income tax exemption application

 

When requesting personal income tax exemption, foreigners need to prepare the following documents:

• Personal income tax finalization declaration.
• Original or notarized copy of confirmation from foreign tax authority on tax payment.
• Vietnamese translation of foreign tax payment confirmation (if any).
• Other relevant documents and certificates.

 

Cases of 50% reduction in personal income tax

 

If foreigners are not eligible for personal income tax exemption, they can enjoy a 50% reduction in personal income tax payable in Vietnam if they meet the following conditions:

• Being a resident of Vietnam.
• Having taxable income from abroad.
• That foreign country has a double taxation avoidance agreement with Vietnam.

 

5. Personal income tax settlement service of Tam Viet Tax includes

 

About Tam Viet Tax

 

Tam Viet Tax is a unit specializing in providing accounting, tax and consulting services for domestic and foreign businesses and individuals. With a team of experienced and highly specialized staff, Tam Viet always ensures to provide quality, fast and effective services.

 

Personal income tax settlement service for foreigners

 

Personal income tax settlement services for foreigners of Tam Viet Company include:

• Determining taxable income and calculating the amount of tax payable.
• Preparing and submitting the Personal Income Tax Settlement Declaration along with related documents and papers.
• Performing procedures for declaring, paying and settling taxes with tax authorities.
• Advising on tax regulations and policies related to foreigners.
• Representing clients in resolving tax-related issues.

 

Benefits of using Tam Viet's personal income tax settlement service

 

By using Tam Viet's personal income tax settlement service, customers will enjoy the following benefits:

• Save time and effort.
• Ensure compliance with tax laws.
• Minimize the risk of being fined for incorrect or late declaration.
• Get professional advice and support from a team of experienced experts.
• Fast, quality service and reasonable price.

6. Conclude

 

Understanding the regulations on personal income tax for foreigners is essential to ensure compliance with the law and avoid being fined for violations. However, the personal income tax settlement process is quite complicated and prone to errors, especially for foreigners who may have difficulty with language and understanding of Vietnamese tax laws. Therefore, many people often choose to use tax settlement services of professional companies such as Tam Viet Tax.

With a team of experienced experts, Tam Viet is committed to providing high-quality, fast and effective personal income tax settlement services for foreign customers. Customers will receive maximum support in complying with tax regulations, while minimizing the risk of being fined for violations and saving time and effort.

If you are a foreigner working in Vietnam and need support on personal income tax settlement, please contact Tam Viet Company today for the most dedicated advice and support.

We are confident with many years of experience helping dozens of Vietnamese and foreign businesses including Japan, Korea, Taiwan, China... to enjoy successful tax refunds in the shortest time. 100% of our customers are satisfied with the service of Thue Tam Viet and are willing to introduce it to other partners.

 

Hotline for business care consultation: 0914.383.998

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