FOREIGN LABORER WITH DOUBLE TAXATION AVOIDANCE

Foreigners are subject to declaring tax finalization after completing of their jobs in Vietnam and before their departure from Vietnam.

Under to the Law 2007 on Personal Income Tax of Vietnam (amended and supplemented by Law 2014 on personal income tax), employees meet the conditions of being individual residents and have to submit the personal income tax with respect to their whole income arising within or outside Vietnam.

In that case, if the foreign experts of your company have other earnings arising overseas in Vietnam, such earnings must be taxable in accordance with the law on personal income tax of Vietnam.

According to Section 1, Official Letter No. 187/TCT-TNCN, dated January 15, 2013 guiding finalization of Law on personal income tax, the individual residents as foreigners are subject to declaring tax finalization after completion of their jobs in Vietnam and before existing Vietnam.

The foreign employees must fulfill their tax finalization from the date of their starting work in Vietnam till the date of their departure from Vietnam.

Vietnam signed the anti-double taxation agreements with:

If foreign experts of companies have already submitted the tax for income amounts arising overseas in accordance with the laws of the country whose they are citizens and the personal income tax also will be imposed on such income amounts in accordance with Vietnam’s laws.

The experts’ income tax payment in Vietnam will be deducted from their tax payments abroad provided that the deductible tax amount will not exceed the payable tax amount in Vietnam, which is calculated on their overseas arising income.