In addition to the issues of labor contract, residence or non-resident and social insurance of the Head of Representative Office, Foreign Traders are also particularly interested in personal income tax issues of the Head of the representative office.
Accordingly, Apolat Legal provides the following comparison table for readers to examine for each specific case. The following table is prepared to distinguish between personal income tax of the Head of a representative office when he is a resident or a non-resident, with labor contract or without labor contract, a Vietnamese or a foreigner.
1. The below table is made based on the following assumptions
– Income is paid for working in Vietnam; and
– Staffs have only one income from RO/Foreign Trader only.
2. Resident means a person who satisfies one of the following conditions
– Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of their presence in Vietnam;
– Having a place of habitual residence in Vietnam, which is a registered place of permanent residence or a rented house for dwelling in Vietnam under a term rent contract.
3. Non-resident means a person who does not satisfy any of the conditions as specified above
| Cases | Taxable income | Tax rate | Withholding | Declaration |
Finalization |
|||||||
| Vietnamese | Resident | Labor
Contract |
Monetary or non-monetary benefits receiving from employer including, among others, salaries, wages, bonuses, allowances, housing fees, utility fees. | Partially progressive tariff | The organization paying incomes (however, as our experience, in case of receiving income directly from Foreign Trader, such staff shall pay tax himself). | The staff (in case of receiving salary directly from Foreign Trader) and RO (in case of receiving salary from RO) as the case may be.
|
RO in case of being authorized by staffs and subject to some certain conditions | |||||
| Non-labour Contract | Revenue from providing service or service fee (subject to authorities’ discretion)
|
1% of revenue or partially progressive tariff (as the case may be subject to kind of taxable income)
|
The organization paying incomes (withhold 10% of income) (however, as our experience, in case of receiving income directly from Foreign Trader, such staff shall pay tax himself). | The staffs or RO as the case may be
|
The staffs
|
|||||||
| Non-resident | Labor
Contract |
Monetary or non-monetary benefits receiving due to working in Vietnam (regardless the paying employer) including, among others, salaries, wages, bonuses, allowances, housing fees, utility fees | 20% of taxable incomes
|
The organization paying incomes (however, as our experience, in case of receiving income directly from Foreign Trader, such staff shall pay tax himself). | The staffs | RO in case of being authorized by staff and subject to some certain conditions
|
||||||
| Non-labour Contract | Revenue from providing service or service fee (subject to authorities’ discretion) | 5% of revenue or 20% of taxable incomes (as the case may be subject to kind of taxable income)
|
Same as above
|
Same as above | The staffs
|
|||||||
| Foreigner | Resident | Labor
Contract |
Same as corresponding cases of Vietnamese staffs | |||||||||
| Non-labour Contract | ||||||||||||
| Non-resident
|
Labor
Contract |
|||||||||||
Disclaimer:
This article is for general information only and is not a substitute for legal advice. Apolat Legal is a Vietnamese law firm with experience and capacity to advise on matters related to Employment. Please click here to learn more about our services and contact our lawyers in Vietnam for advice via email info@apolatlegal.com.
