On June 12, 2023, the Hanoi Tax Department issued Official Letter No. 40818/CTHN-TTHT, according to which:
In case a foreign expert does not satisfy the conditions to be a resident individual in Vietnam as prescribed in Clause 1, Article 1 of Circular 111/2013/TT-BTC, they shall be determined as a non-resident individual and the scope of determination of PIT in Vietnam is income arising in Vietnam regardless of the place of income payment and receipt as prescribed in Article 2 of Circular 119/2014/TT-BTC. If the income that the individual is paid in Japan is not related to the individual work performed in Vietnam, this income shall not be included in the income from salary, salary subject to PIT in Vietnam.
In case a foreign expert meets the conditions to be a resident individual as prescribed in Clause 1, Article 1 of Circular 111/2013/TT-BTC of the Ministry of Finance, the scope of determination of taxable income is income arising within and outside the territory of Vietnam, regardless of the place of income payment as guided in Article 2 of Circular 119/2014/TT-BTC. For income received from abroad, individuals declare and pay PIT directly to Vietnamese tax authorities as prescribed in Clause 3, Article 19 of Circular 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
In case the Company pays on behalf of the employees, the expenses shall be included in the deductible expenses when determining the taxable income if the conditions specified in Clause 1 Article 4 are satisfied and are not included in the non-deductible expenses specified in Clause 2, Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance; Clause 2, Article 3 of Circular No. 25/2018/TT- BTC dated March 16, 2018 of the Ministry of Finance and related amendments and supplements (if any).
