On March 16, 2022, Binh Duong Tax Department issued Official Letter No. 3814/CTBDU-TTHT, accordingly:
– If the Foreign individual is a trader, the individual is determined as a business individual, income from consulting service contract is taxable according to regulations applicable to contractors, including VAT and PIT on income from the business. Vietnamese Enterprise shall be responsible for declaring and paying tax on behalf in accordance with the Declaration Form No. 01/CNKD issued in Circular No. 40/2021/TT-BTC on June 1, 2021.
– If the Foreign individual is not a trader, the individual is not determined as a business individual, income from consulting service contract is a service provision that is only subject to PIT on income from salaries, wages. Vietnamese Enterprise shall be responsible for deducting PIT at the rate of 10% for resident individuals or 20% for non-resident individuals or applying Progressive Taxation if the individual is resident and has signed a labor contract.
A foreign individual who is a trader must have Enterprise Registration Certificates in accordance with the law of the foreign country or dossiers proving that the trader is recognized by foreign law. Foreign documents used in Vietnam must be consular legalized in accordance with Circular No. 01/2012/TT-BNG dated March 20, 2012, of the Ministry of Foreign Affairs guiding the Consular certification or Consular legalization.
