REPLY

1. Insurance Obligations

a) Social Insurance (SI) obligations

According to the provisions of Clause 2, Article 2 of Decree 143/2018/ND-CP on compulsory social insurance for foreign employees working in Vietnam, foreigners Not subject to compulsory social insurance if in case of internal transfer within the enterprise according to Decree 11/2016/ND-CP dated February 03, 02. Specifically, this applies to:

Managers, executives, experts, and technical workers of foreign enterprises that have established a commercial presence in Vietnam, temporarily transferred within the enterprise, and have been employed by the foreign enterprise for at least 12 months before coming to Vietnam.

b) Obligations regarding Health Insurance (HI)

Pursuant to Official Dispatch No. 288/BHXH-QLT dated February 18, 02 on health insurance payment for foreign employees sent by Ho Chi Minh City Social Insurance to employers in Ho Chi Minh City, Foreign workers working in Vietnam in the form of internal transfer within the enterprise as prescribed in Clause 1, Article 3, Decree No. 11/2016/ND-CP dated February 03, 02 of the Government are not subject to health insurance.

Time to reduce the process of participating in health insurance from February 01, 02 onwards.

2. Personal Income Tax (PIT) Obligations

According to the Law on Personal Income Tax 2007 (amended and supplemented by Law 26/2012/QH13) and Circular 111/2013/TT-BTC:

• Subjects subject to personal income tax: Resident individuals with taxable income arising within and outside the territory of Vietnam and non-resident individuals with taxable income arising within the territory of Vietnam.
• A resident individual is a person who meets one of the following conditions:
  • Being present in Vietnam for 183 days or more in a calendar year or for 12 consecutive months from the first day of presence in Vietnam;
  • Have a permanent residence in Vietnam, including a registered permanent residence or a rented house to live in Vietnam under a term rental contract.
• A non-resident individual is a person who does not satisfy the above conditions.

a) How to calculate personal income tax for non-resident individuals

Personal income tax payable = 20% × Taxable income

Determining taxable income from wages and salaries in Vietnam in case a non-resident individual works simultaneously in Vietnam and abroad but cannot separate the income generated in Vietnam, the following formula shall apply:

• For cases where foreign individuals are not present in Vietnam:
$$\text{total incomeborn in Vietnam}=\frac{\text{Number of working days forjobs in vietnam}}{\text{Total dayswork in year}}\times \text{Income from wages, salariesglobal public (before taxes)}+\text{Other taxable income (before tax)born in Vietnam}$$ <ｓｃｒｉｐｔ data-no-optimize="1">window.lazyLoadOptions=Object.assign({},{threshold:300},window.lazyLoadOptions||{});!function(t,e){"object"==typeof exports&&"undefined"!=typeof module?module.exports=e():"function"==typeof define&&define.amd?define(e):(t="undefined"!=typeof globalThis?globalThis:t||self).LazyLoad=e()}(this,function(){"use strict";function e(){return(e=Object.assign||function(t){for(var e=1;e

          In which: The total number of working days in a year is calculated according to the regime specified in the Labor Code of Vietnam.

• For cases of foreign individuals present in Vietnam:
$$\text{total incomeborn in Vietnam}=\frac{\text{Number of days presentin Vietnam}}{\text{365 days}}\times \text{Income from wages, salariesglobal public (before taxes)}+\text{Other taxable income (before tax)born in Vietnam}$$ <ｓｃｒｉｐｔ data-no-optimize="1">window.lazyLoadOptions=Object.assign({},{threshold:300},window.lazyLoadOptions||{});!function(t,e){"object"==typeof exports&&"undefined"!=typeof module?module.exports=e():"function"==typeof define&&define.amd?define(e):(t="undefined"!=typeof globalThis?globalThis:t||self).LazyLoad=e()}(this,function(){"use strict";function e(){return(e=Object.assign||function(t){for(var e=1;e

Note: Other taxable income (pre-tax income) arising in Vietnam mentioned above are other benefits in cash or non-cash that employees receive in addition to wages and salaries paid by or on behalf of employees by employers.

b) How to calculate personal income tax for resident individuals

Personal income tax payable = Tax rate × Taxable income

In which:

• Taxable income for personal income tax = Taxable income – Deductions;
• Taxable income for personal income = Total income – Tax-exempt income;
• Progressive tax rates include 07 different tax levels:

c) Procedures for declaring and settling personal income tax

If required to pay personal income tax in Vietnam, employees need to register for a personal tax code and submit tax declarations (directly or through a company in Vietnam if authorized) according to Decree 126/2020/ND-CP specifically as follows:

• For non-resident individuals:
  • For non-resident individuals receiving salary directly from a parent company abroad, that individual must directly ｄｅｃｌａｒｅ tax to the tax authority and make quarterly tax declarations.
  • Non-resident individuals do not have to make personal income tax finalization.
• For resident individuals receiving salary directly from the parent company abroad:

          Resident individuals receiving salaries directly from foreign parent companies must directly ｄｅｃｌａｒｅ taxes to tax authorities and make quarterly tax declarations and annual personal income tax finalizations. In which:

• • Employees must have evidence to prove or confirm the amount paid. Attached is a letter confirming income according to form No. 20/TXN-TNCN issued with Circular 156/2013/TT-BTC.
  • In fact, if the tax authority abroad does not issue a certificate of tax payment, the individual must take a photo of the tax deduction certificate or a copy of the bank document clearly showing the tax paid abroad. All these copies must be signed by the individual and the individual must be responsible for their authenticity.
• For resident individuals receiving salary directly from Subsidiaries in Vietnam:

          For resident individuals who receive salary directly from a Subsidiary Company in Vietnam, the Subsidiary Company in Vietnam is obliged to temporarily deduct tax, ｄｅｃｌａｒｅ tax monthly/quarterly and make personal income tax finalization for the employee if the employee is eligible to authorize personal income tax finalization.