PERSONAL INCOME TAX FOR EXPATRIATES IN VIETNAM

Présentation au sujet: "PERSONAL INCOME TAX FOR EXPATRIATES IN VIETNAM"— Transcription de la présentation:

1 PERSONAL INCOME TAX FOR EXPATRIATES IN VIETNAM
December

2 CONTENT PIT obligation Survival guide 1. Basis of assessment
Residency status Source of income Tax assessment period 2. Tax calculation Employment income Non-employment income PIT obligation Introduction Vous êtes un étranger et voulez s’installer au Vietnam. Avant 01/01/2009, aucun inspecteur des impôts ne venait vous chercher sur le paiement de l’IR au Vietnam. Depuis, les choses ont changé. Vous devez donc être au courant quelle implication a l’imposition au Vietnam s’applique pour vous. Dans la suite de la conférence nous présenterons les situations concernant le paiement de l’IR… La question est très sensible… Si vous vous sentez perdu, n’hésitez pas à nous contacter pour mieux comprendre. 3. PIT registration, declaration and finalization Income from Vietnamese payers Income from overseas 4. Double Taxation Agreement (“DTA”) application Tax exemption Credit of tax paid Survival guide

3 01 01 Basis of assessment Introduction
Vous êtes un étranger et voulez s’installer au Vietnam. Avant 01/01/2009, aucun inspecteur des impôts ne venait vous chercher sur le paiement de l’IR au Vietnam. Depuis, les choses ont changé. Vous devez donc être au courant quelle implication a l’imposition au Vietnam s’applique pour vous. Dans la suite de la conférence nous présenterons les situations concernant le paiement de l’IR… La question est très sensible… Si vous vous sentez perdu, n’hésitez pas à nous contacter pour mieux comprendre. Basis of assessment

4 1. Basis of assessment Residents Non-residents Conditions
Being present in Vietnam for 183 days or more in a tax year; or Having a regular residential location in Vietnam Taxable income Worldwide income Exemption Impossible – Tax credit instead Conditions Not falling into the conditions of resident taxpayers Taxable income Vietnam-sourced income Exemption Possible Residents Non-residents

5 Determination of tax residency
Resident tax payer, meets one of the following criteria: Present in Vietnam for 183 days or more in a tax year (i.e. calendar year or 12 consecutive months from the date of 1st date of arrival to Vietnam); the date of arrival and date of departure are considered 2 days or Having a regular residential location in Vietnam in one of the following cases: Having registered place in the permanent residence card or temporary residence card; or Having a lease in Vietnam with term of 183 days or more within the tax year. (even in case of many lease contracts) – In practice, some cases depend on tax authorities opinion (Will not apply if individuals can prove being tax-resident of another country) Non-resident tax payer: does not meet the above conditions.

6 Worldwide income vs. Vietnam-sourced income
Worldwide income: incomes earned within or outside Vietnam’s territory, regardless of locations or payment and receipt Vietnam-sourced income: incomes earned within Vietnam’s territory, regardless of the location of payment and receipt  Not necessarily income paid in Vietnam

7 Tax assessment period (1)
1/5/2016 (date of entry) 31/12/2016 31/12/2017 First tax year Second tax year (calendar year) Present in Vietnam for more than 183 days Resident vs. Non-resident Finalisation from May to December 2016 Resident Finalisation from Jan to December 2017

8 Tax assessment period (2)
1/5/2016 (date of entry) 31/12/2016 30/04/2017 First assessment Second assessment (12 consecutive months) Present for less than 183 days Resident vs. Non-resident Resident Finalisation from May 2016 to April 2017

9 Tax assessment period (3)
1/5/2016 (date of entry) 31/12/2016 30/04/2017 (12 months) 31/12/2017 First tax year Second tax year Resident Resident Overlapping period Finalisation for 12 consecutive months From 01/5/2016 to 30/04/2017 Finalisation from Jan to Dec 2017, then less the tax paid of overlapping period

10 02 01 Tax calculation Introduction
Vous êtes un étranger et voulez s’installer au Vietnam. Avant 01/01/2009, aucun inspecteur des impôts ne venait vous chercher sur le paiement de l’IR au Vietnam. Depuis, les choses ont changé. Vous devez donc être au courant quelle implication a l’imposition au Vietnam s’applique pour vous. Dans la suite de la conférence nous présenterons les situations concernant le paiement de l’IR… La question est très sensible… Si vous vous sentez perdu, n’hésitez pas à nous contacter pour mieux comprendre. Tax calculation

11 Taxable income Taxable Income
Income in the form of salaries, wages, remuneration Bonus Allowances Housing benefit (capped) Other benefits in-cash or in-kind Non-taxable Income Relocation allowance (to VN) School fee Air tickets to home country Non-compulsory insurance Car rental for commuting Uniform/Telephone/Business trip allowances Lunch allowance Overtime premium Incentives: Individuals working in economic zones Individuals working in high-tech IT sectors (to be further guided)

12 Taxable Income - Housing
Housing benefit (include of housing utilities - e.g. water, electric, etc.) is taxable but not exceeding 15% of total taxable income excluding housing benefit itself Example: 1) Salary: $5,000 + Housing allowance (cash): $1,000  Total taxable income = $5,000 + $1,000 = $6,000 2) Salary: $5,000 + Housing benefit (company paid to landlord): $1,000  Taxable housing benefit = MIN ($1,000 OR 15% of $5,000) = $750  Total taxable income = $5,000 + $750 = $5,750

13 Non-Taxable Income Non-taxable incomes:
Business trip allowances, telephone allowances, transportation from home to work place which is in accordance with the company policy Uniform allowances in kind and in cash (Uniform allowance in cash is capped at VND / year) Meal allowances (cap at VND /year) Salary or wages for nightshifts and overtime working (amount exceeding base salary, not all overtime payment) One-off relocation allowances for expatriate coming to Vietnam for working Air-ticket for home leave for expatriate (once a year) – NOT FOR FAMILY Schooling fee (kindergarten to high school level) for children

14 Non-Taxable Income Non-taxable incomes (cont.)
Severance allowance, termination allowance paid in accordance with laws Allowances paid by Social Insurance Fund Regional, toxic allowance Benefit in-kind provided on a collective basic – cannot identify specific beneficiaries (membership fees, recreation fees …) Non-compulsory insurance (the kind of insurance with no accumulated premium, like medical insurance) provided by the employer. Money for employees and their family’s marriage or death Dividend distributed to the individual owner of a private company or one member limited liability company which has already been subject to CIT.

15 Calculation PIT liability Residents Non-residents
Compulsory insurance contributions Charity and humanitarian contributions Family deduction Personal: VND9m/month; Dependents: VND3.6m/dependent/month. Taxable Income Taxable Income Deduction Assessible Income PIT liability Progressive tax rates 20% flat rate

16 Approximately (in USD)
Tax rates Residents - Progressive Tax Rate Band Taxable income/year (in millions VND) Approximately (in USD) Taxable income/month Tax rate (%) 1 Up to 60 2,666.67 Up to 5 222.22 5 2 Over 60 and up to 120 2, ,333.33 Over 5 and up to 10 10 3 Over 120 and up to 216 5, ,600.00 Over 10 and up to 18 15 4 Over 216 and up to 384 9, ,066.67 Over 18 and up to 32 ,422.22 20 Over 384 and up to 624 17, ,733.33 Over 32 and up to 52 1, ,311.11 25 6 Over 624 and up to 960 27, ,666.67 Over 52 and up to 80 2, ,555.56 30 7 Over 960 42, Over 80 3, 35 *EXCHANGE RATE: US$ 1.00 = VND 22,500

17 Other Non-Employment Incomes
Income Category Residents Non-residents 1 Business income 0.5% - 5% of revenue (depending on type of business income) 2 Gain on capital transfer 20% 0.1% on sales proceeds 3 Gain on securities transfer 0.1% of sales proceeds 4 Gain on real estate transfer 2% of sales proceeds 5 Income from prize-winning/heritance/gifts 10% on portion exceeding VND10 mil 6 Income from royalty/franchising 5% on portion exceeding VND10 mil 7 Interest/Dividend 5%

18 Tax registration, declaration and finalization
01 03 Introduction Vous êtes un étranger et voulez s’installer au Vietnam. Avant 01/01/2009, aucun inspecteur des impôts ne venait vous chercher sur le paiement de l’IR au Vietnam. Depuis, les choses ont changé. Vous devez donc être au courant quelle implication a l’imposition au Vietnam s’applique pour vous. Dans la suite de la conférence nous présenterons les situations concernant le paiement de l’IR… La question est très sensible… Si vous vous sentez perdu, n’hésitez pas à nous contacter pour mieux comprendre. Tax registration, declaration and finalization

19 Income from VNese payers
REGISTRATION, DECLARATION AND FINALIZATION Registration Employers’ responsibility Declaration Monthly/quarterly Finalization Only required for residents Taxpayers’ responsibility; however can authorize employers to finalize on behalf (if eligible) Registration Taxpayers’ responsibility Declaration Quarterly Finalization Only required for residents Income from VNese payers Income from overseas

20 04 01 DTA Application Introduction
Vous êtes un étranger et voulez s’installer au Vietnam. Avant 01/01/2009, aucun inspecteur des impôts ne venait vous chercher sur le paiement de l’IR au Vietnam. Depuis, les choses ont changé. Vous devez donc être au courant quelle implication a l’imposition au Vietnam s’applique pour vous. Dans la suite de la conférence nous présenterons les situations concernant le paiement de l’IR… La question est très sensible… Si vous vous sentez perdu, n’hésitez pas à nous contacter pour mieux comprendre. DTA Application

21 TAX EXEMPTION FOR NON-RESIDENTS TAX CREDIT FOR RESIDENTS
DTA Application Tax exemption Tax resident in another DTA country Present for period(s) not exceeding 183 days during the tax year Paid by, or on behalf of, a non-resident employer Remuneration not borne by a permanent establishment/fixed base which the employer has in Vietnam Application Notification to tax authority is required Declaration Still required TAX EXEMPTION FOR NON-RESIDENTS TAX CREDIT FOR RESIDENTS Tax paid overseas for income derived from overseas shall be credited against tax payable in Vietnam Subject to certain documents (certificate of tax payment overseas)

22 05 01 Survival Guide Introduction
Vous êtes un étranger et voulez s’installer au Vietnam. Avant 01/01/2009, aucun inspecteur des impôts ne venait vous chercher sur le paiement de l’IR au Vietnam. Depuis, les choses ont changé. Vous devez donc être au courant quelle implication a l’imposition au Vietnam s’applique pour vous. Dans la suite de la conférence nous présenterons les situations concernant le paiement de l’IR… La question est très sensible… Si vous vous sentez perdu, n’hésitez pas à nous contacter pour mieux comprendre. Survival Guide

23 Survival guide Worldwide income includes all your revenue received in and outside Vietnam Income under consideration may include non-cash benefits, such as insurance, visa/work permit/resident card fee. Some are non-taxable (subject to certain conditions). House rental/School fee/Air-ticket home leave arranged under the company (contract, invoice & payment) may benefit from special tax treatments Exemption under DTA (if eligible) is not an automatic process For residency status, the tax assessment period may be 12 consecutive month period, not necessarily a calendar year Severance pay may be eligible at the end of the assignment (tax free). If entering into labour contracts in Vietnam: Health Insurance is compulsory; Social Insurance is optional (from 2018) for expats but lack of detailed guidance Finalization upon exiting Vietnam must be done within 45-day timeline (required for residents). ODA/i-NGO experts are entitled to special tax treatments in Vietnam.

24 Q & A