Foreigners earning incomes from providing services in Vietnam, what are their tax liabilities? Income earned by foreigners from rendering services in Vietnam is taxed in Vietnam regardless of their residence status. However, the tax implications are different depending on various factors that are specified in this article to help the foreigners to comply with the tax regulations in Vietnam as well as mitigate the risks of additional tax, penalties and interests on late tax payment. Regulation on residence status in Vietnam According to the current tax regulation, an individual is regarded as a Vietnamese tax resident if: Being present in Vietnam for a period of 183 days or more within one western calendar year or 12 consecutive months from the date of first arrival in Vietnam; or Having a registered place of “permanent residence” in Vietnam; or Having a rented house (including hotels, guesthouses, motels, offices) with a lease term of 183 days or more in a tax year. In … [Read more...] about Foreigners earning incomes from providing services in Vietnam, what are their tax liabilities?
Foreign earned income tax
Many local enterprises are concerned with paying higher corporate income tax according to regulations on the deductibility of loan interest under Decree 20, in effect since May 1, 2017. Large enterprises such as EVN, Vinacomin, Vicem, Lilama and some private enterprises have sent a request to the Ministry of Finance (MoF) to change the regulation on deductibility of loan interest, reported vneconomy.vn. In a letter sent to the MoF, EVN said re-lending activities with its members are implemented in accordance with Government regulations and market rules. Limiting expenses for loan interest according to deductibility would make investment activities more difficult for EVN and its members, especially power generation companies, to develop power projects. Higher demand for electricity in the coming months is expected to lead to an increase in EVN’s investment in new projects. However, EVN’s members do not have enough capital to meet investment demand, so they need to use … [Read more...] about Local corporations pay higher corporate income tax
HCMC taxman slaps huge fines on social network tax evaderThe Saigon Times Daily A Facebook logo is shown on a laptop. The HCMC Tax Department has slapped huge fines on social network tax evader - PHOTO: REUTERS HCMC - The HCMC Tax Department has slapped a fine of VND1.1 billion, in addition to VND3 billion in taxes owed, on an individual who did not pay income tax on earnings of over VND41 billion received from Facebook, Google and YouTube for the last two years, Nguyen Nam Binh, deputy director of the department, told Nguoi Lao Dong newspaper on August 1. This marks the first time a person in Vietnam receiving payments from foreign companies has had to pay such a heavy fine and back taxes. The individual, whose name and background information was not revealed, works as a game designer. The tax evader has pledged to pay the back taxes and fine in full. Binh also revealed that another person with temporary residence in HCMC had earned VND20-30 billion from Google, … [Read more...] about HCMC taxman slaps huge fines on social network tax evader
A helpful starting point to identify where tax obligations fall after a transfer With the increasing number of mergers and acquisitions (M&A), transfer of contributed capital and securities is becoming more common and is widely used by both domestic and foreign investors. Complying with the regulations and having a tax efficient approach is one of the key concerns of most shareholders who would like to invest or divest from a Vietnamese company. In general, share transfer in Vietnam includes the sale of capital contributed in a limited liability company (LLC) and securities of a joint stock company (JSC), and in certain circumstances, the taxes imposed on each transaction are different. Tax liability of the sellers Corporate sellers/transferors For local corporate sellers, any gain derived from the transfer of capital/securities in another Vietnamese entity is regarded as ‘other income’ and is accordingly subject to corporate income tax (CIT) at the current … [Read more...] about Tax implications of selling equity or shares in Vietnamese entities
According to the report of the Committee for National Defense and Security about the draft Law on network security, which was introduced in the meeting of the National Assembly on April 4, until now Google and Facebook have not had any official representative in Vietnam yet. As a result, regarding their online advertising activities, tax authorities can only collect tax from revenues earned by their Vietnamese partners / advertising agencies or direct service buyers which are based in Vietnam. Preliminary statistics show that in 2016, on behalf of Google, YouTube, and Facebook, domestic companies paid a tax amount of about VND46.86billion (approx. $2.05million), consisting of VND25.28billion ($1.1million) of value added tax and VND21.58billion ($946,138) of corporate income tax. In the first 9 months of 2017, on behalf of those companies, domestic companies also paid a tax amount of VND73.2billion ($3.2million), including VND39.08billion ($1.71million) value added tax and … [Read more...] about Tax payment of Google & Facebook in Vietnam considered not sufficient