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Vietnam - Special considerations for short-term assignments
Vietnam - considerations for short-term assignments
Taxation of international executives
Residency rules
Payroll considerations
Taxable income
Additional considerations
For the purposes of this publication, a short-term assignment is defined as an assignment that lasts for less than one year.
Residency rules
Are there special residency considerations for short-term assignments?
Assignees may consider the rule of non-resident in Vietnam. If an assignee stays in Vietnam less than 183 days or has a rented house in Vietnam or the likes i.e. hotels, guest houses, location of offices for 90 days or more and has a certificate of tax residence of a country other than Vietnam or does not have a permanent residential place in Vietnam during a tax year, only Vietnam-sourced income is taxed at a flat rate of 20 percent.
Payroll considerations
Are there special payroll considerations for short-term assignments?
If the assignees stay in Vietnam is less than six months, they may consider the following.
- If their home country and Vietnam have signed a DTA, their payroll may be not charged to the entity in Vietnam for the purposes of tax exemption. In addition, the income paying organization should not have a permanent establishment in Vietnam.
- In the case, there is no DTA, only Vietnam-source income may be added to payroll in Vietnam if necessary.
Taxable income
What income will be taxed during short-term assignments?
For assignees staying in Vietnam less than 183 days or having a rented house in Vietnam for 90 days or more with a certificate of tax residence of a country other than Vietnam or not having a permanent residential place in Vietnam during a tax year, only Vietnam-sourced income is subject to personal income tax in Vietnam.
If assignees do not fall into the position mentioned above, their worldwide income will be taxed.
Additional considerations
Are there any additional considerations that should be considered before initiating a short-term assignment in Vietnam?
Some tax saving tools can be used when entering into a short-term assignment in Vietnam such as payments of bonuses before or after the assignment to Vietnam, and so on. Employer-paid expenses and accommodation in Vietnam should be carefully considered as Vietnam tax saving tools.
© 2019 KPMG Limited, a Vietnamese limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
