Vietnam - Special considerations for short-term assignments
Vietnam - considerations for short-term assignments
Taxation of international executives
Residency rules
For the purposes of this publication, a short-term assignment is defined as an assignment that lasts for less than 1 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/jurisdiction 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 6 months, they may consider the following.
- If their home country/jurisdiction 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 183 days or more with a certificate of tax residence of a country/jurisdiction 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.
Disclaimer
All information contained in this publication is summarized by KPMG Tax and Advisory Limited, the Vietnamese member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on the Personal Income Tax Law of 2007 and subsequent amendments; the Decree 65/2013/ND-CP of 27 June 2013 and subsequent amendments; the Circular 111/2013/TT-BTC of 15 August 2013 and subsequent amendments; the Web site of the General Department of Taxation; the Vietnamese Social Security Law of 20 November 2014; the Vietnamese Health Insurance Law of 14 November 2008 and its subsequent amendments; the Vietnamese Labour Code of 18 June 2012; the Vietnamese Law on entry, exit, transit and residence of foreigners in Vietnam of 16 June 2014.
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