Vietnam: Gross-ups, compulsory insurance contributions | KPMG | GLOBAL
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Vietnam: Gross-ups and compulsory insurance contributions, salaried employees

Vietnam: Gross-ups, compulsory insurance contributions

The tax authority has issued guidance concerning the treatment of compulsory insurance contributions when an employee receives salary on a net basis.


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Official Letter No. 2943/TCT-TNCN (4 July 2017) explains the gross-up formula when an employee receives salary on a net basis, and that the formula is to be applied as follows: 

  • For the period prior to 1 July 2013—compulsory insurance contributions are not to be deducted from net income before gross-up.
  • For the period from 1 July 2013 and later—compulsory insurance contributions are allowed to be deducted from net income before gross-up. 

KPMG observation

The official letter from the General Department of Taxation came to after a long consideration period and after consulting with the Ministry of Finance. Companies need to consider reviewing and adjusting their individual (personal) income tax declarations and payments in advance of any tax audit by the tax authorities. 


Read an August 2017 report [PDF 532 KB] prepared by the KPMG member firm in Vietnam

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