When receiving income from salaries or wages paid by foreign sources, individuals must comply with tax filing and payment regulations in Vietnam to ensure full adherence to the law. Below are the key steps individuals should take on a quarterly basis.
Under Circular 80/2021/TT-BTC and Decree 126/2020/ND-CP, individuals receiving foreign income from salaries or wages are required to file tax directly with the tax authority. Specifically, the following individuals must file taxes:
These individuals need to declare their income quarterly to the tax authorities to calculate the tax obligations for the period.
According to Decree 126/2020/ND-CP, personal income tax for the above individuals will be filed quarterly if the organization or individual paying the income is required to file VAT quarterly and opts to file personal income tax quarterly. This means that rather than filing tax only at the end of the year, individuals can opt to file taxes quarterly, making the tax payment process more manageable and flexible.
As per Clause 8, Article 11 of Decree 126/2020/ND-CP, resident individuals with income from salaries or wages paid by foreign sources should file their tax documents with the tax authority where the individual performs work in Vietnam. If the individual’s work is not performed in Vietnam, they must file their tax documents with the tax authority where they reside.
Individuals must ensure to pay taxes on time to avoid penalties for late payment. Personal income tax on foreign income may be subject to different tax rates depending on bilateral tax treaties and current regulations in Vietnam. Timely filing and quarterly payment help individuals avoid risks related to tax violations.
When fulfilling tax obligations, individuals should retain documents related to their foreign income, such as employment contracts, remittance documents, and financial reports from the paying organizations (if applicable). These documents will help individuals substantiate their income sources and the amounts received when required by the tax authorities.
Individuals with foreign income from salaries or wages must file and pay taxes in accordance with Vietnamese tax laws. Filing taxes quarterly, opting for quarterly or annual tax returns, and making timely payments will help individuals fulfill their financial obligations legally. To avoid legal risks, individuals should stay updated on any changes in tax regulations and ensure they have all necessary documentation when filing taxes.
Ngân Hồ
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