1. Procedures for Crediting PIT Paid Abroad Against Tax Payable in Vietnam:

Residents of Vietnam who have paid tax in a country that has signed a DTA with Vietnam provided the tax paid complies with the laws of the foreign country and the DTA, are eligible to offset the tax paid (or deemed paid) abroad against the tax payable in Vietnam. 

(i) Taxpayers must submit an application requesting the deduction of tax paid (or deemed paid) abroad from the tax payable in Vietnam to their direct tax management authority.

(ii) The tax authorities will review the submitted application and decide on the deduction by the relevant DTA and the guidelines outlined in this Circular. This process will be completed within 10 working days from the date of receiving a complete application. This timeline excludes the time required for supplementary documentation or clarification.

2. Required Documentation:

1. The application form No. 02/HTQT in Appendix I hereof which shall contain information about the transactions that are relevant to the deducted tax.

2. Other documents according to the deduction method. To be specific:

2.1 Direct Deduction: The tax paid in the foreign country shall be directly deducted from the tax payable in Vietnam under the Double Taxation Agreement

2.1.1 Copies of the foreign tax form certified by the taxpayer;

2.1.2 Copies of overseas tax payment documents certified by the taxpayer;

2.1.3 Original certification of tax payment issued by the foreign tax authority.

2.2 In case of presumptive tax deduction: In case the taxpayer, under the foreign country’s law, is eligible for exemption or reduction of tax as a special treatment, the tax that was supposed to be paid in the foreign country may be deducted from the tax payable in Vietnam under the Double Taxation Agreement.

2.2.1 Copies of foreign tax form certified by the taxpayer;

2.2.2 Copies of the business registration certificate or legal documents confirming the overseas business operation practice certified by the taxpayer;

2..2.3 A confirmation letter issued by foreign competent authorities of the exempted or reduced tax and confirmation procedures the request for deduction of presumptive tax is conformable with the Double Taxation Agreement and the law of relevant Member States.

2.3 Indirect deduction: The taxpayer has paid the CIT on the income before it is distributed to the taxpayer in the foreign country. It may be deducted from the tax payable in Vietnam under the Double Taxation Agreement.

2.3.1 Legal documents proving the relationship and capital contribution proportion of the applicant;

2.3.2 Copies foreign tax form of the company to which the capital is contributed and that distributes dividends (the copies must be certified by the taxpayer);

2.3.3 Copies of the declaration of tax deducted at source on distributed share premium (the copies must be certified by the taxpayer);

2.3.4 Confirmation of issued by the foreign tax authority of the distributed share premium and the CIT paid by the company before dividend distribution.

3. The authorization letter is for when the taxpayer authorizes the legal representative to follow procedures for applying the Double Taxation Agreement.

If you have any questions regarding personal income tax, please contact TPM through our website or via hotline (+84) 28 3505 1800 for prompt assistance.

Quyen Nguyen