COMPLIANCE CHECKLIST FOR A NEWLY ESTABLISHED REPRESENTATIVE OFFICE (PART 4)

PIT declaration of employee

Have all employees of the RO declared their PIT to the tax authorities within 20 days of the following month (for monthly declaration) or within 30 days of the following quarter (for quarterly declaration) after the taxable income arises?[15]

Deduction for family circumstances

Has the RO’s employee properly declared his/her legitimate dependants for the deduction?[16]

Tax status

Has the RO’s foreign employee determined his/her tax status in Vietnam – a tax resident[17] or a tax non-resident?[18]

Income acquired outside Vietnam

Have the RO’s foreign employee, who is tax resident of Vietnam, declared and paid PIT on income acquired outside of Vietnam?[19]

Taxable income

Does the taxable income of the employee include salary, bonuses and other allowances provided by the RO?[20]

Net salary

If the RO’s employee receives a net salary, have the salary paperwork been properly grossed up for the PIT purpose in accordance with the official formula?

Rental

If the RO pays for the employee’s rental, does the RO ensure that the rental prudently paid in kind and calculated into the total taxable income for the PIT purposes is not more than 15% of the employee’s total taxable income (excluding rental amount)?[21]

Irregular income

Has the RO’s employee paid PIT on his/her regular and irregular income (such as income from doing business of real estate, industrial property transfer, transfer of technological secrets or lottery prize winnings)?[22

One-off relocation

Has the RO’s employee excluded his/her one-off relocation allowance to Vietnam or from Vietnam to abroad from the labour contract or collective labour agreement from his/her total taxable income?[23]

Two-way airfare ticket

Has the RO’s foreign employees or Vietnamese working abroad employees excluded his/her two-way airfare ticket for home leave (as stated in the labour contract) been excluded from his/her total taxable income?[24]

Meal allowances

Has the RO’s employee excluded his/her lunch or mid-shift meal allowance from his/her total taxable income? In the case where the meal allowance has exceeded the rate stipulated by the Ministry of Labour, War Invalids and Social Affairs, the amount in excess shall be subject to PIT.[25]

Travelling expenses

Has the RO’s employee properly excluded the travelling expenses paid by the RO to provide collective transport for employees to and from his/her personal residences to the workplace from his/her total taxable income? Should the transport services be rendered only for individuals, the travelling expenses shall be subject to the PIT.[26]

Overtime payment

Has the RO’s employee excluded overtime payments from his/her total taxable income?[27]

Social and health insurance payment

Has the RO’s local employee excluded from his/her total taxable income the payment of social and health insurance paid from his/her salary?[28]

Unemployment insurance payment

Has the RO’s local employee excluded from his/her total taxable income the payment of unemployment insurance paid from his/her salary?^{^[29]}

Training expenses

Has the RO’s employee excluded the training expenses paid by the RO from his/her total taxable income?[30]

Educational expenses

Has the RO’s expatriate employee excluded from his/her total taxable income the expenses for his/her children studying in Vietnam or expenses for children of the Vietnamese employee working abroad from kindergarten to high school?[31]

Currency of the income

Has the RO’s employee converted all of his/her tax payable incomes into VND for the purpose of PIT calculation?^{^[32]}

[15]Article 44.1 of Law on Tax Administration 2019

[16]Article 12 of Decree 65/2013/ND-CP

[17]Article 1.1 of Circular 111/2013/TT-BTC

[18]Article 1.2 of Circular 111/2013/TT-BTC. Of note, a foreigner is considered as Vietnamese tax non-resident in case he/she does not satisfy the condition to be a tax resident

[19]Article 18.2 of Circular 111/2013/TT-BTC

[20] Article 3.2 of Decree 65/2013, Article 2.2, 2.3 of Decree 12/2015 and Article 11 of Circular 92/2015/TT-BTC

[21] Article 2.2(dd) of Circular 111/2013/TT-BTC, and Article 11.2 of Circular 92/2015/TT-BTC

[22] Article 2 of Circular No. 111/2013 and Article 12.3 of Circular 92/2015/TT-BTC

[23] Article 2.2(dd) of Circular 111/2013 and Article 11.2, 11.3, 11.4 of Circular 92/2015/TT-BTC

[24] Article 2.2(g) of Circular 111/2013/TT-BTC

[25] Article 2.2(g) of Circular 111/2013/TT-BTC

[26] Article 11.4 of Circular 92/2015/TT-BTC

[27] Article 3.1(i) of Circular 111/2013/TT-BTC

[28] Article 11.3 of Circular 92/2015/TT-BTC

[29] Article 43 of Law on Employment, of note the RO’s employees are obliged to participate in unemployment insurance when working under labor contracts or working contracts as follow: (a) Labor contracts or working contracts of indefinite time; (b) Labor contracts or working contracts of definite time; (c) Seasonal or job-based working contracts with a term of between full 3 months and under 12 months.

[30] Article 2.2(dd.6) of Circular 111/2013/TT-BTC.

[31] Article 2.2(g.7) of Circular 111/2013/TT-BTC.

[32] Article 6 of Law on PIT