During the process of consulting and making temporary residence cards on behalf of LawFirm.Vn’s customers, we have received many questions related to the cost of making temporary residence cards with personal income tax included. Especially foreign customers working in Vietnam. What legal documents related to the cost of making a temporary residence card are subject to personal income tax?
1. Legal basis
To ensure accurate information is provided about whether the cost of making a temporary residence card is subject to personal income tax or not, this is the legal basis that LawFirm.Vn has relied on:
- Official dispatch 48921/CTHN-TTHT 48921/CTHN-TTHT Regarding personal income tax policy for payment of costs for temporary residence cards and visas for workers
- Law on Entry, Exit, Transit, and Residence of Foreigners in Vietnam 2019
- Circular No. 119/2014/TT-BTC amending and supplementing a number of articles of Circular No. 156/2013/TT – BTC dated November 6, 2013, Circular No. 111/2013/TT-BTC dated August 15 /2013, Circular No.219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated January 17/ 6/2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to reform and simplify procedures tax administration
- Official Dispatch No. 2014/TCT – DNNCN of the General Department of Taxation dated May 18, 2020
2. Do foreigners have to pay personal income tax?
Pursuant to Article 2 of Circular No. 119/2014/TT-BTC dated August 25, 2014 “Amending and supplementing paragraphs 1, 2, 3, 4, Article 1 of Circular No. 111/2013/TT-BTC dated 15/ 8/2013 of the Ministry of Finance guiding the implementation of the Law on Personal Income Tax, the Law amending and supplementing a number of articles of the Law on Personal Income Tax and Decree No. 65/2013/ND-CP of the Government regulating Details of a number of articles of the Law on Personal Income Tax and the Law amending and supplementing a number of articles of the Law on Personal Income Tax are as follows:
Article 1. Taxpayers
Taxpayers are resident and non-resident individuals as prescribed in Article 2 of the Law on Personal Income Tax, Article 2 of Decree No. 65/2013/ND-CP dated June 27, 2013 of the Government. details a number of articles of the Law on Personal Income Tax and the Law amending and supplementing a number of articles of the Law on Personal Income Tax (hereinafter referred to as Decree No. 65/2013/ND-CP), with income Taxable according to the provisions of Article 3 of the Law on Personal Income Tax and Article 3 of Decree No. 65/2013/ND-CP.
The scope of determining a taxpayer’s taxable income is as follows:
For resident individuals, taxable income is income generated within and outside the territory of Vietnam, regardless of where the income is paid;
For individuals who are citizens of countries or territories that have signed an Agreement with Vietnam on avoiding double taxation and preventing tax evasion for taxes on income and are resident individuals In Vietnam, personal income tax liability is calculated from the month of arrival in Vietnam in the case of an individual’s first presence in Vietnam to the month the labor contract ends and leaves Vietnam (calculated in full by month). You do not have to carry out consular confirmation procedures to avoid double tax collection according to the Double Taxation Avoidance Agreement between the two countries.
For non-resident individuals, taxable income is income arising in Vietnam, regardless of where the income is paid and received.
Based on that, we can determine that a foreigner with a Vietnamese temporary residence card has been determined to be a resident individual and must pay personal income tax when generating taxable income (Because the temporary residence card has a validity period). Minimum validity is 01 year, based on regulations on resident and non-resident individuals, this period of time is enough to qualify for classification as foreigners and residents).
And the scope of determining personal income taxable income of foreigners residing in Vietnam is all income arising within and outside the territory of Vietnam, regardless of where the income is paid.
Conclusion: Foreigners must pay personal income tax.
3. Is the cost of making a temporary residence card for foreigners subject to personal income tax?
Is the cost of making a temporary residence card subject to personal income tax? This is the question that LawFirm.Vn has received a lot from customers. Let LawFirm.Vn reveal it to you now!
Pursuant to Section 1 of Official Dispatch No. 2014/TCT – DNNCN of the General Department of Taxation dated May 18, 2020:
1. Costs for temporary residence cards and visas for foreign workers
Pursuant to Clause 2, Article 3 of the Law on Personal Income Tax No. 04/2007/QH12 dated November 21, 2007 of the National Assembly (amended by Clause 1, Article 1 of Law No. 26/2012/QH13 amending and supplementing Supplementing a number of articles of the Law on Personal Income Tax dated November 22, 2012 of the National Assembly);
Pursuant to Point dd, Clause 2, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance guiding the implementation of the Law on Personal Income Tax and the Law amending and supplementing a number of articles of the Law on Personal Income Tax and Decree No. 65/2013/ND-CP of the Government detailing a number of articles of the Law on Personal Income Tax and the Law amending and supplementing a number of articles of the Law on Income Tax individual;
Pursuant to Article 15, Article 16, Article 35 and Article 37 (amended and supplemented in Clause 15, Article 1 of Law No. 51/2019/QH14 dated November 25, 2019 of the National Assembly
Assembly) Law on Entry, Exit, Transit, and Residence of Foreigners in Vietnam No. 47/2014/QH13 dated June 16, 2014 of the National Assembly.
Pursuant to the above regulations and instructions:
- In case the costs of making and extending temporary residence cards and visas for foreign workers are paid by the employer so that foreign workers are eligible to work at organizations in Vietnam, responsibility of the employer, these expenses are not included in personal income taxable income from the salaries and wages of foreign workers.
- In cases where visa costs for employees working at organizations in Vietnam to travel abroad on business as required by the job are per diem expenses in accordance with the organization’s financial regulations or internal regulations. and according to the provisions of item dd.4, point dd, clause 2, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance, it is not included in personal income taxable income. of workers. The portion of per diem expenses exceeding the prescribed limit is included in the employee’s personal income taxable income.
- In case the costs of making temporary residence cards and visas for foreign workers paid by the company on behalf of the employee are benefits to the employee, these expenses are included in income taxable income. individuals from salaries and wages of foreign workers.
