Question 18: Taxable period for foreign workers

If the residents living in Vietnam for more than 183 days, the taxable period will be counted from January 1 to December 31, not depending on the date of entry and wages in Japan before coming to Vietnam also liable to pay tax. Under the current provisions, in case the number of days reside in Vietnam in the first working year from 183 days onwards (solar calendar), though the official day to accept the assignment is in the middle of the year, the worldwide income of the worker counted backwards from January 1st is subject to taxes. But the period from January 1st to before the time of taking assignment, the person wasn’t residing and certainly not working in Vietnam. The income earned in Japan during this period is also subject to taxes in Vietnam, the workers must pay taxes 2 times in both Japan and Vietnam, a burden to taxpayers. Also, in Japan there is no such provision in the tax law. Please consider this matter, and eliminate the income generated when working in a foreign country during the period from January 1 to before the time of taking assignment in Vietnam from personal incometax in Vietnam.

Tax Department

On 25/08/2014 the Ministry of Finance issued Circular 119 / TT-BTC on tax amending Article 1 of Circular 111/2013 / TT-BTC dated 15/8/2014 of the Ministry of Finance guiding the personal income tax with the following content: "Any individual who is a citizen of a country or territory that has entered into an agreement on double taxation and prevention of tax avoidance with Vietnam, and also a resident in Vietnam shall calculate personal income tax from the month that individual arrives at Vietnam (if the individual goes to Vietnam for the first time) to the month in which the labor contract expires and the individual leaves Vietnam without following procedures for consular certification to avoid double taxation according to the double taxation agreement between the two countries.