PERSONAL INCOME TAX (PIT) POLICY FOR NON-RESIDENT INDIVIDUALS

(1) How to calculate personal income tax on business income

Personal income tax = Revenue from production and business activities x Tax rate

In which:

– Revenue is the total amount arising from the provision of goods and services, including expenses paid by the buyer of goods or services on behalf of a non-resident individual, which is non-refundable.

In case the contract agreement does not include personal income tax, the taxable revenue that must be converted is the entire amount that the non-resident individual receives in any form from the provision of goods or services in Vietnam, regardless of the location where business activities are conducted.

– Tax rates for incomes from business prescribed for each production and business field and line are as follows:

+ 1% for goods trading activities;

+ 5% for service business activities;

+ 2% for manufacturing, construction, transportation and other business activities.

 

(2) How to calculate personal income tax with income from wages and salaries

Personal income tax = Taxable income from wages and salaries x Tax rate of 20%.

In which: Taxable income from wages and salaries is the total amount of wages and salaries that a non-resident individual receives from performing work in Vietnam, regardless of where the income is paid.

 

(3) How to calculate personal income tax on capital investment income

Tax on income from capital investment of non-resident individuals is determined by the total amount of money received by non-resident individuals from capital investment in organizations and individuals in Vietnam multiplied by the tax rate of 5%.

 

(4) How to calculate personal income tax on income from capital transfer

Tax on income from capital transfer of non-resident individuals is determined by the total amount of money that non-resident individuals receive from the transfer of capital at a Vietnamese organization or individual multiplied by the tax rate of 0.1%, regardless of whether the transfer is made in Vietnam or abroad.

 

(5) How to calculate personal income tax from real estate transfer

Tax on income from the transfer of real estate in Vietnam of non-resident individuals is determined by the real estate transfer price multiplied by the tax rate of 2%.

 

(6) How to calculate personal income tax with income from copyright, franchises

– Tax on income from copyright of non-resident individuals is determined by the income in excess of 10 million VND according to each contract of transfer, licensing of the right to use intellectual property rights, technology transfer in Vietnam multiplied by the tax rate of 5%.

– Tax on income from franchising of non-resident individuals is determined by the income in excess of 10 million VND according to each franchise contract in Vietnam multiplied by the tax rate of 5%.

 

(7) How to calculate personal income tax with income from winning prizes, inheritances, gifts

– Tax on income from winning prizes, inheritances and gifts of non-resident individuals is determined by the taxable income specified in Clause 2 of this Article multiplied by the tax rate of 10%.

– Taxable income from winning prizes of non-resident individuals is the prize that exceeds 10 million VND for each time of winning in Vietnam; income from inheritance or gift is the value of inherited property or gift in excess of 10 million VND according to each income generation that non-resident individuals receive in Vietnam.

 

*** The time to determine taxable income is as follows: – The time to determine taxable income for income in case (1) is the time when the non-resident individual receives the income or the time the invoice is issued to sell goods or provide services. – The time to determine taxable income for income in cases (2), (3), (6), (7) is the time when organizations and individuals in Vietnam pay income to non-resident individuals or the time when non-resident individuals receive income from overseas organizations and individuals. – The time to determine taxable income for income in cases (4), (5) is the time when the transfer contract takes effect.