Non-Residents Required to Pay Income Tax

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Feb. 27 – Vietnam has released new details regarding the deferral of the new Personal Income Tax (PIT) implemented last January 1 involving non-residents.

The latest regulation says that non-residents would still be subject to PIT. A non-resident is defined as someone with income arising in the country who is (a) not residing in Vietnam; (b) will leave Vietnam before June 30, 2009; or (c) has lived in Viet Nam since January 1, 2009.

This includes non-residents that have not confirmed their departure from the country, has not registered for permanent residence, and has not entered into a house rental contract for a term of over 90 days, reports Vietnam News.

According to the Ministry of Finance taxes would also be deferred on income from business operations during the five-month period, as well as capital transfers, royalties and inheritances, although there would be no deferral of taxes on capital gains from real estate transactions, lottery winnings or cash gifts.

Income earned from capital transfers and inheritances would only be taxable beginning when taxpayers submit legal documentation of the capital transfer or inheritance to State agencies from January 1 to May 31.

The government had deferred payment of the new PIT to ease burden on employees and boost the economy. During the period, employers are not allowed to to withhold tax amounts from salaries but are still required to submit taxable incomes and tax totals to authorities.

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