Vietnam’s General Department of Taxation has issued guidance (“OL 336”) on 2013 personal income tax (PIT) finalization with respect to tax return filings for 2013.1 OL 336 covers tax filing and administration, residency determination, tax treatment of benefits-in-kind, calculation of grossed-up income, and other matters relevant to completing and filing tax returns.
An understanding of what’s in OL 336 will help tax and global mobility professionals responsible for dealing with their international assignees’ Vietnamese 2013 tax filing requirements understand what has changed in terms of the various items noted in the introductory paragraph above. Understanding the rules and procedures as clarified by the guidance, should aid in the completion and timely filing of tax returns and in reducing errors and mitigating compliance-related penalties.
Below we highlight some of the provisions in OL 336.
The lease period for a leased “house” in Vietnam of 183 days or more in a tax year is used for determining tax resident status in relation to PIT finalization. The lease period of 90 days is applied for determining tax residency status before 1 July 2013.
Individuals that have already finalized their tax (submitted a final return) in order to leave Vietnam, but then return to work in Vietnam until the end of the same year, are required to re-finalize their tax (that is, file another PIT final return) on their worldwide income for the entire year. However, any tax paid outside of Vietnam on their income earned in the period they did not work in Vietnam can be assessed for a tax credit in Vietnam.
In general, there are several updates on 2013 PIT finalization guidance in comparison with that issued for 2012. Individuals and enterprises should take the above guidance into account and carefully review their 2013 PIT finalizations for appropriate implementation of the rules and related guidance.
1 Official Letter No. 336/TCT-TNCN (“OL 336”) dated 24 January 2014. For an electronic version of OL 336 (Công văn số 336/TCT-TNCN ngày 24/01/2014 v/v hướng dẫn quyết toán thuế TNCN năm 2013) in Vietnamese.
The information contained in this newsletter was submitted by the KPMG International member firm in Vietnam.
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