The tax authority has issued guidance concerning the treatment of compulsory insurance contributions when an employee receives salary on a net basis.
Official Letter No. 2943/TCT-TNCN (4 July 2017) explains the gross-up formula when an employee receives salary on a net basis, and that the formula is to be applied as follows:
The official letter from the General Department of Taxation came to after a long consideration period and after consulting with the Ministry of Finance. Companies need to consider reviewing and adjusting their individual (personal) income tax declarations and payments in advance of any tax audit by the tax authorities.
Read an August 2017 report [PDF 532 KB] prepared by the KPMG member firm in Vietnam
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