How do I file taxes on personal income earned from overseas?
EXPERTIS would like to answer the above question:
Individuals with both domestic and foreign income must declare and settle their taxes for all domestic and foreign income at the end of the year, except for certain cases that fall under the category of avoiding double taxation.
Explanation for the above answer
+ PhScope of determining taxable income
According to Article 1 of Circular 111/2013/TT-BTC, an individual is a resident who earns income both within and outside the territory of Vietnam, regardless of where the income is paid and received.
+ Figuretax declaration
According to Article 21, Clause 3, a.1 of Circular 92/2015/TT-BTC
2. Individuals residing in Vietnam who have income from salaries and wages must file their tax returns directly with the tax authorities.
a) Principles of tax filing
a.1) Individuals who file tax returns directly with the tax authorities are the following:
– Individuals residing in Vietnam who receive income from salaries and wages paid by international organizations, embassies, or consulates in Vietnam, but these organizations have not yet deducted taxes;
– Individuals residing abroad who receive income from salaries and wages paid by organizations or individuals from overseas.”
+ Tax return
Filing on a quarterly basisDeclaration form 02/KK – TNCN (according to Circular No. 92/2015/TT-BTC)
Final settlement declaration:
Tax return form 02/QTT-TNCN, appendix 02-1/BK-QTT-TNCN (according to Circular No. 92/2015/TT-BTC)
Copies of documents proving: the amount of tax withheld, the amount of tax provisionally paid during the year, and the amount of tax paid abroad.
If, according to foreign law, the foreign tax authority does not issue a certificate confirming the amount of tax paid, the taxpayer may submit a copy of the Tax Deduction Certificate (clearly stating which tax return was used) issued by the income-paying entity. Alternatively, a copy of the bank statement for the tax paid abroad (certified by the foreign taxpayer) may be submitted (Article 21, Clause 3, b.2 of Circular No. 92/2015/TT-BTC).
Principle of avoiding double taxation
In cases where a resident individual has income earned abroad and has calculated and paid personal income tax according to the regulations of that foreign country, they are entitled to deduct the amount of tax paid abroad. The deductible amount shall not exceed the amount of tax payable calculated according to the Vietnamese tax schedule, allocated to the portion of income earned abroad. The allocation ratio is determined by the ratio between the income earned abroad and the total taxable income.
(Article 26, Clause 2, e1 Circular 111/2013/TT-BTC)
When settling taxes at the end of the year, the amount of tax paid twice will be deducted.
For further information, please see the other services offered by EXPERTIS:
Accounting bookkeeping services
Financial statement auditing services
Auditing services for management purposes
