The General Department of Taxation has clarified further the personal income tax (PIT) treatment on expenses for temporary residence cards and visas application for foreign workers paid by the company on behalf of employees compared to several previous guidance.
What this mean for employees in Vietnam:
- Where employers pay the expenses for applying and extending temporary residence cards and visas for foreign workers in order for them to be eligible to work at organisations in Vietnam and this is the responsibility of employers, these expenses are not included in the taxable income from salaries and wages of the employees.
- If the expense for temporary residence cards or visa applications is paid by the employers on behalf of the foreign workers are the employee’s benefits, these expenses shall be included in the taxable income from salaries and wages of the foreign employees.
- In cases where the visa application fee for employees working in organisations in Vietnam is to go on overseas business trips as required by the work is per diem in accordance with the organisation financial regulations or internal regulations. According to regulations as in Circular No. 111/2013/TT-BTC on August 15, 2013 issued by the General Department of Taxation, it shall not be included in PIT taxable income. The expenses in excess of the prescribed threshold shall be taken into taxable income for PIT calculation purpose.
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We’re happy to share our experiences and clarity with you on taxation of visa costs for assignees in Vietnam. If you have any concerns or need a more in-depth review on this topic, please do not hesitate to contact us.