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Moving to Vietnam.Need advice about taxes.

Hey guys!

I'm moving to Vietnam this September,and need some advice.I checked all information in this forum and internet regarding taxes in Vietnam,but found very different info. I've got 2 job proposals. One is from HCMC and another from Hai Phong. And here is the jam: in HCMC they say that I have to pay 15% of incoming tax because my income will be more than 450USD. In Hai Phog thy say that I'll get just salary,but I'm not obliged to pay any taxes there. In both cases I'll obtain business visa for 3 months with extension in the future. Question: who is right and who is wrong? Shoul I pay any taxes or no? I'm concerned because I don't want face any legal issued upon my arrival. (p.s. my stay in Vietnam will be max 6 months)

Would appreciate any help and.

Daria.

I apologise, I can't answer your question about taxes, I can only suggest that Saigon is a much more interesting place to work than Hai Phong, and you are more likely to be happier living in Saigon.

I second that. Living in bigger city like HCMC will lead to better job opportunities assuming that you decided to like VN so much and wanted to stay there longer. Besides, what is there to do in Hai Phong? Any place further north seems like a dead zone to me. Unless you don't prefer the social scene.

Thank you for your answers!

Honestly,I heard just weird things about South and Hai Phong as well (dunno,maybe Hanoi isn't that bad) Also I'm kinda concerned about environment there and whether there exist any normal life for youngster like me. Besides,question about legal work/taxes there still bother me. (I mean if in HCMC I will need to pay tax because I will be staying there legally-then I am definitely more up to that). Anyway,still trying to sort out .

there are 2 things in life that are certain...death and taxes...I'd rather chose death.

hahah I bet! Well,will see how things are going with this in VN.

Hi

You have to pay tax wherever you work, Ho Chi Minh City or Hai Phong, and the employer is obligated to withhold your tax and submit to the tax authority before paying you.

I guess that Hai Phong employer wants to pay you Net salary. Means that the amount they offer you is after income tax. While Ho Chi Minh City employer wants to pay you Gross salary. That is just how they calculate your salary, not mean that you are not obligated to pay tax.

One more concern is no one want to apply a Work Permit for you? I guess that if you just work here short time they rather bear the risk than go through procedures.

By the way, jazzy851 brought me here to answer your question :) Thank you jazzy851 :)

Hi, I have some legal background in Vietnam, so that I would answer your questions as follows:

I suppose your job offers shall be presented in Labour Contract Form and its term is less than 03 months.

1. About PIT (Personal Income Tax)  in Vietnam:
As you will not stay in VN more than 183 days, you are non-resident tax payer in view of VN's PIT Law.
According to PIT Law, your employers shall withhold PIT before paying you salary. This requirement disregard where your employers are (HCMC or Haiphong).

About tax rate: it is 20% over your gross income, not 15%.
About who bears that tax, it is depend on your labour contract gross salary or net salary.
As foreigner, I don't think you have to contribute for Social/Medical/Unemployment Insurance.

About Double Tax Avoidance Treaty, it is a minor issue if the value of your labour contract is small). This issue is complex and depends on your nationality and employment status in your home country.

2. Work permit (WP):
As you did not provide the nature of your job, I cannot determine whether you are exempted form work permit or not even your labour contract is for 03 months or less. Only one exemption  for WP that I can find in Labour Code as when you entry VN less than 03 months to offer services or so.

You need to check with your employer about work permit issue. If both of you sign a Consulting Service Contract instead of Labour Contract, WP problem may be solved. However, tax obligation shall be calculated differently and more complicated. In this case, as a service contractor, you have to pay Value Added Tax (2-5% of contract value) and PIT (at 5% of contract value). But, you have to do a lot of tax paper work and I don't thank you can do by yourself.

It seems that my opinions shall raise more questions from you, but as not a tax attorney, my comments are just for reference.

Thank you so much for your answers and above mentioned information! I am very grateful:)

The nature of my job is teaching (not surprisingly at all))  Now if consider that I will pay taxes in HCMC I think I will need a second job there. So if anyone will have any options-let me know.Thanks:)

Totally agree with  trantong
What I understood from your post is that both employers (possibly language centers) are not willing to obtain a Work Permit for you. They just offer a business visa which does not allow you to teach legally. If caught, they will be in big trouble and you too! Of course many foreigners working temporarily without a WP. Here is the loophole:

CAN I WORK IN VIETNAM WITHOUT A WORK PERMIT?

Yes, You can. If you are in one of the following cases:
+ Working duration is less than 3 months. This is the loophole of 3 months duration which they want to renew and shows in their contract that you are just started!
+ Members of a limited company which include more than 1 member.
+ Owner of one member limited company in Vietnam.
+ Members of BOD at a joint stock company.
+ Doing service sales activities for a foreign company in Vietnam.
+ Foreign lawyer with a law practice license issued by the Ministry of justice.

+ Working duration is less than 3 months. This is the loophole of 3 months duration which they want to renew and shows in their contract that you are just started!

I suppose to think everyone use this option. Ans as far as I will stay around 4 months in VN I'm not gonna be  an exception.Just one important thing: I'm coming as a part of international internship which I think doesn't make any sense because there's no special visa or smth like that for interns there. That's why I guess the same 3 months,taxes and other stuff work in this case too. Just I can't get this: if working without work permit is illegal in the country why then employer levy tax from employee if  work is illegal anyway?

Do you think these employers will remit tax in government?  :)
Tax evasion is everywhere. Why should Vietnam be an exception?
They just try to cut this money from you. To get foreigner teacher they should offer more than other centers!

daria_i :

Just I can't get this: if working without work permit is illegal in the country why then employer levy tax from employee if  work is illegal anyway?

I understand the system,but from another hand I don't Because I've never heard anything similar. If employer doesn't hire employee legally they together meet halfway and decide that for both sides it is beneficial to organize  work in this way,so employee get better salary and employer doesn't pay any tax. This case I can understand. But not when they tell that I have to pay taxes because my job is legal when in fact its just bullshit.

Daria,
I've been teaching in Vietnam for the previous 12 years.  It has and is 'illegal' to teach without a work permit.  Many schools allow for such to happen and end up paying the local police millions to keep quite.  They also, wait until they hear of a 'raid' on the school and inform you to stay home for a day or two. 
I've taught in Hai Phong and Hanoi in the past...no permit, and only one with a contract years back when I first started in Vietnam.  Taught for 7 years in HCMC 3 years from school to school due to no permits and contracts...then I finally got smart and went to universities and local business on my own.  Received contracts, work permits, and temp residence cards as well.  Spent the last 4 years in HCMC in District 12 at the Anna Building and FPT IT University...then left to return to DaNang where I am currently. 
It is illegal to teach at a school without a permit.  The permit can be obtained within 2 to 3 weeks and they do not cost much either...Last year the price for a work permit was only 400,000 vnd posted on the Immigration wall.  I don't know where they get the totals of 10 to 15 million to obtain one...
I don't teach unless they obtain a permit for me.  But, I currently have two letters from the Ministry of Education and the Labor Department to teach out of my residence...no permit required according to Labor.  As to the taxes, the last I read was generally 10 to 25 percent between 10 to 15 million.  I have had a Vietnamese tax ID number for years...that should also be obtained.  It is the law that the school obtain the work permit and the proper visa for you if they are going to hire you and give you a contract.  I've heard that from both Immigration in HCMC and here in DaNang.
You can work without a contract, work permit but if caught and if they want...you can be removed from Vietnam and your visa will be revoked...and not able to return to Vietnam.  I've had one from the United States that has been removed and one from the UK; both in HCMC.  The school was closed down for a few weeks and the other ended up having to pay a large sum to the local police...
I would advise HCMC over Hai Phong...I believe there would be more support for you and the surroundings would be a little easier to handle...
Find out if the school in HCMC will give you a 'letter and visa upon arrival' assuming you will arrive at the airport.  Also, find out about the contract...
Hope this gives you a hint of what to expect...
Regards,
Anthony

Anthony64 :

The permit can be obtained within 2 to 3 weeks and they do not cost much either...Last year the price for a work permit was only 400,000 vnd posted on the Immigration wall.  I don't know where they get the totals of 10 to 15 million to obtain one...

True, but 400,000 is the official price for the permit itself.   That is the fee paid directly to the government.  The 10 million figure may be for a third party, perhaps a lawyer, to do the work, get the translations, and pay the coffee money which helps to get it done in 2-3 weeks instead of months.   In other words a package deal for a fair bit of run around time and connection.  Also, your permit that you see is bilingual but the application form itself is completely in Vietnamese, perhaps to ensure local employment.  That said 10-15 may be a little high.  In 2013, I paid 4 million but it was for a young lady who had a corporate day job and did part time work at home.  Since then my employer changed policy and now pays for work permits (as they should.)

Anthony64 :

I don't teach unless they obtain a permit for me.

Wise choice but not really a practical demand for people who only intend to stay a short time like the OP.

THIGV - very true...but the cost to translate is very little...cost me about 200,000 VND; another time more paper...500,000 VND. 
I've gone to the 'committee' building and have had numerous pages translated, Driver License from the US; Divorce papers, Birth Certs...ect. for next to nothing...(red stamp and all).

Granted, for a 6 month stay...do what you feel you can afford or get away with...I'm an American who lives here...I abide by their rules...in the best manner that I can...I enjoy my life over here and do not desire to be removed due to the lack of paperwork.  Nor, for the inability and stupidity of corporate owners and small businessmen/woman that only want the wealth...I'm the commodity...not them!
Best of luck

I wonder what would be the tax situation of a retired Person who enters the country with a 1-year Business visa but he will live in the country from a small pension (375 Euros/month), some dividends (aprox. USD 120 /month) and using mainly his savings to cover for a decent living. Your comments are very much appreciated...

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