Taxes in Vietnam

You earned money in a foreign country.  You owe taxes in a foreign country.  Be happy those taxes paid here are are exempt from US taxes up to the rate you would have paid in the US.  Meaning you will get credit for them when you file taxes in the US and claim this foreign earned income.  You were planning to do that, right?

Would you recommend sending the money directly to the company I worked with? Even if there's the possibility that they have not been completely honest? I'm all for paying whats due but it's hard to trust a company that threatens to send people after you to collect the money in person.

Not from the USA so I'll have to look into that for my home country.

Thanks for the response.

I have some answers for you, but you should make sure you get the right information before sending any money.   To give you the standard taxation of non-residents in VN, the tax rate is a flat 20%, no deductions.  Here are the rate tables for non-residents:

The following tax rates apply to nonresident individuals.

Type of income Rate (%)

Income from employment 20
Income from capital investment 5
Income from royalties and franchising
(exceeding VND10 million) 5
Income from winnings or prizes
(exceeding VND10 million) 10
Income from capital transfers 0.1
Income from transfers of real property 2

In addition, your employer was required to withhold taxes and pay the government on either a monthly or quarterly basis.  Here is the law:

Organizations and individuals must withhold income tax from
income paid to resident and nonresident individuals with respect
to income from employment, capital investments, capital transfers
(including transfers of securities), royalties, franchising, and
winnings and prizes.
Declaration and payment of tax on employment income by income
payers must be made on a monthly basis by the 20th day of the
following month or on a quarterly basis by the 30th day of the following
quarter. The eligibility to declare tax on a monthly or quarterly
basis shall be determined in the first month in which tax is
withheld. It will remain unchanged throughout the year.

Thus, you need to confirm with your employer how much was withheld and paid to the government.  If they did not withhold enough, you pay the difference.  If they over withheld, you ask for difference back. 

Lastly, VN and the UK have a tax treaty so that might change the general answers above.

Granted, this is VN, so there may be a lot of uncertainties (e.g., your employer did not withhold any taxes or withheld and did not pay the government).  Hope you got pay stubs or some official document confirming your earnings and withholding, otherwise, it could get messy.  PM me if you want to discuss further.

I saw in another post that you got paid in cash only and no VN bank account set up for you by the company.  My educated guess, your employer never withheld taxes and never paid taxes or reported your income to the tax authority.  Now they are asking you to pay them the 20%, which means they will likely keep it for themselves.

If i were you, I would mandate they provide proof of tax withholding and payment to the tax authority (i.e., confirmation from the tax authority, not your employer).  If you owe tax, tell your employer you will file a VN tax return and submit payment directly to the tax authority.  Would love to hear how this turns out.

Hi

Thank you so much for the information and guidance, I've now messaged one of my former bosses with what you suggested. I will see how she responds.

Thanks again and stay tuned.

Here is some very good information about individual tax administration (Personal Income Tax "PIT") in VN, you need to read it carefully and PM if you have any questions.  Please note the following:

1. Do you have an VN individual tax code? If not, you cannot get a refund and you were suppose to get one while earning taxable income in VN.  Your employer should have mentioned this requirement.

2. You are required to file your tax registration to your employer.  Did you do this?

3. Your employer is required to submit your tax registration to the local tax office.  Did your employer do this?

4. As previously advised, your employer is required to withhold taxes from your pay and submit your taxes to the tax office.  Did your employer do this?

5. You are required to finalize your PIT when you terminate your VN employment BEFORE you leave the country.  Did you do this?  I am guessing not, but your employer should have helped you with this as well.

6. If you are entitled to a refund, you only get it if you have an individual tax code.

Good Luck


PIT administration

    Individual tax code: Any individual present in Vietnam who has taxable income must obtain an individual tax code. Those who have taxable employment income must submit the tax registration file to their employer; the employer will subsequently submit this to the local tax office. For individuals with taxable non-employment income, they must submit their tax registration file directly to the district tax office.
    PIT declaration and payment:
    For employment income, Employers must deduct and withhold employees' PIT and submit/ pay it to the tax authority, alongside the relevant social security contributions on monthly basis with the timeline no later than the 20th of following month or on a quarterly basis by the 30th day following the reporting quarter. The total income withheld must be finalized no later than 90 days after the end of the western calendar year.
    Expatriate employees are also required to carry out a PIT finalization on termination of their Vietnamese assignments before exiting Vietnam. Tax refunds due to excess tax payments are only available to those who have a tax code.

Here is the link 

https://www.grantthornton.com.vn/insigh … e-tax-pit/


fyi - I am a U.S. based Attorney and CPA and have been practicing both U.S. and International law for 25+ years.

MikeyPG94 wrote:

Hello All

I left my job in Vietnam for various reasons and my former employer seems adamant that I owe 20% taxes because I worked under 183 days.

From my research, there seems to be some truth to this. But I've been told from other experienced teachers not to pay it and I can't be the first foreigner that's worked less than 183 days so was wondering if anyone had faced a similar issue?

It's been hard to figure out if I genuinely owe this 20% tax or not, my main question is will there likely be any genuine consequences for not paying it?

The company I worked for lied about the hours and money I was earning to local authorities and another teacher who left early has them quoted as saying "we avoid paying taxes" but the managers seem adamant that I owe taxes to the Vietnamese government.

I'm currently out of the country but am keen to work or travel in Vietnam again one day but I'm worried that I'll face dire consequences if I return.

Any help or insight would be greatly appreciated.

First thing, no worry about any consequence.

It's true that you owe 20% tax since you are a non-resident employee. But the responsibility to deduct your tax and to pay your tax is belong to the employer. If they fail to do that, they must take responsibility in front of the tax authority. You can choose not to pay the employer if you don't feel like so.

its a trick, they offered you the job at a paid rate, which excluded the tax of which they would pay. They just did not tell you this or you would not have worked for such low pay. They will have to pay the tax it is there responsibility not yours.
Keep any email or information's regarding your agreed pay.
But at the end it was up to them to deducted from your pay. But had they done that then you would have left.

MikeyPG94 wrote:

Hello All

I'm quoting your post from another thread ("Ha Tinh") (moderated by ADMIN) to give a more complete picture of your situation:

MikeyPG94 wrote:

Well, firstly the company pays the least amount of cash compared to other companies in the area. Now cash is not my number 1 priority but it is a little disheartening knowing that for the same work people are getting paid more. The schedules and hours are all over the place and many of the contracts they have are in less than nice schools, such as Ischool. Be prepared to be feeling like your working all the time because the 30 hours are spread out throughout the week morning, afternoon and evening. These are all face to face teaching hours as well, I was lucky as I worked with younger ages but be prepared to do unpaid lesson planning if you have to work with older age groups. Now the company lies about the money and hours we do which personally made me question the legitimacy of it all, I was never set up with a Vietnamese bank account and had to send money to my UK bank through a very sketchy method as well. Hence I mention the tax thing, do I really owe tax if the company itself is lying about what I owe and only ever paid me cash in hand? Very confusing and just added to my worries whilst I was there. ***... sure seems like a nice dude but the entire time I was there I only saw him a few times, when you need help with something he says to just pull up your trousers and get on with it kind of attitude. There is no sense of support or structure from him and you'll mostly interact with his wife Hang, who is a lovely woman but a terrible people manager bless her. When I wanted feedback on whether I was progressing well as a teacher or not it was brief and well basically *** has no real idea on how you're actually doing. Since I left he has been threatening to send people after me among other things so I had to block him in the end. But essentially the guy is a fool. He got aggressive with someone he was trying to hire just because they decided not to take the job. The more I think about it the madder it is. Hang is lovely and I feel bad for her but she will willingly screw people over, adding on extra hours and then not paying, making people dance like monkeys on Christmas Eve to advertise the company, trying to make a girl who broke her collarbone go to work, among other things, but overall she will help you out a lot if you did decide to go.

All the teachers who had worked with other companies were amazed at how bad the company is run. One couple left after two months, there is another women there currently who is sticking it out but constantly talks about how things are better elsewhere. There is another woman whom *** decided to ditch after about a month or so but when I spoke to her she had years of experience and also said she had never known a company or schools like it. 

Perks: They do give you a moped, but be prepared for it to likely breakdown. Free housing is also nice but you have to share with other people in which your mileage will vary, mostly everyone just complains about work and the area, same with the other foreigners in town, people mostly just meet up to drink a lot, again it depends on you but for me, it quickly became quite dull. There are new people in town since I've left but who knows.

Personally, I liked the area, I would explore the countryside and seaside on my days off and the local people (those not associated with the schools) are absolutely lovely. The students and the teaching itself is fantastic, but these things are not unique to ***or Ha Tinh you can find that anywhere in the world really. Essentially I loved Vietnam and the people but everything else got me down.  Personally, I've seen far dirtier and polluted places and never found it to be an issue, the coastline, in particular, is grand but be aware that there is dirt and pollution.

Honestly, I could talk for hours but I will end it by saying this. Before I left for Vietnam I spoke to a guy who worked there who basically told me NOT TO GO. I had already invested time and money into it all so decided to stick with it. Please don't make the same mistake as me. There are better companies than *** of that I can guarantee. I currently only know of one girl who has stuck with the company beyond her initial contract everyone else leaves at the end or like me takes a prolonged trip to Cambodia and never looked back. Vietnam: YES ***n: No

I think you've gotten great advice from my attorney, @VanKhanh Ho and a forum member I trust, @vndreamer, plus good insights from others.

I'll only add that the six-month requirement appears to be part of a scam some schools are playing. At least it was happening recently in Đã Nẵng:

I'll guess your employer never filed for a work permit, right? Maybe they said they would pay for one at the end of six months employment? That's the scam in Đà Nẵng.

As one person implied, they took advantage of your willingness to be paid in cash, and likely deducted at least 20% from the amount you might have had coming, had you insisted on an employment contract with them paying for the work permit immediately upon hiring you.

Now they appear to be 'playing chicken' with you, well aware of all the fear buttons they can push to get you to cough up a kickback to them.

So, unless I'm totally off base, you are talking about illegal employment. Please don't be offended by my assessment. It probably ends up working in your favor here.

As my attorney has suggested, you can probably safely ignore them, because they are also guilty of having employed you illegally.

Still, it never hurts to have extra documentation.

Others feel free to chime in and correct me, but I'm thinking if you write to them (respectfully, even in a conciliatory manner) one more time and say that your LAWYER in Vietnam is advising you to pay them directly, as long as they provide formal legal documentation of all the hours you worked for them, you might very well never hear from them again.

Just an idea...

The fact that they lied about the hours and money you were earning to local authorities and they were quoted as saying "we avoid paying taxes" means that you have to pay nothing.

Thank you all for your comments and insight, it's greatly appreciated.

After reading them carefully and speaking more in-depth with @vndreamer it has become quite clear that my employers are quite shady indeed. I sent my employer one last message based on what vndreamer advised and they said pay up to them directly or not to contact them again.

So I've decided that I will just leave it at that and will likely never hear of this matter again. Thankfully its become clear that there will be no consequences if I return to Vietnam which was my main concern.

To anyone reading this in the future, this only became an issue because I left my job early, but it has exposed that the company was never doing things legitimately while I was there. It's my firm belief that many former teachers only stuck it out at this particular company because of threats from the management concerning the 20% tax and those who did leave early got screwed over money-wise. So my advice is to research these things thoroughly before accepting a job and whilst out there never let anyone take advantage of you.

MikeyPG94 wrote:

Thank you all for your comments and insight, it's greatly appreciated.

After reading them carefully and speaking more in-depth with @vndreamer it has become quite clear that my employers are quite shady indeed. I sent my employer one last message based on what vndreamer advised and they said pay up to them directly or not to contact them again.

So I've decided that I will just leave it at that and will likely never hear of this matter again. Thankfully its become clear that there will be no consequences if I return to Vietnam which was my main concern.

To anyone reading this in the future, this only became an issue because I left my job early, but it has exposed that the company was never doing things legitimately while I was there. It's my firm belief that many former teachers only stuck it out at this particular company because of threats from the management concerning the 20% tax and those who did leave early got screwed over money-wise. So my advice is to research these things thoroughly before accepting a job and whilst out there never let anyone take advantage of you.

In general, that's good advice.

Still, while you've told us a lot about the actions of the school, you haven't directly responded to questions directed at you, which are likely just as important (if not more so) for aspiring English teachers to consider:

1. Were you aware that your "employment" was illegal?

2. Did you have a legal employment contract?

3. Did your employer acquire a legal work permit in order to employ you?

If you answered 'no' to this, then the answer to #2 above is also 'no', since BOTH an employment contract AND a work permit are required for foreigners to work legally as English teachers in Vietnam (for more than a 30 days temporary hire, according to information I've read).

4. Did YOU insist on receiving your pay through a Vietnamese bank, so there would be a legal record established, or did you let your employer 'force' you to reluctantly accept cash?

As I said before, this is not a 'judgment' of you.

It's an attempt to accurately assess the situation for the sake of future readers of this thread who might be considering similar employment here in Vietnam.

Unfortunately, you are choosing to withhold information that would be helpful "To anyone reading this in the future..."

1: I wasn't 100% aware, but had suspicions. One of the factors in my leaving was that it at least felt partly illegal. I know many schools get raided and whatnot over issues like this, I think there was a deal in place with local police for all the English centres in Ha Tinh.

2: I'm not sure. I've received one of the contracts I signed although this was just something one of the managers whose not even from Vietnam had us sign and all the veteran teachers said it was just BS. I've since asked for the contracts were they lied about the money and hours among other things and only received a part of it, but they went dark when I asked for the full signed thing. So I doubt either of these "contracts" are legal employment.

Somewhat related they sent me 3 sheets of paper with all the teacher's names on it and the money they earnt that month (This is after I asked for proof of wages and tax withholding). Again not accurate to what we actually got and I'm pretty sure my signature is forged on 1 maybe 2 of these.

3: Since leaving I did get sent a scan of a work permit after I asked for it. Whether It's legit or not is beyond me.

4: It was get paid in cash or not get paid at all essentially. I never insisted but being new to this I just followed suit of the other teachers. In both contracts, it said a bank account would be set up for the employee. I guess both parties are equally to blame there.

Hope that helps.

.
Future readers will thank you for identifying the red flags

..at least, those with open minds...         
.

MikeyPG94 wrote:

3: Since leaving I did get sent a scan of a work permit after I asked for it. Whether It's legit or not is beyond me.

Although the school has to make the actual application, they would still need your diploma and TEFL certificate, certified and translated by authorities, as well as your native country police check.  Unless you knowingly supplied them with these documents, the work permit cannot be legal.

@vndreamer

Good Day,

I would like your advice.

I am an online teacher for a company based in Vietnam. I do not live in Vietnam, I live abroad.

I would please like advice on how the tax in Vietnam works for people who work online and do not live and never have been in Vietnam? I also work 7 days a week, all year round, between 5-8 hours per day on average.

Our company has pushed our tax significantly in the last 3 months and now it is becoming very difficult to pay bills. I would appreciate some guidance and advice.

Friendly Greetings,

@dani.smith

non residents should get taxed at a flat rate of 20℅.

Just Google for Vietnam tax guide.

@vndreamer
Good Day,

I would like your advice.
I am an online teacher for a company based in Vietnam. I do not live in Vietnam, I live abroad.
I would please like advice on how the tax in Vietnam works for people who work online and do not live and never have been in Vietnam? I also work 7 days a week, all year round, between 5-8 hours per day on average.
Our company has pushed our tax significantly in the last 3 months and now it is becoming very difficult to pay bills. I would appreciate some guidance and advice.

Friendly Greetings,
[email protected]

Depending on how you are contracted to be paid (your currency vs Việt Nam đồng) it possible you are dealing with currency exchange fluctuations.

If the value of the Việt Nam đồng has been decreasing against your home country currency, then you would receive less.