Vietnam Tax authorities are strictly enforcing tax deadlines and require that PIT declarations are filed for each month in the previous year. Under Decree 125, penalties for non-compliance can range from VND 2 million US$87) to VND 25 million (US$1,092) depending on the severity and delay.
Foreign-invested enterprises (FIEs) have to conduct PIT finalization on behalf of their employees at the beginning of the year for taxable incomes arising from the previous year.
If an employee has more than one source of income and wishes to conduct tax finalization on their own, FIEs can issue a certificate of deduction at the request of the employee. If an expatriate’s labor contract in Vietnam expires before the end of a calendar year, they should conduct tax finalization before their departure.
Important note: For employees who have had more than one employer during 2021 (for example due to a job change), the individual must submit the PIT finalization themselves and request the following documents from the previous employer:
- Annual income confirmation letter; and
- Personal income tax deduction letter
The above documents will also be required from the current employer for submission.
The taxpayer pays PIT to the state treasury in one of two ways: cash or bank transfer. The taxpayer can pay cash directly to the state treasury to receive the voucher from state officials. Otherwise, they can transfer money to a tax office bank account at the state treasury. The deadline for tax payment is the same as tax finalization, meaning no later than 90 days from the end of the calendar year.