How to determine residents and non-residents?
A reader with the email minhtuanx@xx sent an email to the Lao Dong Newspaper’s Legal Consulting Office to ask: I am the company’s accountant. As far as I know, the scope of personal income tax determination is not the same between residents and non-residents. How does the law regulate the identification of residents and non-residents?
Lawyer Nguyen Trang, YouMe Law Firm replied:
Clauses 1 and 2, Article 1 of Circular No. 111/2013/TT-BTC provide for personal income taxpayers as follows:
1. A resident is a person that meets one of the conditions below:
a) Being present in Vietnam for at least 183 days in a calendar year or 12 consecutive months from the first day of presence in Vietnam, in which the date of arrival and date of departure is considered one (01) day. The date of arrival and date of departure is based on the certification of the immigration agency on the passport (or laissez-passers) when the individual enters and leaves Vietnam. In case of entry and exit on the same day, it will be counted as one day of residence.
An individual’s presence in Vietnam defined in this Point is the presence of that individual in Vietnam’s territory.
b) Having a regular residence in Vietnam in one of the following two cases:
b.1) Having a regular residence as prescribed by the residence law:
b.1.1) For Vietnamese citizens: permanent residence is a place where an individual regularly, stably, and indefinitely lives and has been registered as a permanent residence following regulations of the law on residence.
b.1.2) For foreigners: permanent residence is the permanent residence stated in the permanent residence card or the temporary residence when applying for a temporary residence card issued by a competent agency affiliated with the Ministry of Public Security.
b.2) Having a rented house to live in Vietnam according to the provisions of the law on housing under a lease contract that has a term of at least 183 days in the tax year, specifically as follows:
b.2.1) Individuals who have no regular residence defined in Point b.1, Clause 1 of this Article will be considered a resident if he/she has a total house lease period of at least 183 days in the tax year under various lease contracts, even if he/she rents houses in different locations.
b.2.2) The rented houses can be hotels, guesthouses, motels, workplaces, offices, etc., whether they are rented by the person or their employer.
2. Non-resident individual means a person who fails to meet any of the conditions specified in Clause 1 of this Article. Thus, the identification of resident and non-resident is carried out following the provisions cited above.
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The category is made with the support of YouMe Law Firm.
By: Online NGUYEN TRANG (Labor Newspaper)/ Translator: Viet Nguyen-Bizic
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