In case the business signs a labor contract with an individual, the business shall comply with regulations on withholding personal income tax on income from salaries and wages and make tax finalization. And being authorized by an individual, regardless of whether the individual is the owner of a business household or not.

The Mana box Vietnam (in Hanoi) Co., Ltd signs a labor contract and pays income from salary and wages under the labor contract to individual A who is the owner of the business household paying tax according to the flat revenue.

Through the receiving and responding system to businesses’ recommendations, the business would like to ask, the business is responsible for withholding personal income tax of individual A according to the salary and wages and at the end of the year the individual can authorize the settlement if the company meets the conditions, is it correct?

In addition, personal income A from wages and salaries with company X does not need to apply for an invoice because this is not a service contract but is a labor contract, is it correct?

In case individual A receives a service fee from performing a service provision contract for Manabox Vietnam Co., Ltd. (not a labor contract), the company understands that the tax obligation in this case shall be implemented as follows: :

In case the individual A receives a service fee from performing a service provision contract for Manabox Vietnam Co., Ltd (not a labor contract), the Company understands that the tax obligation in this case shall be implemented as follows: :

- If the year's contract revenue is VND 100 million or less, the license fee, VAT and PIT shall not be paid. At that time, the two parties must make form 01/TNDN.

- If the year's flat revenue is over VND 100 million, the license fee, VAT and PIT must be paid according to regulations. At that time, in case individual A provides services to Manabox Vietnam Co., Ltd., he must apply for a separate invoice and pay the license fee, VAT, and PIT as prescribed and do not have to finalize PIT with this income.

Regarding this issue, the General Department of Taxation - Ministry of Finance has the following comments: Does the business understand the above issue correctly?

Regarding this issue, the General Department of Taxation - Ministry of Finance has the following comments:

In case Manabox Vietnam - Hanoi Co., Ltd (the business) signs a labor contract with an individual, the Company shall comply with regulations on withholding personal income tax for incomes from salaries and wages, and make personal income tax finalization as authorized by individuals according to regulations, regardless of whether the individual is the owner of the business household or not the owner of the business household.

In case the Company signs a service contract with an individual who meets the conditions to be a trader, such as: Having business registration in the same line of business or having tax registration in the form of household business in the same industry as the service contract, The Company does not deduct personal income tax, but individuals (business households) must issue invoices (if eligible to use invoices) or make a list of purchased goods and services without invoices. Form No. 01/TNDN (if not eligible to use invoices).

In case the Company signs a contract with another individual than the above case, the Company shall deduct according to regulations on salary and wages at the tax rate of 10% before paying to the individual.

It is recommended that the Company base itself on the actual contract signed with the individual and contact the tax authority which directly manages it for guidance in accordance with the above provisions.