VietNamNet – Some changes are expected regarding PIT policy for foreign individuals not present in Vietnam but with earnings from business done in Vietnam.

The General Department of Taxation (GDT) is to issue a document to amend some provisions in the existing circular 81 guiding the implementation of personal income tax (PIT). There will be some changes to tax imposed on non-resident foreigners who have income from doing business in Vietnam, a source told VietNamNet.

GDT has proposed to clarify the status of such individuals, removing them from the list of subjects for PIT. ‘Non-residential’ refers to short-term stays in Vietnam, being less than 183 days.

According to the source, those individuals will be the subjects of the foreign contractors tax (FCT) stipulated in Circular 05/2005 dated January 11, 2005.

Currently, such people are subjects to both kinds of tax, causing an overlap in tax regulations. According to Circular 81, these subjects have to pay 25% of their earnings.

GDT is also planning to make some amendment regarding technical issues in a bid to help ease procedures for tax payers and ease work for tax bodies. Ten forms of tax declaration have been put forward for adjustment.

GDT is also considering allowing tax bodies at district levels to receive tax declaration letters from the tax payers and also tax refund dossiers. However, only tax bodies that have qualified staff will be allowed to do this, the source said.

At present, HCM City Tax Department has the highest ratio of PIT collection, amounting to 40% of the total PIT revenue. Hanoi follows with 18%, while Ba Ria – Vung Tau Province ranks third with 13%.

The new document is hoped to be made public soon as February 28 is the deadline for tax finalisation reporting.

Nguyet Ha