Official Letter No. 79916/CT-THTT dated August 31st, 2020 issued by Hanoi City Tax Department about Guidance on declaring FCT for foreign business individuals.
In case Company A hires Ms. X (foreign individual) to execute the project (graphic design) under the contract, Ms. X has registered business in accordance with the foreign law or documents to prove that she is a trader recognized by foreign law that shall be defined as a business individual. Incomes of Ms. X from the service contract is subject to FCT.
In case a foreign business individual is not satisfied with the conditions to declare directly in Vietnam, the Company has responsibility to withhold, declare and pay VAT, PIT for the foreign business individual.
- As for VAT: tax rate on income by 5%
- As for PIT:
- For foreign business individuals who are residents in Vietnam: the tax rate on income by 2%
- For foreign business individuals who are non-residents in Vietnam: the tax rate on income by 5%.
Please kindly find detail in the attached file.