The Binh Dinh Provincial Tax Department has issued Official Letter No. 833/CTBDI-TTHT to provide guidance on the determination of taxable income for collaborator service contracts and allowances. The details are as follows:

by KMC Consulting Company Limited

1.On Personal Income Tax (PIT) Withholding for Collaborator Service Contracts:

  • In cases where the Company signs a service contract for collaborators and pays remuneration of VND 2,000,000 or more per payment:
  •  If the service contract for collaborators has a duration of 3 months or more, the Company shall withhold PIT according to the progressive tax rates stipulated in Point b.1, Clause 1, Article 25 of Circular No. 111.
  • If the service contract for collaborators has a duration of less than 3 months, the Company shall withhold PIT at a rate of 10% on each payment of VND 2,000,000 or more, or based on the recipient’s commitment. In cases where the recipient submits a commitment, the income-paying organization will not withhold tax (the individual making the commitment is responsible for its accuracy and will be subject to penalties for tax evasion as stipulated in the Law on Tax Administration) according to Point i, Clause 1, Article 25 of Circular No. 111.

2.On PIT for Allowances:

   2.1.On Allowances for Office Supplies, Business Trips, and Telephone:
  • If the Company pays allowances for office supplies, business trips for employees who actually go on business trips, and telephone allowances in accordance with the Company’s financial management regulations, and in compliance with Point đ.4, Clause 2, Article 2 of Circular No. 111/2014/TT-BTC and Article 4 of Circular No. 96/2015/TT-BTC, these allowances shall not be included in the employee’s taxable income.
   2.2.On Uniform Allowances:
  • If the Company provides uniform allowances to employees, any amount exceeding VND 5,000,000 per person per year must be included in the employee’s taxable income.

For more detailed information about this or related Tax Advisory, please don't hesitate to contact us.
Website: https://kmc.vn/
Hotline: +84 81 489 4789 or +84 91 988 9331
Email: info@kmc.vn