On July 5, 2024, the General Department of Taxation issued Official Letter No. 2887/TCT-DNNCN 2024 concerning the personal income tax policy for foreign individuals.
Based on Clause 2, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2013, of the Ministry of Finance; Clause 2, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2013 (amended by Clause 4, Article 11 of Circular No. 92/2015/TT-BTC dated June 15, 2015) of the Ministry of Finance; Clause 2.5, Article 6 of Circular No. 78/2014/TT-BTC dated June 18, 2014 (amended by Clause 2, Article 3 of Circular No. 25/2018/TT-BTC dated March 16, 2018); Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015; Article 9 of the Personal Income Tax Law No. 04/2007/QH12 dated November 21, 2007; and Clause 3, Article 15 of the Agreement on Avoidance of Double Taxation and Prevention of Tax Evasion with respect to Taxes on Income between Vietnam and Korea dated May 20, 1994:
In cases where enterprises cover accommodation expenses (including transportation services for foreign employees from the airport to their accommodation and vice versa) for foreign employees upon their entry and stay in Vietnam, these expenses, in principle, if deductible when determining corporate income tax in accordance with the Corporate Income Tax Law and its guiding documents, are not included in the taxable personal income. If the accommodation expenses for foreign employees exceed the specified allowance, the excess amount must be included in the taxable personal income.
In cases where the taxpayer is eligible for tax exemption or reduction under the Agreement on Avoidance of Double Taxation, the tax authority shall base its determination on Article 15 of the Agreement on Avoidance of Double Taxation and Prevention of Tax Evasion with respect to Taxes on Income between Vietnam and Korea dated May 20, 1994, to determine the tax obligations according to the Agreement.
