Job Discussion Forums

[Vesuve]

.............................

[Mr Wind-up Bird]

If he's already worked & paid tax for 2 years in Vietnam they shouldn't be taxing him at 25% - it only applies to your first 6 months working here, regardless of whether he's taken a break or not.

That said, no idea why he signed a contract without first asking about taxation! You should always establish these things first. The more teachers refuse to sign such contracts, the better conditions will get.

[spycatcher reincarnated]

Hmm... This is an interesting one.

I don't have the laws at my fingertips, but this is what PWC says in an overview of the law.

"Liability to personal income tax non resident foreigners

Foreigners who spend, in aggregate, less than 183 days (in keeping with international practice, the arrival and departure days count as one day) in a consecutive 12 month period following the first date of arrival, or in subsequent calendar years, are considered as not tax residents in Vietnam. Non residents are subject to PIT at a flat tax rate of 25% on their Vietnamese sourced income in the tax year. However, this will need to be also considered in light of the provisions of ant Double Taxation Agreement that might apply.

Prior to 1 July 2004, foreigners who spent less than 30 days per year in Vietnam were not subject to PIT. However, this exemption was removed from 1 July 2004."

I read this as saying that the first 183 days days of your stay in Vietnam, regardless of how these 183 days are split up are at 25%, then afterwards, normal tax rates apply. If my interpretation of the law is correct I am in agreement with Mr Wind-Up Bird.

Vietnames labor laws are a mess and government departments often don't follow them, but tax laws are pretty well thought out and implemented well, in companies that bother paying PIT.

I previously wrote:

25% of total earnings is correct for the first 183 days of you being in Vietnam. Employers have difficulty explaining to the tax man that the date you arrived in Vietnam is not the date you started working for them so they normally deduct/pay the 25% from the day you start and continue doing so for 183 days.

I still believe this as being correct as most companies are clueless about any laws and the tax department just walks all over them.

I would suggest going to the old schools you worked for and asking for proof that tax was paid on your behalf (in my opinion not many of the schools have been paying PIT for long so this may be hard to get). Whether you get this or not go to your present employer and explain that you think they are wrong about the tax situation.

This is an interesting one that I will try and dig further in to.

[spycatcher reincarnated]

I misread the first couple of sentences of Vesuve's email. I thought there had been a long Vietnam hiatus, but rereading it this is not so.

If he hasn't been out of the country for long then it is clear that he should be classified as a resident and thus be paying normal tax rates and not the 25% fixed rate.

Suggest he should give copies of his passport proving that he has been in Vietnam for sometime and IMHO with this info credible employers would agree to withold tax calculated at the residents' tax rate.

If his previous employers had been taxing witholding tax as a resident then I would suggest this should add extra weight to his arguement.

Summary: Seems like a slam dunk if he is willing to persevere!

[seanw250]

the fact that some ppl sign a contract without looking at it is laughable. if u did have a glance u wld have done what i did, which was just work there without any contract at all. there were so many negative points in their contract that it wouldnt have been nearly impossible to rectify it.
The tax they said they were going to impose was just one of these points, also the fact that they stated that if u fell out with the school they had the power to deportation. *Warning, Warning*
But having said this, VATC is a great chain that looks after you more than most and always pay on time. However, the contract should be avoidable at all costs.

[Snaff]