Guidelines on foreign contractor tax policy for foreign workers' wages paid on behalf of foreign companies.

On May 12, 2022, the Tax Department of Bac Ninh province issued Official Letter 1503/CTBNI-TTHT guiding the foreign contractor tax policy.

In case an overseas company signs a dispatch contract with a company in Vietnam on sending skilled workes to Vietnam to work. If the Vietnamese company directly signs a labor contract and is responsible for paying income to the foreign  worker, the amount paid by the foreign  company on behalf of the foreign worker’s salary will then be refunded by the Vietnamese company are not subject to the application of foreign contractor tax.

In case it is discovered that in addition to paying and receiving refund, the overseas company also receives other income from sending workers to Vietnam to work, the Vietnamese company is responsible for declaring and paying foreign contractor tax on the entire payment to the Company abroad and be sanctioned for violations according to regulations.