On 14 December 2018, the Ho Chi Minh City Tax Department issued Official Letter No.13276/CT-TTHT to provide guidance on Corporate Income Tax (CIT) deduction.
The Official Letter states that salaries paid to expatriates assigned (under an assignment letter) by a Japanese parent company to work in Vietnam for business activities of the company in Vietnam will be deductible for CIT purposes, if the following conditions are met:
- the assignment letter fully presents the content of a labor contract as an agreement between the employee and the employer in terms of the paid employment, working conditions, rights and obligations of each party in employment relations, etc.
- the expatriates are defined as legal workers in accordance with Labor Code and have work permits
- the expatriates’ remuneration package is indicated in the assignment letter.
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