Is a Branch of an Export Processing Enterprise Established for Goods Trading Subject to VAT?

Short answer: Yes, withholding is required. Organizations and individuals paying income to resident individuals who have not signed a labor contract or have signed a labor contract of less than 03 months, with a total income payment of VND 2,000,000 or more per payment, must withhold PIT at a rate of 10% on the income before payment (Point i, Clause 1, Article 25 of Circular 111/2013/TT-BTC).

At what amount of occasional income must PIT be withheld?

Under Point i, Clause 1, Article 25 of Circular 111/2013/TT-BTC, organizations and individuals paying wages, remuneration, or other payments to resident individuals who have not signed a labor contract (as guided at Points c and d, Clause 2, Article 2 of this Circular) or have signed a labor contract of less than 03 months, with a total income payment of VND 2,000,000 or more per payment, must withhold tax at 10% on the income before payment to the individual.

In which cases may a commitment be made to temporarily defer withholding?

Where an individual has only income subject to withholding at the above rate but estimates that their total taxable income after family circumstance deductions is below the taxable threshold, the individual makes a commitment (using the form issued with the tax administration guidance documents) and sends it to the income-paying organization or individual, which uses it as the basis to temporarily not withhold PIT.

The individual making the commitment is responsible for its contents; if fraud is discovered, it will be handled under the Law on Tax Administration.

Applicable legal basis

• Circular 111/2013/TT-BTC guiding the Law on PIT: Point i, Clause 1, Article 25.

Notes when applying current legal regulations

This article belongs to the Corporate & M&A Knowledge group and is presented for reference, helping readers understand the legal issue at an overview level before preparing dossiers or conducting transactions.

Legal regulations may change according to time, locality, dossier type, and specific circumstances. Where it is necessary to determine exactly the applicable legal basis for your dossier, you should contact the lawyers of ANT Legal at 0966.475.966 for verification and advice before proceeding.

Common risks to note

• Applying legal documents that have been amended, supplemented, or replaced.
• Preparing insufficient dossiers, documents, or evidence.
• Misunderstanding conditions, procedures, time limits, or competent authorities.
• Signing, submitting dossiers, or conducting transactions without fully assessing legal risks.

How can ANT Legal assist?

ANT Legal assists in reviewing specific situations, checking dossiers, determining the applicable legal basis, advising on courses of action, and representing clients in working with individuals, organizations, or competent authorities when necessary.

For quick advice, you can contact a lawyer at 0966.475.966.

Related articles

• How is falsely declaring charter capital of a joint stock company to participate in bidding for high-value projects handled?
• May the owner of a single-member LLC operating food services establish a charity fund for their own company?
• May a member of a 2-member LLC donate their capital contribution to their brother-in-law?
• May a single-member LLC choose a rented house as its business address?
• Dossier for re-issuance of the Enterprise Registration Certificate of a single-member LLC