Under the provisions of Circular 111/2013/TT-BTC, organizations and individuals who pay wages, remuneration and other payments to resident individuals must withhold personal income tax (PIT) at the rate of 10% on income before making salary payments in the following cases:

1. Resident individuals who do not sign labor contracts with an income of VND 2,000,000/payment or more fall into one of the following cases:

– Remuneration received as commissions for goods sale agents, brokerage commissions; payments for participation in scientific and technical research; payments for participation in projects, schemes; royalties under the law on royalties; payments for participation in teaching activities; payments for participation in cultural performance, arts, sports; payments for advertising services…, and other service fees, other remuneration.

– Money received from participating in professional associations, business associations, boards of directors, enterprise control boards, project management units, management councils, business councils, and other organizations.

2. Resident individuals who sign a contract of fewer than 03 months and have an income of VND 2,000,000/payment or more.

* In case, the individuals having only income are the subjects of tax withholding according to the above-mentioned rate but estimated that their total taxable income after deducting family circumstances does not have to pay tax, they should make a commitment to send the income-paying organization as a temporary basis not to withhold personal income tax.

Based on the commitments of individuals receiving income, the income-paying organizations will not withhold PIT. At the tax year-end, the income-paying organizations must still make a list of the income of the individuals whose income is lower than the income subject to withholding tax to submit to the tax office. Individuals making commitments must be responsible for their commitments. In case of detecting fraud, that individual will be sanctioned according to the provisions of the Law on Tax Administration.

Individuals who make the commitment must complete the tax registration with the tax office to be granted tax identification numbers at the time of committing.