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In accordance with the Ministry of Finance’s Circular No. 111/2013/TT-BTC, dated August 15, 2013, directing the implementation of the Law on Personal Income Tax (PIT):

+ At Point c, Clause 2, Article 2 guiding the PIT taxable incomes from salaries and wages:

“c) Remuneration received in the form of: commissions for sales agents, brokerage commissions; money to participate in scientific and technical research projects; money to participate in projects and schemes; royalties in accordance with the law on royalties; money to participate in teaching activities; money for participation in cultural, artistic, physical training and sports performances; advertising service fees; other service fees, other remuneration.”

+ At Item b.1 Clause 1 Article 25 guiding on tax deduction for income from salary and wages:

“b) Income from salary, wages

1) For a resident individual who signs a labor contract of three (03) months or more, the organization or individual paying income shall deduct tax according to the Partially Progressive Tariff, even if the individual signs a contracts of three (03) months or more at many locations.”

+ At point i, Clause 1, Article 25, guidance on tax deduction for some other cases:

“i) Tax deduction for some other cases

Organizations and individuals that pay wages, remunerations and other payments to resident individuals do not sign labor contracts (under the guidance at Points c, d, Clause 2, Article 2 of this Circular) or sign contracts of less than three (03) months with a total income of two million (2,000,000) VND/time or more must deduct the tax at the rate of 10% of the income before paying to individuals.

If an individual only earns income that is subject to tax withholding at the aforementioned rate, but the estimated amount of their total taxable income after accounting for their family circumstances is insufficient to pay tax, they must fill out a commitment form and send it to the income-paying organization as a temporary justification for not deducting PIT.

Based on the commitment of the income recipients, the income paying organization does not deduct tax for those cases. Yet the income-paying organization still has to gather the list of people and their income who have not yet qualified for tax deductions (in the form provided with the guidance document on tax administration) and submit it to the tax authorities at the conclusion of the tax year. The people who make commitments must be accountable for them. If fraud is discovered, it will be dealt with in accordance with the Law on Tax Administration.

Individuals making commitments under the guidance at this point must register for tax and have a tax code at the time of commitment.”

Based on the above provisions, in case the Company pay brokerage commission expenses to individuals and employees in the Company, then this income is actually salary income, wages, the Company deduct tax according to the partially progressive tax schedule for resident individuals who sign labor contracts of three (03) months or more. In case the resident individuals do not sign a labor contract or sign a labor contract for less than three (03) months with a total income of two million (2,000,000) VND/time or more, the Company must deduct tax at the rate of 10% of income before paying to individuals.