Experts working in Vietnam with part of their salary paid by the overseas parent — while the Vietnamese company “forgets” to declare that portion. Authorities call this offshore payroll, a classic back-tax item in FDI audits.
Is foreign-paid income taxable in Vietnam?
Yes. Under the Personal Income Tax Law 2025 (109/2025/QH15, in force since 1 July 2026), employment income arising in Vietnam (from working in Vietnam) is taxable in Vietnam — regardless of where it is paid. An expert working 100% in Vietnam with 50% of salary paid by the Singapore parent still faces Vietnamese tax on 100% of that income. The “paid abroad means no Vietnamese tax” argument is flatly wrong and signals evasion when discovered.
Who must withhold?
Income payers must withhold PIT. For the Vietnam-paid portion: the Vietnamese company withholds and files. For the parent-paid portion: the individual technically self-declares — but auditors routinely deem the Vietnamese company the real employer and require it to withhold and remit on the full amount. Most FDI companies are reassessed on this basis.
Must “net” salaries be grossed up? How is it detected?
Yes. “Net” salary deals (company bears the expert’s tax) must be grossed up to taxable income before computing tax — filing on the net figure understates. Detection runs through: reconciling payroll costs across CIT finalization, social insurance and PIT finalization; demanding secondment contracts and global payroll tables; and international tax information exchange. Amending secondment contracts to spell out salary structure and tax duties is the first remediation step.
Frequently Asked Questions
Are 'net' salary costs grossed up for CIT deduction?
Deductible salary costs for CIT must reflect grossed-up taxable income (including the company-borne tax). Booking costs on net salary understates deductible costs.
Expert works 2 months in Vietnam, paid abroad?
Still taxable in Vietnam on income for Vietnam working days (non-residents: 20% on Vietnam-sourced income).
What tax clauses belong in secondment contracts?
Salary structure (Vietnam-paid vs abroad-paid portions), who bears PIT, gross-up duties, and commitments to provide information for Vietnamese tax filing.
This article has been quality-reviewed by the FLAW AI Legal Council
