1. The issue: how is an intra-group transfer different from a local hire?
Experts seconded by a group to its Vietnamese subsidiary usually keep their employment contract with the parent, are paid partly or wholly from abroad, and are covered by a tax equalization policy. This cash-flow structure confuses many employers: is salary paid from overseas for work performed in Vietnam taxable in Vietnam, and who must withhold?
2. Legal basis
- Law 109/2025/QH15 (effective 01/7/2026; salary provisions for resident individuals apply from the 2026 tax year) — employment income sourced in Vietnam is taxable in Vietnam regardless of where it is paid; residents use the progressive scale, non-residents pay 20% on Vietnam-source income.
- Decree 253/2026/ND-CP — withholding rules; tax borne by the payer on the individual’s behalf must be grossed up into taxable income.
- Double tax treaties between Vietnam and the expert’s residence state — the employment-income article allocates taxing rights for short assignments.
3. The source principle: work location decides
Vietnamese PIT follows where the work is performed, not where the money is wired. An expert working at a plant in Vietnam but paid into an overseas account still has Vietnam-source income and must file in Vietnam. Split payroll does not by itself reduce the liability — the Vietnam-work portion must be fully declared in Vietnam.
4. Who withholds when the parent pays?
If the Vietnamese subsidiary bears the cost of the expert’s salary (directly or via a management/service fee recharged by the parent), the subsidiary is the income-related organization and withholds and files as for its own employees. If the parent pays everything and the subsidiary bears no cost, the expert self-files and pays Vietnamese tax directly each period. Companies should fix this mechanism in the secondment letter and cost-bearing agreement from day one — it is the first item tax inspectors examine.
5. Treaties and the 183-day threshold
Under treaty employment articles, if the expert is present in Vietnam for no more than 183 days in the relevant 12-month period, the salary is paid by an employer not resident in Vietnam, and the cost is not borne by a Vietnamese permanent establishment/subsidiary, the income is taxable only in the residence state. The “cost not borne in Vietnam” condition is decisive: most long-term secondments are recharged to the subsidiary, so Vietnam keeps taxing rights and the treaty then works through foreign tax credits at home-country finalization.
6. A social insurance difference
Foreign employees transferred within the enterprise fall outside compulsory Vietnamese social insurance under the scope rules — a practical difference from experts hired directly by the subsidiary. Keep the secondment file ready to evidence this status when insurance or tax authorities cross-check.
7. Frequently asked questions
1. Salary is paid 100% by the parent into an overseas account — must the expert still file in Vietnam?
Yes, if the work is performed in Vietnam — the income is Vietnam-source regardless of the place of payment. Filing is done by the subsidiary if it bears the cost, otherwise by the individual.
2. How does a group tax equalization policy affect Vietnamese tax?
The hypothetical tax withheld is an internal arrangement between the group and the expert; it does not change the actual Vietnamese liability. If the company bears the expert’s Vietnamese tax, that borne amount must be grossed up into taxable income.
3. A 4-month secondment, paid by the parent with no recharge to Vietnam — can the treaty exempt it?
Possibly, if the expert’s residence state has a treaty with Vietnam and all three employment-article conditions are met (presence of no more than 183 days; payer not resident in Vietnam; cost not borne in Vietnam). Prepare the Certificate of Residence and the treaty relief notification dossier.
4. Does a seconded expert need a Vietnamese personal tax code?
Yes. As soon as Vietnam-taxable income arises, the expert needs a tax code for withholding and finalization — registered through the subsidiary on the forms of Circular 90/2026/TT-BTC, or self-registered if self-filing.
This article has been quality-reviewed by the FLAW AI Legal Council
