Wolfram Grünkorn

According to Article 2 (1) (b) Law on Corporate Income Tax (CIT) a foreign enterprise (FE) is subject to CIT in Vietnam “with or without a permanent establishment in Vietnam.”

The case: German company A employs person B with residence in Vietnam for working on projects of A in Germany and other countries. A is not registered in Vietnam. A and B intended that B will be working for A in Germany, but this plan cannot be implemented due to COVID-19 restrictions. After these restrictions are lifted, B remains in Vietnam. B does not have an independent business in Vietnam, he is employee.

Vietnam establishes the Foreign Contractor Withholding Tax, which is a system for calculating and paying VAT and CIT