“Stay in Vietnam to work legally & don't worry about complicated procedures.” – Asia Legal Group
I. Introduction: Why do foreign workers have to finalize taxes when terminating the contract or before leaving the country?
In recent years, the number of foreign experts, engineers, and senior managers working in Vietnam has increased rapidly. This entails the need to address legal issues – in particular personal income tax (PIT) finalization when:
- Terminate labor contract
- Change company
- End of term
- Departing and returning home (temporarily or permanently)
- No longer have citizenship/work visa in Vietnam
- Do not continue to qualify for residence under the PIT law
Theo Law on Personal Income Tax, Circular 111/2013/TT-BTC and Circular 80/2021/TT-BTC, Foreigners leaving Vietnam must settle taxes before leaving the country, except in the case of authorizing the employer to settle the settlement on behalf of the employer.
If not settled on time, employees may face risks:
- No tax refund
- Arrears and late payment fines
- Difficulty returning to Vietnam to work
- Refused to issue Work Permit/TRC for next entry
- Tax liability cannot be confirmed when completing customs procedures
Therefore, mastering the tax finalization process when terminating the contract or leaving the country is important required and is a key factor for foreigners Stay in Vietnam legally & don't worry about complicated procedures.
II. Latest legal basis
The article closely follows current legal documents:
Law on Personal Income Tax 2007 (amended and supplemented 2012, 2014)
Decree 65/2013/ND-CP
Circular 111/2013/TT-BTC – Instructions for implementing the PIT law
Circular 92/2015/TT-BTC
Circular 80/2021/TT-BTC – Regulations on declaration, payment and finalization of personal income tax
III. Who is required to finalize taxes? (Exclusively for foreign workers)
✔ Tax finalization is required if:
- About to leave Vietnam
- Terminate the labor contract before its term or expiration
- Change company but have income in 2 places
- No longer a resident individual according to the 183-day regulation
- Having income that has not been properly taxed
✔ It is allowed to authorize settlement for businesses if:
- Only have income from one source
- Still residing in Vietnam at the time of authorization
- There is no need for direct tax refund
✔ In case SELF-SETTLEMENT is required:
- Have income from many companies
- Tax refund available
- Leave Vietnam before December 31
- No longer working at the old company
- No longer residing in Vietnam upon authorization
TAX SETTLEMENT WHEN TERMINATION OF LABOR CONTRACTS OR EXIT FOR FOREIGN WORKERS IN VIETNAM
IV. Detailed process for foreigners: Tax settlement when terminating the contract or leaving the country
Below is the in-depth process according to our standards Asia Legal Group, helps you work effectively and 100% legally:
Step 1 — Determine residence status (Resident/Non-Resident)
According to Circular 111/2013:
✔ Residence if:
183+ days in a year or 12 consecutive months
Have a permanent address, TRC or lease ≥ 183 days
✔ Non-resident if the above conditions are NOT met
→ This determines:
- Tax rate (progressive 5–35% or flat 20%)
- Documents to be submitted
- How to calculate taxes before leaving the country
Step 2 — Prepare documents (required)
1. Personal profile:
- Passport (photocopy of all stamped pages)
- Visa/Work Permit/TRC
- Phone number, email
- Register for a personal tax code
2. Income profile:
- Labor contract
- Decided to quit my job
- Payroll/income statement
- Insurance payment voucher
- Tax deduction documents (if any)
3. Family circumstance deduction documents (if resident):
- Dependent profile
- Child's birth certificate and passport (if dependent)
Step 3 — Calculate the amount of tax payable or refunded
Asia Legal Group uses the system Tax Review Protocol, compare:
✔ Real income
✔ Tax deducted ✔ Tax payable according to law ✔ Determination of tax refund (if any)
Step 4 — Submit tax finalization documents
You have 3 options:
1) Submit directly to the Management Tax Department
For example in Ho Chi Minh City: Tax Department of District 7, District 1, District 3...
2) File electronically on the tax portal
3) Authorize the tax service provider
→ Best if you are about to leave Vietnam or do not know Vietnamese.
Step 5 — Receive confirmation of tax liability to exit the country
ASIA LEGAL GROUP company supports you:
- Receive confirmation of tax obligation completion
- Explanation in case of missing documents
- Fast tax refund tracking (3–45 days depending on each case)
V. Application submission address:
✔ Tax Department/Tax Sub-Department where your business is registered
For example:
City Tax Department. Ho Chi Minh – 63 Nguyen Du, District 1
Hanoi Tax Department – 187 Giang Vo, Dong Da
✔ If self-settlement:
Submitted at Tax Department where you reside:
According to the rental contract
According to temporary residence address on TRC
✔ If you have left the country or it is difficult to submit directly:
→ Asia Legal Group receives authorization to submit documents on behalf of the entire country.
VI. Application deadline
1. Before leaving the country
Submit application at least 10–15 days before flight date.
2. When terminating the contract
Not too much 45 days from the day off.
VII. Important notes for foreigners
✔ Note 1: No settlement = No re-entry
Many experts are randomly inspected when taking the second Work Permit.
✔ Note 2: Income from abroad still must be declared
For resident individuals (Resident).
✔ Note 3: No insurance deductions abroad
Only compulsory insurance in Vietnam is calculated as a deduction.
✔ Note 4: Optimize tax refund by redefining residence date
→ A difference of just 1 day can reduce taxes by tens of millions.
✔ Note 5: Dependent records must be registered before the settlement date
→ Otherwise, deduction is not accepted.
VIII. Common violations cause foreign workers to be fined
1. Not finalizing taxes before leaving the country
→ No certificate of completion of tax obligations will be issued
2. Incorrect declaration of residence status
→ Many businesses confuse (Resident ↔ Non-resident)
3. Have income from many sources but not consolidated settlement
4. Lack of tax deduction documents
→ Cannot deduct already paid, must pay again from the beginning.
5. The company does not pay tax documents to employees
Asia Legal Group often has to handle difficult documents such as:
- Missing 6 months of payroll
- No more contact with the old company
- The old business has been dissolved
- There are no more personal tax registration records
IX. Actual Case Study at Asia Legal Group
Case 1 – Japanese expert returned home urgently, not having time to finalize taxes
- Re-entering the country requires additional tax confirmation
- The file is missing 4 months of payroll → Asia Legal Group retrieves the file through the tax authority and completes the settlement within 48 hours.
Case 2 – Korean engineer had his company's tax deducted incorrectly (20% instead of progressive)
→ Tax refund difference up to 96 million VND, refundable within 35 days.
Case 3 – European manager has 2 sources of income in Vietnam but does not combine them
→ Tax arrears + late payment fine
→ Asia Legal Group negotiated a 70% fine reduction.
X. In-depth support services at Asia Legal Group
✔ Tax settlement before leaving the country
✔ Authorize representative to work with tax authorities
✔ Calculate the optimal tax amount to be paid/refunded
✔ Fast tax refund 2–8 weeks
✔ Explain difficult, missing, or confusing documents
✔ Confirmation of completion of tax obligations for re-entry
✔ Tax residence consulting - PIT optimization for foreigners
XI. Conclusion – Why choose Asia Legal Group?
- 15+ years of experience handling foreign documents
- A team of experts with a deep understanding of personal income and immigration law
- Successfully explained 98% of difficult documents
- Fast and flexible processing time
- Comprehensive support from A - Z for individuals and businesses
“Stay in Vietnam to work legally & don't worry about complicated procedures.” Asia Legal Group is committed to accompanying you from the time you work to the time you leave Vietnam – and when you return.
Source: Asia Legal Group
Phone number:028 6674 3333 - 0945 009 002 (Deputy General Director)
Website:https://dinhgiaav.com/
Address: 6-8 Phan Huy Thuc, Tan Kieng Ward, District 7, Ho Chi Minh City
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