A representative office in Vietnam earns no revenue, so it has no corporate income tax or VAT to file. What it does have is people: local staff, often a chief representative paid by head office, and a set of payroll, personal income tax and social insurance obligations that run every month. We run that cycle for you and keep head office informed in English.
Background
A representative office of a foreign trader may carry out liaison, market research and trade promotion, but no directly profit-generating activity. That keeps its tax profile simple, but not empty. As an employer it must calculate salaries, withhold personal income tax, declare it on a monthly or quarterly cycle and finalise it after the year end. It must also register and pay compulsory social, health and unemployment insurance for eligible employees, and submit its annual activity report to the licensing authority by 30 January each year.
Most of these obligations sit with the office itself, not with head office. Because a representative office rarely has an in-house finance team, they tend to fall between the chief representative, a local administrator and the parent company’s finance department.
Common challenges
- Income paid offshore. Salary or bonuses paid by head office abroad for work performed in Vietnam remain taxable in Vietnam and still need to be declared, which is easy to overlook.
- Expatriate tax residency. Whether the chief representative is a tax resident (183-day and permanent residence tests) changes the tax rate and whether worldwide income is taxable.
- Gross-up and benefits in kind. Housing, school fees, allowances and net-of-tax arrangements need to be treated correctly in the tax base.
- Insurance registration. New hires, salary changes and leavers must be reported to the social insurance agency on time, including foreign employees where they are covered.
- Annual deadlines. The annual activity report and the personal income tax finalisation fall in the first quarter, when head office is busy closing its own year.
How TrustlineAX helps
- Monthly payroll. Gross-to-net and net-to-gross calculations, payslips in English and Vietnamese, and a payroll summary for head office approval before payment.
- Personal income tax. Registration of tax codes and dependants, withholding, periodic PIT declarations and the annual finalisation for the office and, where authorised, for its employees.
- Chief representative and expatriate tax. Tax residency review, treatment of income paid abroad and benefits in kind, and declarations for income not paid through the local payroll.
- Social insurance. Registration, monthly contributions, changes in salary or headcount, and support with claims such as sickness and maternity benefits.
- Annual activity report. Preparation and submission of the representative office’s annual operating report to the licensing authority before the 30 January deadline.
- Expense records and head office reporting. A simple monthly schedule of office expenses and fund transfers from head office, in your parent company’s format, so you have one clear view of the office’s running cost.
- Compliance calendar. A single calendar of payroll, tax, insurance and reporting deadlines, plus reminders ahead of licence renewal.
How we work
- Review. We check your current payroll, tax and insurance position and any gaps from previous periods.
- Set-up. Payroll inputs, approval flow and reporting format are agreed with the chief representative and head office.
- Monthly cycle. We calculate payroll, prepare declarations and payments, and send a short English summary each month.
- Year-end. PIT finalisation and the annual activity report are prepared early and filed before the deadlines.
Frequently asked questions
Does a representative office need full accounting services?
Usually not to the same extent as a company. A representative office has no revenue and does not file corporate income tax or VAT returns. Its core recurring work is payroll, personal income tax, social insurance and the annual activity report, supported by orderly records of its expenses and funding from head office.
Is the chief representative’s salary taxable in Vietnam if it is paid abroad?
Yes. Employment income earned for work performed in Vietnam is taxable in Vietnam regardless of where it is paid. Income paid by head office offshore must still be declared, either through the office or by the individual, depending on how it is paid.
Do foreign employees of a representative office pay social insurance?
Foreign employees holding a work permit and an eligible labour contract can fall within compulsory social and health insurance. We review each employee’s contract and status so contributions start and stop at the right time.
When is the annual activity report due?
A representative office of a foreign trader must report on its activities for the previous year to the licensing authority by 30 January each year. We prepare and submit it as part of the year-end cycle.
Can you take over from our current provider mid-year?
Yes. We review the declarations and contributions filed so far, agree a cut-over month and take over the cycle without a gap.