Uni 04-06-2026 - PIT, CIT for individual contracts without businesses registration

Official letter 2653/DAN-QLDN2 regarding PIT, CIT for individual contracts without businesses registration:

Based on the above regulations, if the Company signs a subcontracting contract with an individual without a business registration to perform work items in a construction project, the income received by the individual is subject to personal income tax on salaries and wages. The Company is responsible for deducting personal income tax at a rate of 10% before paying the individual, regardless of whether the individual represents a group of individuals.

The aforementioned expenses are deductible when determining taxable income for corporate income tax purposes, provided they meet the provisions of Clause 1, Article 9 of Decree No. 320/2025/ND-CP and do not fall under the non-deductible expenses stipulated in Clause 8, Article 10 of Decree No. 320/2025/ND-CP, and are supported by specific documents:

+ Subcontracting agreement;

+ Contract termination agreement;
+ Employee's national identity card;
+ Production acceptance report or work completion confirmation report;
+ Time sheet;
+ Payment documents as per regulations;
+ Personal income tax deduction documents and other relevant documents… (if any)

In cases where a company makes multiple monthly payments of salaries and wages to employees in accordance with the regulations on payment terms of the Labor Code, and these payments meet the conditions stipulated in Clause 1, Article 9 and do not fall under the cases specified in Point a, Clause 8, Article 10 of Decree 320/2025/ND-CP, then the company is allowed to include them as deductible expenses when determining corporate income tax. Specifically, for individual salary and wage payments of VND 5 million or more to employees from the effective date of Decree 320/2025/ND-CP (December 15, 2025), the enterprise must have non-cash payment documents as prescribed to be included as deductible expense.