Expat tax advice - Vietnam
Discussion
A friend of mine is moving to work in Vietnam for a 2 years.
He's naive about tax and seems to think he won't pay any tax in Vietnam and hadn't even considered that he might have to pay tax when he brings it back to the UK.
Does anyone know of an accountant who can put him straight and give him the information he needs to avoid any pitfalls.
He's naive about tax and seems to think he won't pay any tax in Vietnam and hadn't even considered that he might have to pay tax when he brings it back to the UK.
Does anyone know of an accountant who can put him straight and give him the information he needs to avoid any pitfalls.
I am 99.9% sure (without having the ability to check my technical manuals) that if he is leaving to work on on a permanent full-time employment contract, then he will be considered non-resident for UK tax from the date he leaves to the date he returns and all such income would not be subject to UK income tax whether he spent it there or brings it back.
However, the rules on residency are about to change as of April 2013 which may change things, but I think so long as he does not return to the UK for any more than 10 days a year then the above analysis will still hold true.
He should get some advice before he leaves - it shouldn't cost much and will give him certainty about his tax affairs.
Note that any income still earned in the UK such as interest, dividends, rental of property whilst abroad are still taxable in full.
David
However, the rules on residency are about to change as of April 2013 which may change things, but I think so long as he does not return to the UK for any more than 10 days a year then the above analysis will still hold true.
He should get some advice before he leaves - it shouldn't cost much and will give him certainty about his tax affairs.
Note that any income still earned in the UK such as interest, dividends, rental of property whilst abroad are still taxable in full.
David
Assuming it is a full time contract working abroad for the next two years then your friend will not be liable to UK tax on his employment income as he should break UK tax residence. Full time work abroad means no more than 20 days working back in the UK per tax year. From a residence point of view he cannot spend more than 90 days per annum back in the UK either (counted as being present in the UK at midnight). As mentioned above, the residence rules are changing from April 2013.
He will be liable to tax in Vietnam on his employment income. There may be tax planning but I would need to check with my colleagues over there for this. If he is on a local Vietnam employment contract then NIC is not due either. If he remains on a UK contract of employment then UK NIC is due for the first 52 weeks after leaving the UK.
If your friend wants advice then please do PM me. Please note I would have to pass this through the Company I work for and it will cost.
He will be liable to tax in Vietnam on his employment income. There may be tax planning but I would need to check with my colleagues over there for this. If he is on a local Vietnam employment contract then NIC is not due either. If he remains on a UK contract of employment then UK NIC is due for the first 52 weeks after leaving the UK.
If your friend wants advice then please do PM me. Please note I would have to pass this through the Company I work for and it will cost.
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