The Civil Code provides that an organisation is recognised as a legal entity when it meets the following conditions: (i) being established in accordance with the Civil Code and other relevant laws; (ii) having an executive body and other bodies as decided by the legal entity or in accordance with the law. The organisational structure, tasks and powers of the executive body of a legal entity are defined in the charter of the legal entity or in the decision on establishing the legal entity; (iii) having properties independent of other individuals or legal entities and take self-responsibility with its properties; and (iv) independently engaging in legal relationship on its behalf. Thus, although the subsidiaries belong to the same group, in accordance with the said law, these companies will in fact be considered independent legal entities and also sole Employers from the perspective of labour law. On this basis, if an Employee works at the same time for all these companies, each company will have to sign a separate LC with such Employee If one of the companies fails to enter into an LC with such Employee, it will be considered a violation of labour law and will be subject to an administrative fine of between 2,000,000 and VND 4,000,000 VND for a violation involving from 01 to 10 Employees.
Concerning the issue of PIT finalisation, the current tax law stipulates that individuals earning income from salaries or wages will authorise income-paying organisations and individuals to make tax finalisation on their behalf in the following cases:
- Individuals who only earn income from salaries or wages sign lLCs with a term from 3 months or more at an income-paying organisation or individual and are actually working there at the time of authorising tax finalisation, even if they do not work full 12 months in the year;
- Individuals who only earn income from salaries or wages sign LCs with a term from 3 months or more at an income-paying organisation or individual and are actually working there at the time of authorising tax finalisation, even if they do not work full 12 months in the year and at the same time have current income at other places on a monthly average of no more than VND 10,000,000 and suffer 10% tax deduction by the income paying organisation without receiving any request for tax finalisation of this income; and
- Individuals who are Employees transferred from the old organisation to the new organisation where the old organisation performs the division, split, consolidation, merger or conversion of the enterprise. At the end of the year, if Employees authorise tax finalisation, the new organisation must recover the PIT deduction certificate issued by the former organisation to Employees (if any) to provide a basis for summarising income, deducted tax amounts and make tax finalisation on behalf of Employees.
Thus, in comparison with the aforesaid cases authorised for tax finalisation, in this case Employees who earn income from many income paying organisations may not authorise tax finalisation, but must carry out tax finalisation by themselves at the tax administration agency.
Article 74.1 Civil Code
Article 3.2 Labor Code
Articles 3 and 5 Decree 95/2013/NĐ-CP dated 22/08/2013 as amended and supplemented by Decree 88/2015/NĐ-CP dated 07/10/2015
Article 16.2 Circular 156/2013/TT-BTC dated 06/11/2013 and Article 21.3 Circular 92/2015/TT-BTC dated 15/06/2015