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 the legal relationship on its behalf. Thus, although the subsidiaries belong to the same group abroad, in accordance with the said law, these companies will in fact be considered independent legal entities and also independent Employer from the perspective of labour law. On this basis, if the Employee simultaneously works for all these companies, each enterprise will have to sign a separate LC with the Employee. If one of the companies fails to enter into a LC with such Employee, it will be considered a violation of labour law and will be subject to an administrative fine of between 4,000,000 and VND
Concerning the issue of PIT finalisation, the Law on PIT stipulates that individuals earning income from salary or wages will authorise income-paying organisations and individuals to make tax finalisation on his or her behalf in the following cases:
Individuals who only earn income from salary or wages sign the LC with a term from 03 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. If individuals who is the Employee transferred from the old organisation to the new organisation, such an individual can authorise tax finalisation for the new organisation.
Individuals who only earn income from salary or wages sign the LC 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 VND10,000,000 and suffer 10% tax deduction by the income paying organisation without receiving any request for tax finalisation of this income.
Thus, in comparison with the aforesaid cases authorised for tax finalisation, in this case, the Employee who earns income from many income paying organisations may not authorise tax finalisation, but must carry out tax finalisation by himself or herself at the tax administration agency in accordance with the Law on PIT.
Article 74.1 of the Civil Code
Article 3.2 of the Labour Code
Article 8.6. (d.2) of Decree 126/2020/NĐ-CP Government dated 19 October 2020