Are gifts of movables required for registration from relatives exempt from personal income tax in Vietnam?

Are gifts of movables required for registration from relatives exempt from personal income tax in Vietnam?

Pursuant to Article 4 of the 2007 Personal Income Tax Law, supplemented by Clause 3, Article 2 of the 2014 Law Amending Tax Laws, the regulation is as follows:

Tax-exempt Income

1. Income from real estate transfers between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings.

2. Income from transferring houses, rights of homestead land use, and properties attached to the homestead land of individuals, in cases where the individual has only one house or homestead land.

3. Income from the value of land use rights granted by the State.

4. Income from inheritances, gifts that are real estate between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings.

5. Income of households and individuals directly engaged in agriculture, forestry, salt production, aquaculture, and fishing that has not been processed into other products or has only undergone preliminary processing.

6. Income from the conversion of agricultural land allocated by the State for production by households or individuals.

7. Income from interest on deposits at credit institutions and life insurance contracts.

8. Income from remittances.

9. The portion of night-shift wages, overtime wages that is higher than the day-shift wages, and wages within normal working hours as stipulated by law.

10. Retirement pensions paid by the Social Insurance Fund; retirement pensions paid monthly by voluntary pension funds.

11. Income from scholarships, including:

a) Scholarships received from the state budget;

b) Scholarships received from organizations within and outside the country as part of the studying incentive program of such organizations.

12. Income from indemnities of life insurance contracts, non-life insurance, compensation for occupational accidents, state compensation, and other compensations prescribed by law.

13. Income received from charitable funds established or recognized by competent state authorities, operating for charitable, humanitarian purposes, non-profit.

14. Income received from foreign aid for charitable, humanitarian purposes, both governmental and non-governmental, approved by competent state authorities.

Therefore, one of the tax-exempt cases is income from receiving inheritances or gifts that are real estate between certain family members. Thus, even though a gift from a relative is a registered movable asset, it is not exempt from personal income tax.

Are gifts of movables required for registration from relatives exempt from personal income tax in Vietnam? (Image from the Internet)

Shall an employee suffering from a occupational accident be exempted from PIT in Vietnam?

Pursuant to Article 4 of Circular 111/2013/TT-BTC, the regulation is as follows:

Tax Reduction

According to Article 5 of the Personal Income Tax Law, Article 5 of Decree No. 65/2013/ND-CP, taxpayers facing difficulties due to natural disasters, fires, accidents, severe illnesses affecting their tax payment capability are considered for a tax reduction corresponding to the extent of the damage but not exceeding the payable tax amount. Specifically, as follows:

1. Determining the Reduced Tax Amount

a) Tax reduction assessment is conducted by the tax year. Taxpayers experiencing difficulties due to natural disasters, fires, accidents, severe illnesses in any tax year are considered for a reduction in the payable tax amount for that year.

b) The tax payable as the basis for considering tax reduction is the total personal income tax the taxpayer has to pay in the tax year, including:

b.1) Personal income tax paid or deducted concerning income from capital investment, income from capital transfer, income from property transfer, income from winnings, income from royalties, income from franchise, income from inheritance, income from gifts.

b.2) Personal income tax payable concerning income from business and income from wages, salaries.

c) The basis for determining the extent of damage for tax reduction is the actual total cost to remedy the damage minus (-) the compensation received from insurance organizations (if any) or from the organizations or individuals causing the accident (if any).

d) The reduced tax amount is determined as follows:

d.1) If the payable tax amount in the tax year is greater than the extent of the damage, the reduced tax amount equals the extent of the damage.

d.2) If the payable tax amount in the tax year is less than the extent of the damage, the reduced tax amount equals the payable tax amount.

2. The procedures, documents for considering tax reduction, are implemented according to the legal guidance on tax management.

The regulation provides guidance when taxpayers face difficulties due to natural disasters, fires, accidents, or severe illnesses affecting their ability to pay taxes, they are considered for a tax reduction corresponding to the extent of the damage but not exceeding the payable tax amount.

Thus, in the case of an accident (including a occupational accident) that affects tax payment capability, a tax reduction corresponding to the extent of the damage is considered, but not exceeding the payable tax amount.

What are regulations on taxable personal income from real estate transfers in Vietnam?

Based on Clause 5, Article 2 of Circular 111/2013/TT-BTC, taxable income from real estate transfers includes:

a) Income from transferring land use rights.

b) Income from transferring land use rights and assets attached to the land. Assets attached to the land include:

b.1) Houses, including future-formed houses.

b.2) Infrastructure and construction works attached to the land, including future-formed construction works.

b.3) Other assets attached to the land, including products of agriculture, forestry, fisheries (such as crops, livestock).

c) Income from transferring house ownership rights, including future-formed houses.

d) Income from transferring land rental rights, water surface rental rights.

đ) Income when contributing capital by real estate to establish a business or increase the business capital of enterprises as prescribed by law.

e) Income from the authorization of real estate management where the authorized person has the right to transfer real estate or has rights similar to real estate ownership as prescribed by law.

g) Other incomes received from real estate transfers in any form.