Are hazardous allowances subject to personal income tax in Vietnam?

Are hazardous allowances subject to personal income tax in Vietnam?

According to Clause 2, Article 2 of Circular 111/2013/TT-BTC which stipulates taxable incomes as follows:

Taxable incomes

...

2. Income from salaries and wages

Income from salaries and wages is the income received by employees from employers, including:

a) Salaries, wages, and other amounts of a similar nature in cash or kind.

b) Allowances, compensations, except for the following allowances and compensations:

b.1) Monthly preferential allowances and one-time compensations as prescribed by the law on preferential treatment for people with meritorious services.

b.2) Monthly compensations and one-time compensations for individuals participating in resistance, national defense, international missions, young volunteers who have completed their missions.

b.3) National defense, security allowances; compensations for armed forces.

b.4) Hazardous allowances for industries, occupations, or work in workplaces with hazardous elements.

b.5) Attraction allowances, regional allowances.

b.6) Emergency hardship compensations, accident compensations, occupational disease compensations, one-time childbirth or adoption compensation, maternity benefits, health recovery subsidies post-maternity, compensations for reduced labor capacity, one-time retirement compensations, monthly survivor pensions, resignation compensations, job loss compensations, unemployment compensations, and other compensations as prescribed by the Labor Code and Social Insurance Law.

b.7) Compensations for individuals under social protection according to legal regulations.

b.8) Service allowances for senior officials.

...

Thus, hazardous allowances for employees working in industries, occupations, or jobs with hazardous elements are not included in the income subject to personal income tax (PIT).

Are hazardous allowances subject to PIT in Vietnam? (Image from Internet)

What incomes are exempt from personal income tax in Vietnam?

According to Article 4 of the Law on Personal Income Tax 2007 supplemented by Clause 3, Article 2 of the Law on Amendments to Tax Laws 2014 and amended by Clause 2, Article 1 of the Amended Law on Personal Income Tax 2012, personal incomes exempt from personal income tax are stipulated as follows:

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

- Income from the transfer of residential housing, homestead land use rights, and assets attached to homestead land of individuals in cases where the individual only possesses a single house or homestead land.

- Income from the land use right value allocated by the State to individuals.

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

- Income of households and individuals directly engaged in agricultural, forestry production, salt-making, aquaculture, and fishing that have not been processed into other products or only undergone preliminary treatment.

- Income from the conversion of agricultural land allocated by the State to households and individuals for production purposes.

- Income from interest on deposits at credit institutions, interest from life insurance contracts.

- Income from remittances.

- Wage earnings for night work, overtime that is higher than day work wages within legal regulations.

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

- Income from scholarships, including:

+ Scholarships from the state budget.

+ Scholarships from domestic and foreign organizations under their educational support programs.

- Income from compensation for life insurance contracts, non-life insurance, compensation for work accidents, state compensation, and other compensations as prescribed by the law.

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

- Income received from foreign aid for charitable or humanitarian purposes in governmental and non-governmental forms approved by competent state agencies.

- Income from wages and salaries of Vietnamese sailors working for foreign shipping companies or Vietnamese shipping companies on international routes.

- Income of individuals who are ship owners, individuals with ship usage rights, and individuals working on ships from activities providing goods, services directly serving offshore fishing and catching.

What are the cases eligible for personal income tax refunds in Vietnam?

Based on Clause 2, Article 8 of the Law on Personal Income Tax 2007, which stipulates cases eligible for personal income tax refunds as follows:

- The amount of PIT paid is higher than the payable PIT amount;

- Individuals who have paid PIT but have taxable incomes not reaching the required tax payment level;

- Other cases as decided by competent state agencies.