Are high-value gifts taxable in Vietnam?

Are high-value gifts taxable in Vietnam?

Based on the provisions in Clause 10, Article 2 of Circular 111/2013/TT-BTC, income from receiving gifts subject to personal income tax is the income that individuals receive from organizations or individuals both domestically and internationally. Specifically:

- For gifts received as securities, including: stocks, stock subscription rights, bonds, treasury bills, fund certificates, and other types of securities as stipulated in the Securities Law; shares of individuals in joint-stock companies as stipulated in the Enterprise Law.

- For gifts received as capital in economic organizations or business establishments, including: capital in limited liability companies, cooperatives, partnerships, business cooperation contracts, capital in private enterprises, individual business establishments, or entire business establishments if they are private enterprises or individual business establishments.

- For gifts received as real estate, including: land use rights; land use rights with attached assets; ownership rights of houses, including future-formed houses; infrastructure and construction works attached to land, including future-formed constructions; land lease rights; water surface lease rights; other income from inheritance as real estate in any form, except income from real estate gifts as guided in Point d, Clause 1, Article 3 of Circular 111/2013/TT-BTC.

- For gifts received as other assets that must be registered for ownership or use rights with the State management agency, such as: cars; motorcycles, scooters; ships, including barges, canoes, tugboats, pushers; boats, including yachts; airplanes; hunting guns, sports guns.

Are high-value gifts taxable in Vietnam? (Image from Internet)

How to calculate the personal income tax for receiving high-value gifts in Vietnam?

* For resident individuals:

Based on the provisions of Point d, Clause 1, Clause 2, Article 16 of Circular 111/2013/TT-BTC (Point d, Clause 1 is amended by Clause 2, Article 19 of Circular 92/2015/TT-BTC), the tax basis for income from receiving gifts is taxable income and tax rate.

In which:

(1) Taxable income from gift receipt of resident individuals is other assets that must be registered for ownership or use rights with the State management agency: the value of the asset is determined based on the fee book stipulated by the Provincial People's Committee at the time the individual completes the procedures for registering ownership, use rights, inheritance, or receiving gifts.

In the case of individuals receiving gifts as imported assets and having to pay taxes related to asset importation, the value of the asset for calculating personal income tax regarding inheritance gifts is the taxable price by the Provincial People's Committee at the time of registration of ownership, usage rights minus (-) taxes paid at the importation stage by the individual according to regulations.

(2) The tax rate is 10%.

* For non-resident individuals:

Based on the provisions of Article 23 of Circular 111/2013/TT-BTC, the tax basis for income from receiving gifts is taxable income and tax rate.

In which:

(1) Taxable income from gifts of non-resident individuals is the value of the gift that exceeds 10 million VND for each income occurrence in Vietnam.

Income from gifts received by non-resident individuals is determined similarly to resident individuals as guided in Point d, Clause 1, Article 16 of Circular 111/2013/TT-BTC.

(2) The tax rate is 10%.

When is the taxable income from received gifts determined for personal income tax payment in Vietnam?

* For resident individuals:

Based on the provisions of Point c, Clause 3, Article 16 of Circular 111/2013/TT-BTC, the time to determine taxable income for personal income tax payment when receiving gifts is when the individual completes the procedures for registering ownership or use rights of the asset in Vietnam.

* For non-resident individuals:

Based on the provisions of Point c, Clause 3, Article 23 of Circular 111/2013/TT-BTC, the time to determine taxable income for personal income tax payment when receiving gifts is when the individual completes the procedures for registering ownership or use rights of the asset in Vietnam.

In summary, not all cases of receiving gifts require personal income tax payment, only when an individual receives a gift from another individual or organization, domestically or internationally, that falls under types of gifts such as securities, capital in economic organizations, business establishments, real estate, or other assets that must be registered for ownership or use rights with the State management agency and have a value exceeding 10 million VND, then personal income tax is payable.

Note: For income from receiving real estate gifts (including houses, future-formed constructions according to real estate business law) between: spouses; biological parents with biological children; adoptive parents with adoptive children; parents-in-law with daughters-in-law; parents-in-law with sons-in-law; paternal grandparents with grandchildren, maternal grandparents with grandchildren; siblings with each other, this income will be exempted from tax (According to Point d, Clause 1, Article 3 of Circular 111/2013/TT-BTC).