Are incomes from betting winnings subject to personal income tax in Vietnam?

Are incomes from betting winnings subject to personal income tax in Vietnam?

According to the provision at point c, clause 6, Article 3 of the Law on Personal Income Tax 2007 as amended by clause 2, Article 2 of the Law on Amendments to Tax Laws 2014, taxable income is defined as follows:

Taxable Income

Taxable personal income includes the following types of income, except for tax-exempt income specified in Article 4 of this Law:

...

6. Income from winnings, including:

a) Lottery winnings;

b) Winnings in promotional forms;

c) Winnings in betting forms;

d) Winnings in games, contests with prizes, and other forms of winnings.

7. Income from copyrights, including:

a) Income from the transfer and licensing of intellectual property rights;

b) Income from technology transfers.

8. Income from franchising.

9. Income from inheritance, which includes securities, capital portions in economic organizations, business establishments, real estate, and other assets that require registration for ownership or use.

10. Income from gifts, which includes securities, capital portions in economic organizations, business establishments, real estate, and other assets that require registration for ownership or use.

The Government of Vietnam prescribes in detail and guides the implementation of this Article.

From the above provisions, it can be concluded that income from winnings in betting forms is subject to personal income tax.

Are incomes from betting winnings subject to personal income tax in Vietnam? (Image from the Internet)

How to calculate personal income tax on betting winnings for Vietnamese residents?

Pursuant to Article 15 of Circular 111/2013/TT-BTC as amended by Article 18 of Circular 92/2015/TT-BTC, the tax basis for income from winnings for Vietnamese residents is as follows:

The tax basis for income from winnings includes taxable income and tax rate.

(1) Taxable Income

- Taxable income from winnings is the value of the prize exceeding VND 10 million received per winning instance, regardless of the number of times the winnings are received.

- In cases where one prize is won by multiple individuals, the taxable income is divided among the prize recipients. The winning individuals must present legal evidence. If no legal evidence is available, the winnings are attributed to one individual. If an individual wins multiple prizes in a competition, the taxable income is calculated based on the total value of the prizes.

- For winnings in betting forms, the entire prize value exceeding VND 10 million received by the participant, before any costs are deducted, is considered taxable income.

(2) Tax Rate

The personal income tax rate on income from winnings applies at a flat tax rate of 10%.

(3) Tax Calculation Formula

Personal Income Tax Payable = Taxable Income x 10% Tax Rate

(4) Timing for Determining Taxable Income

The timing for determining taxable income from winnings is when the organization or individual pays the prize to the winner.

How to calculate personal income tax on betting winnings for Vietnamese non-residents?

According to Article 23 of Circular 111/2013/TT-BTC, income from winnings for Vietnamese non-residents is regulated as follows:

(1) Taxable Income

Taxable income from winnings for Vietnamese non-residents is the prize value exceeding VND 10 million per winning instance in Vietnam.

Income from winnings for Vietnamese non-residents is determined like Vietnamese residents, as guided in clause 1, Article 15 of Circular 111/2013/TT-BTC.

(2) Tax Calculation Formula

Personal Income Tax Payable = Taxable Income x 10% Tax Rate

(3) Timing for Determining Taxable Income

The timing for determining taxable income is when the organization or individual in Vietnam pays the prize money to the non-Vietnamese resident.

What are Vietnamese residents and Vietnamese non-residents?

According to Article 2 of the Law on Personal Income Tax 2007, resident and Vietnamese non-residents are defined as follows:

- A Vietnamese resident is someone who meets one of the following conditions:

+ Present in Vietnam for 183 days or more within a calendar year or a consecutive 12 months from the first day of presence in Vietnam;

+ Has a permanent residence in Vietnam, including having a registered permanent residence or a leased house to stay in Vietnam per a rental contract of definite term.

- A non-Vietnamese resident is someone who does not meet the conditions above:

+ Present in Vietnam for 183 days or more within a calendar year or a consecutive 12 months from the first day of presence in Vietnam;

+ Has a permanent residence in Vietnam, including having a registered permanent residence or a leased house to stay in Vietnam per a rental contract of definite term.