Are incomes from selling flowers during the 2025 Tet holiday subject to personal income tax in Vietnam?

Are incomes from selling flowers during the 2025 Tet holiday subject to personal income tax in Vietnam?

First and foremost, based on Clause 1, Article 2 of Circular 111/2013/TT-BTC, income subject to business tax is defined as follows:

Taxable Income

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1. Income from Business

Income from business refers to income derived from production and business activities in the following fields:

a) Income from production and business of goods and services in all fields and professions in accordance with the law, such as: production, business of goods; construction; transportation; food services; service businesses, including rental services for houses, land use rights, water surface, and other assets.

b) Income from independent practice of individuals in fields and professions licensed or certified in accordance with the law.

c) Income from agricultural production, forestry, salt production, aquaculture, fishing activities that do not meet the tax exemption conditions guided at point e, clause 1, Article 3 of this Circular.

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Simultaneously, based on Article 2 of the Personal Income Tax Law 2007, the subjects required to pay personal income tax are defined as follows:

Tax Subjects

1. Tax subjects include resident individuals liable to pay tax for incomes specified in Article 3 of this Law generated within and outside the territory of Vietnam, and non-resident individuals liable to pay tax for incomes specified in Article 3 of this Law generated within the territory of Vietnam.

2. A resident individual is one who meets one of the following conditions:

a) Being present in Vietnam for 183 days or more within a calendar year or consecutive 12-month period from the first date of arrival in Vietnam;

b) Having a regular place of residence in Vietnam, including having a registered permanent residence or renting a house in Vietnam under a rental contract with a term.

3. A non-resident individual is one who does not meet the conditions stipulated in Clause 2 of this Article.

In addition, Article 4 of Circular 40/2021/TT-BTC states the principles of tax calculation as follows:

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2. Households and individuals engaged in business with an annual revenue from production and business activities not exceeding VND 100 million are not required to pay VAT and personal income tax in accordance with legal regulations on VAT and personal income tax. Households and individuals in business must declare tax accurately, honestly, sufficiently, and submit tax documentation on time; they shall be held accountable under the law for the accuracy, honesty, and completeness of their tax records.

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Therefore, according to the above regulations, income from selling flowers during the 2025 Tet holiday is subject to personal income tax, and individuals selling flowers at that time will have to pay personal income tax if their annual revenue is from VND 100 million or more.

Are incomes from selling flowers during the 2025 Tet holiday subject to personal income tax in Vietnam? (Image from the Internet)

What incomes are exempt from personal income tax in Vietnam?

Based on Article 4 of Decree 65/2013/ND-CP, the following incomes are exempt from tax:

- Income from the transfer of real estate (including houses, future construction projects, in compliance with the real estate business law) between: Spouses; biological parents and children; adoptive parents and children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings.

- Income from the transfer of housing, homestead land use rights, and assets attached to homestead land by individuals in cases where the transferor owns only one residence or one homestead land plot in Vietnam.

Individuals transferring their sole residence or homestead land plot in Vietnam under this Clause must satisfy the following conditions:

+ At the time of transfer, the individual only has ownership, right of use to one house or one parcel of land (including any structures attached to the parcel);

+ The individual must have ownership or usage of the residence or homestead land for at least 183 days prior to transfer;

+ The entire residence or homestead land use right must be transferred.

Determination of rights to residence or homestead land is based on the certificate of ownership and use rights.

Individuals with transferred residence or homestead land must declare and bear the responsibility before the law for the accuracy of the declarations.

Should authorities discover false declarations, exemptions will be denied, and legal actions taken as per law.

- Income from land use rights received without payment or reduced land levy from the State as per law.

- Income from the inheritance, gifts of real estate (including houses, future construction projects, in compliance with real estate business law) between: Spouses; biological parents and children; adoptive parents and children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings.

- Income of households, individuals directly engaged in agricultural production, forestry, salt production, aquaculture, fishing, not processed into other products, or only ordinarily processed.

Households and individuals directly involved in production under this Clause must satisfy the following conditions:

+ Have legitimate land use, and water surface usage rights for production and directly engage in agricultural, forestry production, salt making, and aquacultural production. Fishing requires ownership or use rights to boats and direct fishing participation;

+ They must reside in the locality where agricultural, forestry, salt production, or aquaculture is conducted, as per residency law.

- Income from agricultural land conversion by families, individuals allocated land for production by the State.

- Income from bank savings interest, credit institution deposits, and life insurance contract interest.

- Income from remittances.

- Night shift, overtime pay higher than regular day shift or working hour wages, as per law.

- Pension paid by the Social Insurance Fund under the Social Insurance Law, monthly pension from a voluntary pension fund. Tax exemption for pensions paid by foreign entities to individuals residing and working in Vietnam.

- Income from scholarships including:

+ Scholarships sourced from the state budget;

+ Scholarships from domestic and foreign organizations (including living allowances) per their educational support programs.

- Compensation from life, non-life, health insurance, occupational accident compensation, state, and other legal compensations.

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

- Income from foreign aid for charitable, humanitarian purposes in forms approved by the Government of Vietnam, by competent state agencies.

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

- Income for owners, users of ships, and seafarers from providing goods and services directly serving offshore fishing.

How to determine the personal income tax period in Vietnam?

Based on Article 7 of the Personal Income Tax Law 2007 (amended by Clause 3, Article 1 of the Law on Personal Income Tax Amendment 2012), the tax calculation period is prescribed as follows:

- The tax period for resident individuals is defined as:

+ Annual tax period applicable to income from business; income from salaries and wages;

+ Per income occurrence tax period for investment income; capital transfer, excluding securities transfer; real estate transfer; winnings; royalties; franchise income; inheritance; gifts;

+ Per securities transfer instance or annually for securities transfer income.

- For non-resident individuals, the tax period is per income occurrence for all taxable incomes.