Are individuals with revenue from selling flowers and ornamental plants during Tet required to pay personal income tax in Vietnam?

Are individuals with revenue from selling flowers and ornamental plants during Tet required to pay personal income tax in Vietnam?

Based on Clause 1, Article 2 of Circular 111/2013/TT-BTC, the taxable income from business is regulated as follows:

Taxable Income

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1. Income from business

Income from business is the income derived from production and business activities in the following sectors:

a) Income from the production and trading of goods and services in all sectors and business lines as prescribed by law such as: production, trading of goods; construction; transportation; restaurant business; service business, including house rental services, land use rights, water surface, and other assets.

b) Income from independent practice activities of individuals in fields and occupations that are licensed or certified according to law provisions.

c) Income from agriculture, forestry, salt production, aquaculture, fishing activities that do not meet the conditions for tax exemption as guided in 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 which provides for the subjects liable to personal income tax as follows:

Tax Subjects

1. The subject of personal income tax is a resident individual with taxable income specified in Article 3 of this Law arising within and outside the territory of Vietnam and a non-resident individual having taxable income specified in Article 3 of this Law arising within the territory of Vietnam.

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

a) Being present in Vietnam for 183 days or more in a calendar year or for 12 consecutive months from the first day of presence in Vietnam;

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

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

Thus, according to the two aforementioned regulations, individuals with revenue from selling flowers and ornamental plants during Tet are subject to personal income tax.

Are individuals with revenue from selling flowers and ornamental plants during Tet required to pay personal income tax in Vietnam? (Image from the Internet)

What income is exempt from personal income tax in Vietnam?

According to Article 4 of the Personal Income Tax Law 2007 (amended by Clause 2, Article 1 of the Amended Personal Income Tax Law 2012, supplemented by Clause 3, Article 2 of the 2014 Law Amending Various Laws on Tax), the following personal income is exempt from tax:

- 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.

- Income from the transfer of a sole residential house, land use rights, and assets attached to them.

- Income from the value of land use rights allocated by the State.

- Income from inheritance, gifts being 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.

- Income of households and individuals directly engaged in agriculture, forestry, salt production, aquaculture, or catching aquatic products without processing into other products or only through primary processing.

- Income from conversion of agricultural land allocated by the State for production.

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

- Income from overseas remittances.

- Night shift or overtime wages paid higher than day shifts or regular working hours as prescribed by law.

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

- Income from scholarships, including:

+ Scholarships received from the state budget;

+ Scholarships received from domestic and foreign organizations under their academic encouragement programs.

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

- Income received from charitable funds permitted or recognized by competent state agencies, operating for charitable, humanitarian purposes, not for profit.

- Income from foreign sponsorship for charitable, humanitarian purposes in the form of governmental and non-governmental aid approved by competent state agencies.

- Income from wages and salaries of Vietnamese crew members working for foreign shipping companies or Vietnamese shipping companies engaged in international transport.

- Income of individuals owning ships, individuals having the right to use ships and individuals working on ships from the provision of goods and services directly serving offshore fishing activities.

What are regulations on the personal income tax period in Vietnam?

According to Article 7 of the Personal Income Tax Law 2007 as amended by Clause 3, Article 1 of the Amended Personal Income Tax Law 2012, the personal income tax period is regulated as follows:

- The tax period for resident individuals is prescribed as follows:

+ The annual tax period applies to income from business; income from wages and salaries;

+ Each occurrence of income applies to income from capital investment; income from capital transfer, excluding security transactions; income from real estate transfer; winnings; copyright income; franchise income; inheritance; gift income;

+ Each transfer or annually for income from securities transfer.

- The tax period for non-resident individuals is calculated for each occurrence of income applicable to all taxable income.