Are irregular allowances for difficulties subject to personal income tax in Vietnam?

Are irregular allowances for difficulties subject to PIT in Vietnam?

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

Taxable incomes

According to Article 3 of the Law on PIT and Article 3 of the Decree No. 65/2013/ND-CP, the incomes subject to PIT (hereinafter referred to as taxable incomes) include:

1. Incomes from business

Incomes from business are incomes earned from the production and sale. To be specific:

a) Incomes from production and sale of goods and services that belong to all industries such as: production, goods sale, construction, construction, restaurants, service provision including lease of houses, right to use land, water surface, and other property.

b) Incomes from freelance works of individuals in the fields that are licensed or certificated as prescribed by law.

c) Incomes from agriculture, forestry, salt production, and fishery that are not eligible for tax exemption according to Point e Clause 1 Article 3 of this Circular.

2. Incomes from wages and remunerations.

Incomes from wages and remunerations (hereinafter referred to as wages) are incomes paid to employees from employers, including:

a) Wages, remunerations, and the other amounts paid as wages or remunerations in cash or not in cash.

b) Allowances and benefits, except for:

b.1) Monthly benefits, lump-sum benefits and allowances according to regulations of law on incentives for contributors.

b.2) Monthly allowances and lump-sump allowances for the persons that participate in the resistance movements, national defense, fulfillment of international tasks, and discharged volunteers.

b.3) Benefits for national defense and security; subsidies for the armed forces.

b.4) Benefits for dangerous or harmful works.

b.5) Benefits for employees in disadvantaged areas.

b.6) Irregular allowances for difficulties, occupational accident benefits, occupational illness benefits, lump-sum allowances for childbirth or adoption, maternity leave benefits, post-maternity recovery benefits, benefits for reduction in work ability, lump-sum pension, monthly widow’s pension, severance pay, redundancy pay, unemployment benefits, and other benefits according to the Labor Code and the Law on Social insurance.

b.7) Benefits for beneficiaries of social security.

b.8) Benefits for senior officers.

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Irregular allowances for difficulties are not subject to PIT.

Are irregular allowances for difficulties subject to PIT IN vIETNAM? (Image from Internet)

Which authorities receive PIT finalization dossiers in Vietnam?

Under subitem 2, Section 4 of Official Dispatch 13762/CTHN-HKDCN 2023, regulations are as follows:

Submission of PIT finalization dossiers

PIT finalization dossiers shall be submitted in accordance with the provisions of Clause 8 Article 11 of the Government’s Decree No. 126/2020/ND-CP dated October 19, 2020. In case an individual declares and submits PIT finalization dossier through the website: https://canhan.gdt.gov.vn, the tax authority shall be determined by the system based on the information about tax obligations incurred in the year provided by that individual.

PIT finalization dossiers will be submitted as follows:

2.1. Income payers shall submit PIT finalization dossiers to their supervisory tax authorities.

2.2. For individuals directly finalizing PIT with tax authorities

- A resident who earns salaries/wages in one location and declares PIT themself shall submit PIT finalization dossier to the tax authority to which tax declarations are submitted during the year as prescribed in Point a Clause 8 Article 11 of Decree No. 126/2020/ND-CP. In case an individual earns salaries/wages in more than one location, including income on which PIT is declared directly and income on which PIT has been deducted by the income payer, the PIT finalization dossier shall be submitted to the tax authority of the location from which he/she earns the highest income. In case the highest income cannot be determined, the PIT finalization dossier shall be submitted to the supervisory tax authority of the salary payer or the area where the individual resides.

- In case a resident earning salaries/wages from more than one source on which PIT has been withheld (or deducted) at source by salary payers:

+ The PIT finalization dossier shall be submitted to the supervisory tax authority of the salary payer where his/her personal exemption is claimed. In case his/her workplace is changed and his/her personal exemption is claimed at the last salary payer, the PIT finalization dossier shall be submitted to the supervisory tax authority of such salary payer. In case his/her workplace is changed but his/her personal exemption is not claimed at the last salary payer, the PIT finalization dossier shall be submitted to the supervisory tax authority of the area where he/she resides. In case his/her personal exemption has not been claimed at any salary payer, the PIT finalization dossier shall be submitted to the supervisory tax authority of the area where he/she resides.

+ In case a resident does not have an employment contract or has an employment contract with duration of less than 03 months or has a service contract and earns income at one location or more from which 10% PIT has been deducted, the PIT finalization dossier shall be submitted to the tax authority of the area where he/she resides.

+ In case a resident earns salaries/wages at one location or more but is not working for any salary payer when the PIT finalization dossier is being prepared, the PIT finalization dossier shall be submitted to the tax authority of the area where he/she resides.

- In case a resident salary earner who has to finalize PIT directly with the tax authority applies for PIT reduction due to natural disaster, conflagration, accident, or fatal disease, the PIT finalization dossier shall be submitted to the tax authority to which his/her application for PIT reduction has been submitted. The tax authority that has processed the application of PIT reduction shall take charge of processing the PIT finalization dossier.

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Thus, the authorities receiving PIT finalization dossiers in Vietnam are specifically defined.

What is the deadline for submission of PIT finalization dossiers for 2024 in Vietnam?

Based on point a and point b, clause 2, Article 44 of the Law on Tax Administration 2019 as follows:

2. For taxes declared annually:

a) For annual tax statement dossiers: the last day of the 3rd month from the end of the calendar year or fiscal year. For annual tax declaration dossiers: the last day of the first month from the end of the calendar year or fiscal year

b) For annual PIT statements prepared by income earners: the last day of the 4th month from the end of the calendar year;

c) For presumptive tax declarations prepared by household businesses and individual businesses: the 15th of December of the preceding year. For new household businesses and individual businesses: within 10 days from the date of commencement of the business.

The deadline for submission of PIT finalization dossiers for 2024 is determined as follows:

- For income payers: no later than March 31, 2024.

- For individuals directly finalizing taxes: April 30, 2024.