Are lucky money receiving from employers subject to personal income tax in Vietnam?

Are lucky money receiving from employers subject to personal income tax in Vietnam?

According to Point e, Clause 2, Article 2 of Circular 111/2013/TT-BTC, it is stipulated:

Taxable Income

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2. Income from wages and salaries

Income from wages and salaries is the income employees receive from employers, including:

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e) Bonuses in cash or non-cash in any form, including bonuses in the form of stocks, except for the following bonuses:

e.1) Bonuses attached to honorary titles awarded by the State, including bonuses attached to emulation titles and forms of commendation stipulated by the law on emulation and commendation, specifically:

e.1.1) Bonuses attached to emulation titles such as National Emulation Soldier; Emulation Soldier at the Ministry, sector, central organizations, province, centrally-affiliated city; Basic Emulation Soldier, Advanced Laborer, Advanced Soldier.

e.1.2) Bonuses attached to forms of commendation.

e.1.3) Bonuses attached to titles granted by the State.

e.1.4) Bonuses attached to awards given by Associations and organizations affiliated with Political Organizations, Political-Social Organizations, Social Organizations, Social-Professional Organizations of the central and local levels in accordance with the organization's charter and consistent with the Law on Emulation and Commendation.

e.1.5) Bonuses associated with the Ho Chi Minh Prize, State Prize.

e.1.6) Bonuses associated with Medals and Badges.

e.1.7) Bonuses associated with Certificates of Merit.

Authority to decide on commendation and the amount of bonus accompanying the emulation titles and commendation forms mentioned above must comply with the Law on Emulation and Commendation.

e.2) Bonuses attached to national or international awards recognized by the Government of Vietnam.

e.3) Bonuses for technical innovations, inventions, and discoveries recognized by competent state agencies.

e.4) Bonuses for reporting and discovering legal violations to competent state agencies.

....

New Year's red envelope money from the company is considered a bonus but is not listed among the tax-exempt bonuses for personal income tax. Therefore, this red envelope money will be considered taxable personal income.

Are lucky money receiving from employers subject to personal income tax in Vietnam? (Image from the Internet)

What types of income are 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 and supplemented by Clause 3, Article 2 of the Amendment Law on Taxes 2014), it stipulates exempt personal incomes as follows:

- Income from real estate transfers between spouses; biological parents and biological 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 housing, land use rights, and assets attached to land in which the individual has only one house or land use right.

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

- Income from inheritance or gifts that are immovable properties between spouses; biological parents and biological 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 agricultural, forestry production, salt making, aquaculture, fishing unprocessed into other products or only through simple processing.

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

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

- Income from remittances.

- Wages paid for night work or overtime which is higher than the daytime or regular working wages as defined by law.

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

- Income from scholarships, including:

+ Scholarships received from the state budget;

+ Scholarships received from domestic and international organizations under the organization's scholarship support program.

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

- Income received from charity funds approved or recognized by competent state agencies, operating for charitable, humanitarian, and non-profit purposes.

- Income received from foreign aid for charity and humanitarian purposes in the form of government and non-governmental support approved by competent state agencies.

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

- Income of individuals who own ships, individuals who have the right to use ships and individuals working on ships from providing goods and services directly serving offshore fishing and catching activities.

What are regulations on PIT period in Vietnam?

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

- The assessment period for resident individuals is regulated as follows:

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

+ The assessment period for each income-generating occurrence applies to income from capital investment; income from capital transfer, except for income from stock transfer; income from real estate transfer; income from winnings; income from royalties; income from franchising; income from inheritance; income from gifts;

+ The assessment period applies per each transfer or annually for income from stock transfer.

- The assessment period for non-resident individuals is determined for each income-generating occurrence and applies to all taxable income.