Are professional servicemen required to pay personal income tax on rewards in Vietnam?

Are professional servicemen required to pay personal income tax on rewards in Vietnam?

Based on Clause 3, Article 2 of Joint Circular 212/2013/TTLT-BTC-BQP, it is stipulated that professional servicemen are not required to pay personal income tax on rewards in the following cases:

- Monetary rewards accompanying titles conferred by the State, including rewards accompanying emulation titles and commendation forms as stipulated by the law on emulation and commendation, specifically:

+ Monetary rewards accompanying emulation titles such as National Emulation Soldier; Emulation Soldier of Ministry, sector, central mass organization, province, and city directly under the central management; Basic Emulation Soldier, Advanced Worker, Advanced Soldier.

+ Monetary rewards accompanying commendation forms.

+ Monetary rewards accompanying titles conferred by the State.

- Monetary rewards accompanying prizes granted by Associations or organizations belonging to political organizations, political-social organizations, social organizations, social-professional organizations at the central and local levels, in accordance with the charter of those organizations and compliance with the Law on Emulation and Commendation.

+ Monetary rewards accompanying the Ho Chi Minh Prize, State Prize.

+ Monetary rewards accompanying Commemorative Medals, Badges.

+ Monetary rewards accompanying Certificates of Merit, Letters of Commendation.

The authority to issue commendation decisions and the amount of money accompanying the emulation titles and commendation forms mentioned above must comply with the provisions of the Law on Emulation and Commendation.

- Monetary rewards accompanying national awards and international prizes recognized by the Vietnamese State.

- Monetary rewards regarding technical innovations, patents, and inventions recognized by competent state agencies.

- Monetary rewards for the discovery and reporting of law violations to competent state agencies.

- Monetary rewards for achievements in crime prevention and control, protection of national security; monetary rewards for achievements in scientific research serving national security protection, in the emulation movements for national security, and in the movement for the people's security.

If monetary or non-monetary rewards, in any other form, they will be subject to personal income tax.

Are professional servicemen required to pay personal income tax on rewards in Vietnam? (Image from the Internet)

How to calculate personal income tax for professional servicemen in Vietnam?

Based on Article 3 of Joint Circular 212/2013/TTLT-BTC-BQP, the calculation of personal income tax for professional servicemen is stipulated as follows:

Basis for Tax Calculation

The basis for calculating tax on income from salary, wages, and other income of a salaried nature is taxable income and the tax rate.

1. Taxable income is determined by taxable income minus the following deductions:

a) Mandatory insurance contributions such as Social Insurance, Health Insurance, Unemployment Insurance, Professional Liability Insurance for certain sectors and professions required to participate in mandatory insurance, and other mandatory insurance as prescribed by law.

b) Family deductions.

c) Contributions to charity funds, humanitarian funds, and study encouragement funds.

The method for determining the deductions mentioned in Clause 1 of this Article follows the guidelines in Article 9 of Circular 111/2013/TT-BTC dated August 15, 2013, of the Ministry of Finance.

2. Tax rate: The personal income tax rate for income from salary, wages is applied according to the progressive tax rate schedule as guided in Clause 2, Article 7 of Circular 111/2013/TT-BTC dated August 15, 2013, of the Ministry of Finance.

3. Tax Calculation Method.

The personal income tax payable from salary and wages is the total amount of tax calculated according to each income bracket, the tax amount per income bracket is the taxable income of that income bracket multiplied by (x) the corresponding tax rate of that income bracket.

Thus, the calculation of personal income tax for professional servicemen is conducted as follows: summing the tax calculated per income bracket, with the tax amount per income bracket being the taxable income of that income bracket multiplied by (x) the corresponding tax rate of that bracket.

How to pay professional servicemen personal income tax in Vietnam?

Based on Point c, Clause 1, Article 5 of Joint Circular 212/2013/TTLT-BTC-BQP, the payment of personal income tax for professional officers is stipulated as follows:

- Monthly, the income-paying organization must remit the withheld tax amount to the superior financial authority as prescribed.

- Quarterly, no later than the 30th of the first month of the subsequent quarter, the Finance Department - Ministry of Defense shall remit to the State Budget the personal income tax collected from income-paying organizations.

- Annually, no later than June 30 of the following year, based on the final settlement of income-paying organizations, the Finance Department - Ministry of Defense is responsible for determining the total personal income tax payable, the amount already paid, and remitting the remaining payable amount into the State Budget.