Are wedding gifts from the company subject to personal income tax in Vietnam?

Are wedding gifts from the company subject to personal income tax in Vietnam?

According to subparagraph g.10, point g, clause 2, Article 2 of Circular 111/2013/TT-BTC (as supplemented by clause 5, Article 11 of Circular 92/2015/TT-BTC), the following is specified:

Taxable Income

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2. Income from wages and salaries

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g) The following items are not included in taxable income:

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g.10) The amounts received from organizations or individuals paying income for the purposes of mourning or celebrating weddings for the employees and their families, in accordance with the general regulations of the income-paying organization or individual, and deemed consistent with the level of deductible expenses for corporate income tax as guided by the implementation documents of the corporate income tax law.

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Additionally, according to point 2.30, clause 2, Article 6 of Circular 78/2014/TT-BTC (amended and supplemented by Article 4 of Circular 96/2015/TT-BTC and clause 4, Article 3 of Circular 25/2018/TT-BTC), the expenses not deductible when determining taxable income include expenses not corresponding with revenue taxable under corporate income tax, except for the following:

Deductible and Non-deductible Expenses when Determining Taxable Income

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2. Non-deductible expenses when determining taxable income include:

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2.30. Expenses not corresponding with taxable revenue, except the following:

Welfare expenses directly benefiting employees such as: expenses for personal and family events (weddings, funerals) of the employee; vacation expenses; medical treatment support; educational enhancement support at training institutions; support for employee families affected by disasters, invasions, accidents, illness; rewarding employees' children with good academic performance; travel support for holidays and festivals for employees; accident insurance, health insurance, other voluntary insurances (excluding life insurance and voluntary retirement insurance for employees as guided at point 2.11 of this Article) and other welfare expenses. The total welfare expenses as mentioned above do not exceed one month's actual average salary performed in the tax year of the enterprise.

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As such, the wedding gift received by an employee from the company in accordance with the company's general rules and not exceeding one month's actual average salary performed in the tax year does not require personal income tax payment.

Are wedding gifts from the company subject to personal income tax in Vietnam? (Image from the Internet)

Which allowances are exempt from personal income tax in Vietnam?

According to point b, clause 2, Article 2 of Circular 111/2013/TT-BTC (amended by clause 1, Article 11 of Circular 92/2015/TT-BTC), the allowances and benefits exempt from personal income tax include:

- Monthly incentives and one-time allowances in accordance with policies for individuals with meritorious services.

- Monthly benefits, one-time benefits for individuals participating in resistance wars, national defense, international missions, and completing assignments in youth volunteering.

- National defense and security allowances; allowances for the armed forces.

- Allowances for hazardous, dangerous work for industries or jobs in harmful, dangerous environments.

- Attraction allowances, regional allowances.

- Sudden hardship allowances, work accident, and occupational disease allowances.

- One-time allowance upon childbirth or adoption, maternity policies, health recovery after maternity.

- Allowance for reduced working capacity, one-time retirement benefit, monthly survivorship benefit, severance allowance, unemployment allowance, and other allowances as per the Labor Code 2019 and Social Insurance Law 2014.

- Allowances for individuals receiving social protection as per law.

- Service allowance for senior leaders.

- One-time allowance for an individual when transferring work to areas with especially difficult socio-economic conditions, or one-time support for officials working on maritime sovereignty as per law.

- One-time relocation allowance for foreigners residing in Vietnam, Vietnamese working abroad, or Vietnamese residing long-term abroad returning to work in Vietnam.

- Allowance for rural or mountainous health staff.

- Specific industry allowances.

Who is personal income taxpayer in Vietnam?

According to Article 2 of the Personal Income Tax Law 2007, taxpayers are specified as follows:

(1) Personal income tax payers are resident individuals with taxable income as stated in Article 3 of this Personal Income Tax Law 2007 arising inside and outside Vietnam, and non-resident individuals with taxable income as stated in Article 3 of this Law arising in Vietnam.

(2) A resident individual is a person who meets one of the following conditions:

- Present in Vietnam for 183 days or more in a calendar year or for 12 consecutive months from the first day present in Vietnam;

- Having a regular place of residence in Vietnam, including a registered permanent residence or a rented house for staying in Vietnam under a lease contract.

(3) A non-resident individual is a person who does not meet the conditions specified in (2).