How much infrequent income is subject to personal income tax in Vietnam?

What is infrequent income in Vietnam?

Currently, neither the general law nor tax law specifically defines what infrequent income is. However, in common understanding, this is income arising from salaries and wages that does not occur regularly, is random in nature, and is unstable. These incomes are often not associated with an individual's official job or main income source.

Additionally, based on point c, clause 2, Article 2 of Circular 111/2013/TT-BTC, infrequent income can include remunerations received in forms such as:

+ Commission for goods sale agency, brokerage commission;

+ Fees for participating in scientific and technical research projects;

+ Fees for participating in projects, schemes;

+ Royalties as stipulated by law on royalties; fees for participating in teaching activities;

+ Fees for participating in cultural, artistic, physical, and sports performances; advertising services fees;

+ Other service fees, other remunerations.

How much infrequent income is subject to personal income tax in Vietnam? (Image from the Internet)

How much infrequent income is subject to personal income tax in Vietnam?

Based on point i, clause 1, Article 25 of Circular 111/2013/TT-BTC stipulates:

Tax Deduction and Tax Deduction Certificate

1. Tax Deduction

...

i) Tax deduction for certain other cases

Organizations and individuals that pay salaries, wages, and other payments to resident individuals without labor contracts (as instructed at points c and d, clause 2, Article 2 of this Circular) or with labor contracts of less than three (03) months must deduct tax at a rate of 10% on the income before payment if the total payment is from two million (2,000,000) VND/time or more.

In cases where the individual has only the income subject to a deducted tax rate as mentioned but estimates that their total taxable income, after personal exemptions, does not reach the taxable threshold, the individual must make a commitment (according to the form issued with the document guiding tax management) to the income-paying organization to temporarily not deduct personal income tax.

Based on the recipient's commitment, the income-paying organization shall not deduct tax. At the end of the tax year, the income-paying organization must still compile a list and income of individuals not reaching the tax deduction threshold (into the form issued with the document guiding tax management) and submit it to the tax authorities. Individuals making commitments must take responsibility for their declarations, and fraudulent cases will be handled according to the Law on Tax Administration.

Individuals making a commitment as guided in this point must have taxpayer registration and a tax code at the time of commitment.

...

According to these regulations, individuals receiving infrequent income from two million (2,000,000) VND/time or more must have the income payer deduct tax at a rate of 10% on the income before payment to the individual.

Conversely, for infrequent income below 2 million VND, the individual will not be subject to tax assessment and deduction.

Except in cases where the individual has only the income subject to deduction as mentioned but estimates that their total taxable income, after personal exemptions, is below the taxable threshold, the individual must make a commitment (according to the form issued with the document guiding tax management) to the income-paying organization to temporarily not deduct personal income tax. Provided that:

- The individual has taxpayer registration and a tax code.

- The individual is responsible for the content of the commitment.

Based on the recipient's commitment, the income-paying organization does not deduct tax. At the end of the tax year, the income-paying organization must still compile a list and income of individuals not reaching the tax deduction threshold (into the form issued with the document guiding tax management) and submit it to the tax authorities.

>> Download the form 08/CK-TNCN for the declaration of no personal income tax liability

What is the current personal exemption level in Vietnam?

According to Article 1 of Resolution 954/2020/UBTVQH14 stipulating the personal exemption level as follows:

Personal exemption level

Adjusting the personal exemption level stipulated in clause 1, Article 19 of the Law on Personal Income Tax No. 04/2007/QH12, as amended and supplemented by Law No. 26/2012/QH13, as follows:

1. The deduction level for taxpayers is 11 million VND/month (132 million VND/year);

2. The deduction level for each dependent is 4.4 million VND/month.

- Deduction level for taxpayers is 11 million VND/month (132 million VND/year);

- Deduction level for each dependent is 4.4 million VND/month.