How to calculate PIT on prize money for the Vietnam National Football Team?
Are the incomes from prize money for the Vietnam National Football Team subject to personal income tax in Vietnam?
Based on point e, clause 2, Article 2 of Circular 111/2013/TT-BTC which stipulates taxable personal income (PIT) as follows:
Taxable Income Items
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- Income from wages, salaries
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e) All forms of prize money, whether monetary or non-monetary, including stock prize money, except for the following prize money:
e.1) prize money accompanying titles awarded by the State, including prize money accompanying emulation titles and forms of commendation according to legislation on emulation and commendation, specifically:
e.1.1) prize money accompanying emulation titles such as National Emulation Fighter; Ministry, Central Agencies, Sector, Central Organizations, and City-level Emulation Fighters, grassroots-level Excellent Employee, Advanced Soldier.
e.1.2) prize money accompanying commendation forms.
e.1.3) prize money accompanying State-awarded titles.
e.1.4) prize money accompanying prizes awarded by associations, organizations under the political organizations, political-social organizations, social organizations, social-professional organizations of central and local levels, in compliance with the charter of the respective organizations and legislation on Emulation and Commendation.
e.1.5) prize money accompanying Ho Chi Minh prizes and State prizes.
e.1.6) prize money accompanying Memorial medals, Badges.
e.1.7) prize money accompanying Certificates of Merit, Diplomas of Merit.
The authority to issue commendation decisions and the bonus levels accompanying emulation titles and commendation forms must align with the Emulation and Commendation Law.
e.2) prize money accompanying national, international awards recognized by the Vietnamese Government.
e.3) prize money for technical innovations, inventions, and discoveries recognized by competent State agencies.
e.4) prize money for identifying and reporting legal violations to competent State agencies.
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Thus, for the Vietnam National Football Teams, when participating in major championships recognized by the State and receiving prizes accompanying titles or medals, these prize money are considered prize money accompanying medals or badges. Therefore, these incomes from prize money for the Vietnam National Football Team accompanying medals or badges are not subject to personal income tax.
Note: Besides the rewards from the tournament organizers, if the Vietnam National Football Team receives additional prize money (in cash or in-kind, in any form), these are considered taxable personal income. Players generating income from these prize money must declare and pay PIT as per legal regulations.
How to calculate PIT on prize money for the Vietnam National Football Team? (Image from the Internet)
How to calculate personal income tax on prize money for the Vietnam National Football Team?
According to Official Dispatch 1324/TCT-TNCN of 2018 from the General Department of Taxation guiding PIT on prize money for individuals and organizations for the U23 Vietnam football team, the calculation of PIT on prize money for the Vietnam National Football Team is as follows:
- Income from receiving gifts is regulated in Article 16 of Circular 111/2013/TT-BTC: taxable income from gifts is the value of the received gift exceeding 10 million VND each time, with a tax rate of 10% and tax declaration paid per income occurrence
Based on these regulations and the actual incomes from prize money for the Vietnam National Football Team, assess each type of income to determine the requirement for tax declaration and payment or exemption from PIT according to regulations. Specifically:
- In cases where individuals earn income from prize money awarded by the Asian Football Confederation (AFC), Vietnam Football Federation provided that conditions are met such as national awards, international awards recognized by the Vietnamese Government; prize money from the Vietnam Olympic Committee according to the Law on Emulation and Commendation 2022, these incomes are exempt from taxable income when calculating PIT.
- In cases where prize money from economic corporations, banks, enterprises, and organizations or individuals are awarded to the Vietnam National Football Team and individual players or coaches and are considered wages or salaries paid by employers to employees and/or made under the financial regulations on expenses, rewards of the Vietnam Football Federation, they are included in the taxable income of the individuals.
Depending on the employment contracts of the players, coaches, and team members, the Federation calculates, declares, and pays tax according to the progressive tax rate schedule or withholds tax as regulated in Article 25 of Circular 111/2013/TT-BTC. Personal tax finalization for team members is executed according to clause 3, Article 21 of Circular 92/2015/TT-BTC.
- In cases where individuals receive awards such as securities, ownership stakes in economic organizations, businesses, real estate, or other registered assets, the individual must pay PIT under clause 10, Article 2 of Circular 111/2013/TT-BTC and calculate, declare, and pay tax according to Article 16 of Circular 111/2013/TT-BTC.
What are regulations on the personal income tax period in Vietnam?
According to Article 7 of the Law on Personal Income Tax 2007, amended by clause 3, Article 1 of the Law on Amendments to Law on Personal Income Tax 2012, the PIT period is regulated as follows:
- The tax period for resident individuals is defined as follows:
+ Annual tax period applies to income from business; income from wages and salaries;
+ Each occurrence of income generation applies to income from capital investment; income from capital transfer except for income from securities transfer; income from real estate transfer; winnings; royalties; franchising; inheritance; gifts;
+ Each occurrence of transfer or annually applies to income from securities transfer
- The tax period for non-resident individuals is calculated per occurrence of income generation for all taxable income.
