Is an individual required to pay personal income tax on gifts of home appliances from businesses in Vietnam?

Which are cases where incomes from gift are not subject to personal income tax in Vietnam?

Based on Clause 10, Article 3 of the Law on Personal Income Tax 2007, the provisions for taxable income from gifts are as follows:

Taxable Income

Taxable personal income includes the following types of income, except for tax-exempt income as stipulated in Article 4 of this Law:

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10. Income from gifts that are securities, capital in economic organizations, business establishments, real estate, and other assets that require ownership registration or usage registration.

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Additionally, according to Point d, Clause 1, Article 3 of Circular 111/2013/TT-BTC, tax-exempt income from real estate gifts is stipulated as follows:

Tax-Exempt Income

1. Pursuant to Article 4 of the Law on Personal Income Tax and Article 4 of Decree No. 65/2013/ND-CP, tax-exempt income includes:

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d) Income from receiving inheritance, gifts as real estate (including residential houses, construction works formed in the future according to the real estate business law) between: spouses; biological parents with biological children; adoptive parents with adopted children; parents-in-law with daughters-in-law; parents-in-law with sons-in-law; grandparents with grandchildren; siblings with each other.

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Thus, income from gifts will not be subject to personal income tax in the following cases:

- Income from gifts that are assets not required to register ownership or usage.

- Income from gifts as real estate (including residential houses or construction works formed in the future as per the real estate business law) between: spouses; biological parents with biological children; adoptive parents with adopted children; parents-in-law with daughters-in-law; parents-in-law with sons-in-law; grandparents with grandchildren; siblings with each other.

Is an individual required to pay personal income tax on gifts of home appliances from businesses in Vietnam?

Based on Clause 10, Article 3 of the Law on Personal Income Tax 2007, which regulates taxable income from gifts.

Simultaneously, referring to the provisions in Clause 10, Article 2 of Circular 111/2013/TT-BTC, specifically on taxable income from gifts as follows:

Taxable Income

Pursuant to Article 3 of the Law on Personal Income Tax and Article 3 of Decree No. 65/2013/ND-CP, taxable personal income includes:

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10. Income from receiving gifts

Income from receiving gifts is the income that an individual receives from organizations or individuals within and outside the country. To be specific:

a) For receiving gifts that are securities, including: stocks, stock purchase rights, bonds, treasury bills, fund certificates, and other securities as regulated by the Securities Law; shares of individuals in joint-stock companies according to the Enterprise Law.

b) For receiving gifts that are capital holdings in economic organizations or business establishments, including: capital in limited liability companies, cooperatives, partnerships, business cooperation contracts, capital in private enterprises, personal business establishments, capital in associations, and legally established funds or entire business establishments if they are private enterprises or personal business establishments.

c) For receiving gifts that are real estate, including: land use rights; land use rights with assets attached to land; property ownership rights, including future residential houses; infrastructure and construction works attached to land, including future construction works; land lease rights; water surface lease rights; other income received from real estate inheritance of any form, except income from gifts as real estate as outlined in point d, clause 1, Article 3 of this Circular.

d) For receiving gifts that are other assets requiring ownership or usage rights registration with state management agencies, such as: automobiles; motorcycles, motorbikes; watercraft, including barges, canoes, tugboats, push boats; boats, including yachts; aircraft; hunting guns, sports guns.

Therefore, home appliances are not considered assets requiring registration of ownership or usage rights with state management agencies. Consequently, individuals receiving gifts of home appliances from businesses will not be required to pay personal income tax.

Is an individual required to pay personal income tax on gifts of home appliances from businesses in Vietnam? (Image from the Internet)

Who are personal income taxpayers in Vietnam?

According to Article 2 of the Law on Personal Income Tax 2007, the subjects of tax obligations are defined as follows:

- Residents with taxable income arising within and outside the territory of Vietnam.

- Non-residents with taxable income arising within the territory of Vietnam.

Additionally, residents and non-residents are further defined as follows:

- A resident is an individual who satisfies one of the following conditions:

+ Present in Vietnam for 183 days or more within a calendar year or for 12 consecutive months from the first day of presence in Vietnam;

+ Having a regular residence in Vietnam, including having a registered permanent residence or a rented house in Vietnam according to a lease contract.

- A non-resident is an individual who does not meet the conditions specified in clause 2, Article 2 of the Law on Personal Income Tax 2007.