Is income from foreign exchange remittances subject to personal income tax in Vietnam?

Is income from foreign exchange remittances subject to personal income tax in Vietnam?

Pursuant to Clause 8, Article 4 of the Law on Personal Income Tax 2007, the regulation on tax-exempt income is as follows:

Exempt Income

...

5. Income of households and individuals directly engaged in agricultural production, forestry, salt-making, aquaculture, and fishing not processed into other products or only through ordinary preliminary treatment.

6. Income from the transfer of agricultural land allocated to households and individuals by the State for production.

7. Income from interest on deposits at credit institutions, interest from life insurance contracts.

8. Income from foreign exchange remittances.

9. The portion of wages for night work and overtime that is higher than the daytime wage and legal working hours according to the law.

...

Simultaneously, as per Clause 2, Article 12 of Circular 92/2015/TT-BTC, detailed guidance on income from foreign exchange remittances is provided as follows:

- Income from foreign exchange remittances exempt from tax is the amount received by individuals from abroad sent by Vietnamese nationals residing overseas, Vietnamese individuals working, studying, or conducting business overseas, sent to their relatives in the country;

- In cases where individuals receive money from abroad sent by foreign nationals, if it meets the conditions to encourage foreign exchange remittances into the country as stipulated by the State Bank of Vietnam, it is also tax-exempt under this provision.

- The basis for determining the tax-exempt income in this clause is the documentation proving the source of money received from abroad and payment receipts from payment organizations (if any).

From the above provisions, it can be concluded that income from foreign exchange remittances is exempt from personal income tax.

Is income from foreign exchange remittances subject to personal income tax in Vietnam? (Image from the Internet)

What income from wages and salaries is subject to personal income tax in Vietnam?

According to Clause 2, Article 3 of the Law on Personal Income Tax 2007, amended and supplemented by Clause 1, Article 1 of the Law Amending and Supplementing Several Articles of the Law on Personal Income Tax 2012, the regulation on income from wages and salaries includes the following incomes:

- Salaries, wages, and amounts of similar nature;

- Allowances and subsidies, excluding:

+ Allowances and subsidies as prescribed by the law on incentives for people with merits; national defense and security allowances;

+ Hazard and danger allowances for industries or jobs with harmful or dangerous elements; attracting allowances, regional allowances according to regulations;

+ Sudden difficulty allowances, accident or occupational sickness allowances, one-time allowance for childbirth or adoption, allowances due to a reduction in working capacity, one-time retirement allowances, monthly survivor benefits, and other allowances according to social insurance law;

+ Severance allowances, unemployment allowances as prescribed by the Labor Code; social security nature allowances and other non-wage nature subsidies.

- Remuneration under different forms;

- Income received from participation in business associations, boards of directors, supervisory boards, management boards, and organizations;

- Other benefits in cash or non-cash received by the taxpayer;

- Bonuses, except for bonuses associated with titles awarded by the State, bonuses accompanied by national or international awards, bonuses for technical improvements, inventions, patents recognized by competent state agencies, bonuses for detecting and reporting violations to competent state agencies.

When is 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 Amending and Supplementing Several Articles of the Law on Personal Income Tax 2012, the tax declaration periods are defined as follows:

- For resident individuals, the declaration period is stipulated as follows:

+ The annual declaration period applies to income from business and income from wages and salaries;

+ The declaration period per income occurrence applies to income from capital investment; income from capital transfer, except income from securities transfer; income from real estate transfer; income from winnings; income from copyrights; income from franchising; inheritance; gifts;

+ The declaration period per transfer or annually for income from securities transfer.

- For non-resident individuals, the declaration period is calculated per income occurrence for all taxable income.