Is income from prizes of entertainment programs subject to personal income tax in Vietnam?

Is income from prizes of entertainment programs subject to personal income tax in Vietnam?

Pursuant to Article 1 of Circular 111/2013/TT-BTC as amended by Article 2 of Circular 119/2014/TT-BTC stipulating taxpayers as follows:

Taxpayer

A taxpayer is a resident individual and non-resident individual as defined in Article 2 Personal Income Tax Law, Article 2 of Decree No. 65/2013/ND-CP dated June 27, 2013, of the Government of Vietnam stipulating detailed regulations for several articles of the Personal Income Tax Law and the Law amending and supplementing several articles of the Personal Income Tax Law (hereinafter referred to as Decree No. 65/2013/ND-CP), having taxable income as defined in Article 3 of the Personal Income Tax Law and Article 3 of Decree No. 65/2013/ND-CP.

The scope of determining taxable income for taxpayers is as follows:

For resident individuals, taxable income is the income generated both within and outside Vietnam, regardless of where the income is paid;

For individuals who are citizens of countries or territories that have signed an agreement with Vietnam on avoiding double taxation and preventing tax evasion regarding taxes on income and are resident in Vietnam, the personal income tax obligation is calculated from the month of arrival in Vietnam in case the individual is present in Vietnam for the first time until the month the labor contract ends and leaving Vietnam (calculated fully by month); they are not required to carry out consular certification procedures to be exempted from double taxation under the double taxation avoidance agreement between the two countries.

For non-resident individuals, taxable income is the income generated in Vietnam, regardless of the place where the income is paid and received.

1. A resident individual is a person who meets one of the following conditions:

a) Present in Vietnam for 183 days or more within a calendar year or 12 consecutive months from the first day of presence in Vietnam, where days of arrival and departure are counted as one (01) day. The days of arrival and departure are based on the certification of the immigration management agency on the passport (or laissez-passer) of the individual upon entering and leaving Vietnam. If entry and exit occur on the same day, it is counted as one day of residence.

The presence of the individual in Vietnam as guided in this point refers to the individual's presence on the territory of Vietnam.

b) Having a permanent place of residence in Vietnam under one of the following cases:

b.1) Having a permanent place of residence as stipulated by the law on residence:

b.1.1) For Vietnamese citizens: a permanent place of residence is the place where the individual lives regularly and stably indefinitely at a certain dwelling and has registered permanent residence in accordance with the law on residence.

b.1.2) For foreigners: a permanent place of residence is the place of permanent residence recorded in the Permanent Residence Card or the place of temporary residence upon registering for the issuance of the Temporary Residence Card issued by the competent authority of the Ministry of Public Security.

b.2) Having a rented house in Vietnam in accordance with the law on housing, with the rental period of contracts from 183 days or more in the tax year. To be specific:

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According to Article 2 of Circular 111/2013/TT-BTC, amended by Clause 7 Article 25 of Circular 92/2015/TT-BTC, the taxable income is stipulated as follows:

Taxable Income Items

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

1. Income from business

Income from business is the income derived from production and business activities in the following fields:

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6. Income from winnings

Income from winnings includes cash or in-kind rewards that individuals receive from the following forms:

a) Lottery prizes paid by lottery companies.

b) Winning from promotions when participating in purchasing goods and services as stipulated by the Commercial Law.

c) Winning from betting and gambling activities as permitted by law.

d) Winning in games, contests with prizes, and other forms of winnings organized by economic organizations, administrative agencies, socio-professional organizations, and other organizations or individuals.

7. Income from royalties

Thus, income from prizes of entertainment programs is also taxable income, therefore, if you win a prize, you must also pay personal income tax.

Is income from prizes of entertainment programs subject to personal income tax in Vietnam? (Image from the Internet)

What is the deadline for paying personal income tax in Vietnam?

According to the provisions of Article 28 of Decree 65/2013/ND-CP, income-paying organizations shall temporarily calculate the deductible tax amount based on taxable income on a monthly basis.

Pursuant to Clause 1, Article 55 of the Tax Administration Law 2019, it is stipulated as follows:

Deadline for Tax Payment

1. In case the taxpayer calculates the tax, the tax payment deadline is no later than the last day of the tax filing deadline. In case of additional tax filing, the tax payment deadline is the tax filing deadline of the tax period with errors or omissions.

For corporate income tax, temporary payment is made quarterly, with the tax payment deadline being no later than the 30th of the first month of the next quarter.

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Additionally, according to Clause 2, Article 44 of the Tax Administration Law 2019, the tax finalization declaration deadline for personal income tax is regulated as follows:

Tax Filing Deadline

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2. The deadline for filing tax returns for taxes calculated annually is stipulated as follows:

a) No later than the last day of the 3rd month from the end of the calendar year or fiscal year for annual tax return finalization; no later than the last day of the 1st month of the calendar year or fiscal year for annual tax return filing;

b) No later than the last day of the 4th month from the end of the calendar year for individual personal income tax finalization filing directly by the taxpayer;

c) No later than December 15 of the previous year for household business tax returns, individual business tax returns submitted under the declaration method; in case a household business or individual business starts a new business, the tax return filing deadline is no later than 10 days from the start of the business.

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Thus, the personal income tax finalization filing deadline is divided into 2 timelines for the following 2 cases:

- No later than the last day of the 3rd month from the end of the calendar year or fiscal year for the tax return finalization filed by enterprises on behalf of employees.

- No later than the last day of the 4th month from the end of the calendar year for personal income tax finalization filing directly by individuals.

How to calculate the late payment interest for 1 day of personal income tax in Vietnam?

Pursuant to Clause 2, Article 59 of the Tax Administration Law 2019 as stipulated:

Handling for Late Payment of Taxes

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2. The calculation of late payment interests and the period for calculating late payment interests are stipulated as follows:

a) The late payment interest is calculated at a rate of 0.03%/day on the late tax payment amount;

b) The period for calculating late payment interests is calculated continuously from the day following the occurrence of the late payment as stipulated in Clause 1 of this Article until the day immediately preceding the day when the tax debt, tax refund recovery, additional tax payable, assessed tax, deferred tax transfer have been credited to the state budget.

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Thus, the late payment interest for 1 day of personal income tax is calculated using the formula:

late payment interest rate = 0.03% x Amount of late tax payment.