Is the 2025 Lunar New Year's Eve on the 29th or 30th day before Tet? Shall the 2025 Tet bonuses be exempted from personal income tax in Vietnam?

Is the 2025 Lunar New Year's Eve on the 29th or 30th day before Tet?

Calculation of the Lunar New Year:

The Lunar New Year, also known as Tet, is the most important holiday of the year for Vietnamese people. Tet begins on the 1st day of the first lunar month, which is the first day of the new year in the lunar calendar. However, due to differences between the lunar and solar calendars, the Lunar New Year falls on different solar calendar dates each year.

In the lunar calendar, the twelfth month (the last month of the year) may have either 29 or 30 days, depending on the year. A lunar year has 12 months, but approximately every 2-3 years, there is a leap year with an additional month (leap month) to adjust according to the moon cycle. This causes the twelfth month to sometimes have only 29 days, and it is not always complete with 30 days.

Lunar New Year 2025:

According to the lunar calendar, in 2025, the twelfth month has only 29 days. This means there will be no 30th day before Tet day in 2025, and therefore, New Year's Eve will be celebrated on the night of the 29th of Tet, which is the night of January 29, 2025.

Not only in 2025, but from 2025 to 2032, all twelfth lunar months will have only 29 days. This results in an 8-year consecutive cycle (from 2025 to 2032) where there will be no 30th lunar day. Vietnamese people will celebrate New Year's Eve on the night of the 29th day before Tet during this period instead of the traditional 30th day before Tet night.

The reason for not having a 30th day before Tet day in 2025 is that the twelfth month of that year has only 29 days. This is a characteristic of the lunar calendar, as not every year contains a full 30-day twelfth month. When the twelfth month has 29 days, New Year's Eve will occur on the night of the 29th day before Tet, contrary to the usual 30th day before Tet of previous years.

Lunar New Year's Eve 2025 will be celebrated on the 29th day before Tet, not the 30th day before Tet. This change is due to the twelfth month of 2025 having only 29 days, and it will extend from 2025 to 2032, during which there will be no 30th day of the twelfth month for 8 consecutive years.

Although this is a minor change in timing, for Vietnamese people, the Tet holiday and New Year's Eve always remain a time for family reunions, ancestor remembrance, and welcoming the new year. However, the absence of the 30th day before Tet day during this period will alter the habits of many, particularly in preparations for New Year's Eve.

In summary, Lunar New Year's Eve 2025 is on the 29th day before Tet, not the traditional 30th day before Tet.

Is the 2025 Lunar New Year's Eve on the 29th or 30th day before Tet? Shall the 2025 Tet bonuses be exempted from personal income tax in Vietnam? (Image from internet)

Shall the 2025 Tet bonuses be exempted from personal income tax in Vietnam?

Based on point e, clause 2, Article 2 of Circular 111/2013/TT-BTC, which specifically stipulates taxable income as follows:

Taxable income

...

2. Income from wages and salaries

Income from wages and salaries is the income received by employees from their employers, including:

...

e) Rewards in cash or non-cash under all forms, including stock bonuses, except for the following rewards:

e.1) Rewards accompanying titles conferred by the state, including rewards accompanying emulation titles, forms of commendation as regulated by the law on emulation and commendation, specifically:

e.1.1) Rewards accompanying emulation titles such as National Emulation Soldier; Emulation Soldier at the ministry, sector, central union, provincial, city levels under central authority; grassroots Emulation Soldier, Advanced Laborer, Advanced Soldier.

e.1.2) Rewards accompanying forms of commendation.

e.1.3) Rewards accompanying titles conferred by the state.

e.1.4) Rewards accompanying prizes awarded by associations, organizations of political organizations, political-social organizations, social organizations, social-professional organizations of central and local levels conforming to their charters and in accordance with the law on Emulation and Commendation.

e.1.5) Rewards accompanying the Ho Chi Minh Prize, State Prize.

e.1.6) Rewards accompanying medals, badges.

e.1.7) Rewards accompanying certificates of merit, commendation certificates.

The authority to issue commendation decisions, reward levels accompanying emulation titles, forms of commendation mentioned above must comply with the regulations of the Emulation and Commendation Law.

e.2) Rewards accompanying national, international prizes recognized by the Vietnamese state.

e.3) Rewards for technical improvements, inventions, inventions recognized by the competent state agencies.

e.4) Rewards for detecting and reporting violations of law to competent state agencies.

...

Accordingly, under the above regulation, a Tet bonus is considered taxable income that an employer pays to employees based on the results of product or business operations during the holiday season. As a result, under the above regulation, this bonus is not exempt from tax and is still subject to Personal Income Tax (PIT).

What types of income are exempt from personal income tax in Vietnam?

According to Article 4 of the Personal Income Tax Law 2007, supplemented by clause 3, Article 2 of the Law amending various tax laws 2014, and amended by Clause 2, Article 1 of the amended Personal Income Tax Law 2012, the following personal income is exempt from personal income tax:

- Income from real estate transfers between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings.

- Income from the transfer of residential houses, homestead land use rights, and properties attached to homestead land by individuals in cases where the individual only has one residential house or homestead land.

- Income from the value of land use rights allocated by the state to individuals.

- Income from inheritance, gifts which are real estate between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings.

- Income of households and individuals directly engaged in agricultural, forestry, salt production, aquaculture, fishery exploitation that hasn't been through processing into other products or only through simple processing.

- Income from the conversion of agricultural land allocated by the state to households and individuals for production.

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

- Income from remittances.

- Overtime wages paid higher than daytime working wages according to legal regulations.

- Pensions paid by the Social Insurance Fund; pensions paid monthly by voluntary pension funds.

- Income from scholarships, including:

+ Scholarships from the state budget;

+ Scholarships from domestic, foreign organizations as part of their education promotion program.

- Income from compensation of life and non-life insurance contracts, compensation for occupational accidents, state compensation, and other compensations as prescribed by law.

- Income received from a charitable fund permitted to be established or recognized by competent state agencies, operating for charitable, humanitarian, non-profit purposes.

- Income received from foreign aid for charitable, humanitarian purposes under governmental and non-governmental forms approved by competent state agencies.

- Income from wages and salaries of Vietnamese seamen working for foreign shipping companies or Vietnamese shipping companies engaged in international transport.

- Income of individuals who are ship owners, individuals who have the right to use the ship, and individuals working on the ship from providing goods, services directly serving offshore fishing activities.