Is the allowance for labor accidents subject to personal income tax in Vietnam?

Is the allowance for labor accidents subject to personal income tax in Vietnam?

Based on Article 2 of Circular 111/2013/TT-BTC, the regulation on taxable income is as follows:

Taxable incomes

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

1. Income from business activities

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

a) Income from production, business of goods, and services, in all fields and industries as stipulated by law such as: production, business of goods; construction; transportation; food and beverage business; service business, including house rental services, land use rights, water surface, and other assets.

b) Income from independent professional activities of individuals in fields and industries with licenses or practicing certificates as required by law.

c) Income from agricultural, forestry production, salt production, aquaculture, fishing which do not meet the tax exemption conditions as guided in point e, clause 1, Article 3 of this Circular.

2. Income from wages, salaries

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

a) Wages, salaries, and other forms of remuneration in cash or non-cash forms.

b) Allowances and subsidies, except for the following allowances and subsidies:

b.1) Monthly preferential allowances and one-time allowances as stipulated by the law for people with meritorious services.

b.2) Monthly allowances, one-time allowances for individuals participating in resistance wars, national defense, international duties, young volunteers who completed missions.

b.3) National defense and security allowances; allowances for armed forces.

b.4) Hazard and dangerous allowances for sectors, occupations, or jobs in workplaces with hazardous and dangerous factors.

b.5) Attraction allowances, regional allowances.

b.6) Unexpected hardship allowances, workplace accident allowances, occupational disease allowances, one-time allowances for childbirth or adoption, maternity benefits, convalescence, and recovery health benefits after maternity, allowances for labor capacity reduction, one-time retirement allowances, monthly pensions, redundancy allowances, job loss allowances, unemployment allowances, and other allowances according to the Labor Code and Social Insurance Law.

b.7) Allowances for individuals receiving social protection according to the law.

b.8) Service allowances for high-level leaders.

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the workplace accident allowance is not subject to personal income tax.

Is the allowance for labor accidents subject to personal income tax in Vietnam? (Image from the Internet)

Which entities are personal income tax payers in Vietnam?

According to Article 2 of The 2007 Personal Income Tax Law, it is stipulated as follows:

Taxpayers

1. Taxpayers of personal income tax are resident individuals with taxable income as stipulated in Article 3 of this Law arising within and outside the territory of Vietnam, and non-resident individuals with taxable income as stipulated in Article 3 of this Law arising within the territory of Vietnam.

2. A resident individual is one who meets one of the following conditions:

a) Being present in Vietnam for 183 days or more in a calendar year or for 12 consecutive months from the first day of presence in Vietnam;

b) Having a regular place of residence in Vietnam, including a registered place of permanent residence or a rented house to live in Vietnam under a term contract.

3. A non-resident individual is one who does not meet the conditions stipulated in clause 2 of this Article.

Thus, based on the above regulations, the taxpayers of personal income tax include the following:

- Personal income taxpayers are resident individuals with taxable income as stipulated in Article 3 of The 2007 Personal Income Tax Law arising within and outside the territory of Vietnam, and non-resident individuals with taxable income as stipulated in Article 3 of The 2007 Personal Income Tax Law arising within the territory of Vietnam.

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

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

+ Having a regular place of residence in Vietnam, including a registered place of permanent residence or a rented house to live in Vietnam under a term contract.

- A non-resident individual is one who does not meet the conditions stipulated as follows:

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

+ Having a regular place of residence in Vietnam, including a registered place of permanent residence or a rented house to live in Vietnam under a term contract.

When is the deadline of personal income tax payment in Vietnam?

According to Article 28 of Decree 65/2013/ND-CP, income-paying organizations will monthly calculate provisional income tax to be deducted based on income.

According to clause 1 Article 55 of The 2019 Tax Administration Law, it is stipulated as follows:

Tax Payment Deadlines

1. Where the taxpayer calculates the tax, the deadline for tax payment is the last day of the tax return filing period. In the case of additional tax returns, the tax payment deadline is the deadline for filing returns of the tax period with errors or omissions.

For corporate income tax, it must be provisionally paid quarterly, with the deadline for tax payment being the 30th of the first month of the next quarter.

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In addition, according to clause 2 Article 44 of The 2019 Tax Administration Law, the deadlines for annual tax finalization returns are stipulated as follows:

Tax Return Filing Deadlines

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2. The deadlines for tax return filing for annual tax periods are as follows:

a) No later than the last day of the third month from the end of the calendar year or fiscal year for annual tax finalization returns; no later than the last day of the first month of the calendar year or fiscal year for annual tax returns;

b) No later than the last day of the fourth month from the end of the calendar year for personal income tax finalization returns directly finalized by individuals;

c) No later than December 15th of the previous year for tax return filings according to presumptive tax of household businesses, individual businesses; in case of new businesses, no later than 10 days from the start of business.

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Thus, the deadlines for personal income tax finalization returns are as follows:

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

- No later than the last day of the fourth month from the end of the calendar year for personal income tax finalization returns directly finalized by individuals.