Is the allowance for phone calls subject to personal income tax in Vietnam?

Is the allowance for phone calls subject to personal income tax in Vietnam?

According to point d.4, clause 2, Article 2 of Circular 111/2013/TT-BTC stipulates:

Taxable Income

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

...

2. Income from salaries and wages

Income from salaries and wages refers to the income employees receive from employers, including:

...

d) Monetary or non-monetary benefits in addition to salaries and wages paid by the employer, which the taxpayer enjoys in any form:

...

d.4) Office supplies, travel expenses, telephone, attire, etc., allowances exceeding the current state regulations. The allowances are not taxable income in some cases as follows:

d.4.1) For officials and workers in administrative agencies, the Communist Party, unions, associations: the allowance is applied according to the guidelines of the Ministry of Finance.

d.4.2) For employees working in business organizations, representative offices: the allowance is applied in accordance with determining corporate income tax according to the guidelines implementing the Corporate Income Tax Law.

d.4.3) For employees working in international organizations, foreign organization's representative offices: the allowance is implemented according to the provisions of the international organization, the foreign organization's representative office.

....

Additionally, according to Official Dispatch 79557/CT-TTHT in 2018 on calculating personal income tax for employee allowances as follows:

If a company pays allowances for house rent, transportation (from home to company at a fixed monthly rate), telephone, attendance for employees, and specifies the conditions and rates in one of the following documents: Labor contract; Collective labor agreement; Financial regulations of the company, corporation, group; Bonus regulations set by the Chairman of the Board, General Director, Director according to the company's financial regulations, corporation, then:

- Regarding the allowance for phone calls: the fixed expense for individual telephone is deductible when determining corporate income tax according to the Corporate Income Tax Law, it can be deducted when determining personal taxable income.

In case the company pays more telephone expenses for employees than the stipulated allowance, the excess amount must be included in personal taxable income.

Thus, the allowance for phone calls will be deducted when calculating personal income tax for employees, if the expense exceeds the allowed amount, the excess will be included in personal taxable income.

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

Who are personal income taxpayers in Vietnam?

According to Article 2 of the Law on Personal Income Tax 2007, subjects required to pay personal income tax are specified. Specifically:

Taxpayers

1. Personal income taxpayers include resident individuals with taxable income as stipulated in Article 3 of this Law arising inside or 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 someone 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 residence in Vietnam, including a registered permanent residence or a rented house to live in Vietnam according to a lease agreement of term.

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

Thus, it can be seen that persons liable to pay personal income tax are resident individuals with taxable income, as defined, arising inside and outside the territory of Vietnam and non-resident individuals with taxable income.

What are the three methods for employees to submit personal income tax refund applications in Vietnam?

According to clause 2, Article 72 of the Law on Tax Administration 2019, the procedures are as follows:

Submission and response to tax refund dossiers

...

2. Taxpayers submit tax refund applications through the following methods:

a) Submit the application directly at the tax administration agency;

b) Send the application via postal service;

c) Send the application electronically via the electronic transaction portal of the tax administration agency.

3. Within 03 working days from the date of receipt of the tax refund application, the tax administration agency classifies the application and informs the taxpayer of the acceptance of the application and the deadline for resolving the tax refund dossier, or informs in writing in case the application is incomplete.

4. The Minister of Finance details this Article.

Thus, employees submit their personal income tax refund applications through the following three methods:

- Submit the application directly at the tax administration agency;

- Send the application via postal service;

- Send the application electronically via the electronic transaction portal of the tax administration agency.