Is the income from prize of Miss International 2024 subject to personal income tax in Vietnam?

Is the income from prize of Miss International 2024 subject to personal income tax in Vietnam?

Based on Article 1 of Circular 111/2013/TT-BTC, amended by Article 2 of Circular 119/2014/TT-BTC on taxpayers, the following is stated:

Taxpayers

Taxpayers are residents and non-residents as prescribed in Article 2 of the Law on Personal Income Tax and Article 2 of Decree No. 65/2013/ND-CP dated June 27, 2013, of the Government of Vietnam, detailing certain articles of the Law on Personal Income Tax and the Law amending and supplementing certain articles of the Law on Personal Income Tax (hereinafter referred to as Decree No. 65/2013/ND-CP), with taxable income as regulated in Article 3 of the Law on Personal Income Tax and Article 3 of Decree No. 65/2013/ND-CP.

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

For residents, taxable income includes income generated within and outside the territory of Vietnam, regardless of the place of payment and receipt of income.

For non-residents, taxable income includes income generated in Vietnam, regardless of the place of payment and receipt of income.

1. A resident is an individual meeting one of the following conditions:

a) Being present in Vietnam for 183 days or more within a calendar year or 12 consecutive months from the first day of presence in Vietnam, with the day of arrival and departure counting as one (01) day. The day of arrival and departure is based on the certification of the immigration management agency on the individual's passport (or laissez-passer) upon arrival and departure from Vietnam. In case of entering and exiting on the same day, it is counted as one day of residence.

An individual being present in Vietnam as instructed at this point is the presence of that individual on the territory of Vietnam.

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

b.1) Having a regular place of residence as prescribed by the law on residence:

b.1.1) For Vietnamese citizens: the regular residence is the place where the individual lives regularly, stably, indefinitely at a certain dwelling and has registered permanent residence according to the law on residence.

b.1.2) For foreign citizens: the regular residence is the residence recorded on the Permanent Residence Card or the temporary residence when applying for a Residence Card issued by an authorized agency of the Ministry of Public Security.

b.2) Renting a house in Vietnam according to the housing law, with rental contracts of 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 on taxable income as follows:

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:

1. Income from business

Income from business is income derived from production activities, business in the following sectors:

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6. income from prize ofs

income from prize ofs encompasses the monetary or material prizes that individuals receive in the following forms:

a) Lottery winnings paid by lottery companies.

b) Promotional winnings from purchasing goods, services as regulated by the Commercial Law.

c) Betting, wagering winnings that are legally permitted.

d) Casino winnings legally permitted to operate.

e) Game, reward contest winnings and other forms of winnings organized by economic organizations, administrative agencies, unions, and other organizations or individuals.

7. Income from Royalties

Thus, according to the above regulation, winning Miss International 2024 will be subject to personal income tax.

Is the income from prize of Miss International 2024 subject to personal income tax in Vietnam? (Image from Internet)

Is the tax period for income from prize of Miss International 2024 calculated separately?

Based on Article 7 of the Law on Personal Income Tax 2007, amended by Clause 3 Article 1 of the Law on Amendments to Personal Income Tax 2012 regarding the tax period:

Tax Period

1. Tax period for residents is specified as follows:

a) Annual tax period applies to income from business; income from salary, wages;

b) Tax period per income occurrence applies to income from capital investment; income from capital transfer except for income from securities transfer; income from real estate transfer; income from prize ofs; income from royalties; income from franchise rights; income from inheritance; income from gifts;

c. Tax period separately or annually for income from securities transfer.

2. Tax period for non-residents is calculated per income occurrence for all taxable income.

Thus, the tax period for income from prize of Miss International 2024 is calculated per income occurrence.

Note: Applicable to both residents and non-residents.

What is the tax calculation method for income from prize of Miss International 2024?

According to Article 15 of Circular 111/2013/TT-BTC on the tax calculation method for beauty pageant winnings:

Basis for Tax Calculation on Winnings

The basis for tax calculation on winnings is the taxable income and the tax rate.

1. Taxable Income

Taxable income from prize ofs is the prize value exceeding 10 million VND received by the taxpayer per winning occurrence, regardless of the number of times the prize money is received.

If a prize is shared among several winners, the taxable income is divided among the winners. Prize winners must present legal evidence for justification. Without legal evidence, winnings are attributed to one individual. If an individual wins several prizes in a single game, the taxable income is calculated on the total value of all prizes.

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2. The tax rate for personal income tax on winnings applies a uniform rate of 10%.

3. Time to Determine Taxable Income

The time for determining taxable income on winnings is when the organization or individual pays the prize to the winner.

4. Tax calculation method:

Personal income tax payable = Taxable income x 10% tax rate

Therefore, according to the above legal regulation, the method for calculating personal income tax on income from prize of Miss International 2024 is as follows:

(Miss International 2024 Prize Money - 10 million VND) x 10% Tax Rate.