Is the salary of Vietnamese crewmembers subject to personal income tax in Vietnam?

Is the salary of Vietnamese crewmembers subject to personal income tax in Vietnam?

According to the provisions of Article 4 of Decree 65/2013/ND-CP (supplemented by Clause 6, Article 2 of Decree 12/2015/ND-CP) regarding income exempted from tax as follows:

Income Exempted from Tax

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8. Income from remittances.

9. The portion of wages and salaries for night shifts and overtime that exceeds the wages and salaries for daytime and ordinary working hours as stipulated by law.

10. Retirement salary paid by the Social Insurance Fund according to the provisions of the Law on Social Insurance, monthly retirement salary received from a voluntary pension fund. Individuals living and working in Vietnam are exempt from tax on retirement salary paid by foreign parties.

11. Income from scholarships, including:

a) Scholarships from state budget;

b) Scholarships from domestic and foreign organizations (including living expenses) under the support for promoting education program of those organizations.

12. Compensation money from life insurance, non-life insurance, health insurance; compensation for work injuries; state compensation and other compensations as stipulated by law.

13. Income from charitable funds approved or recognized by competent state authorities, operating for charitable, humanitarian purposes, not aimed at profit.

14. Income from foreign aid sources for charitable, humanitarian purposes both the Government of Vietnam and non-Government of Vietnam approved by competent state authorities.

The Ministry of Finance shall specify procedures and records to determine exempted incomes stipulated in this Article.

15. Income from salaries and wages of Vietnamese crewmembers received for working for foreign shipping companies or Vietnamese shipping companies operating international transport;

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

Thus, based on the above regulations, only the income from wages and salaries of Vietnamese crewmembers received for working for foreign shipping companies or Vietnamese shipping companies involved in international transport will be exempt from personal income tax (PIT). For income earned from wages and salaries of crewmembers in other cases, PIT must be paid if the income reaches a taxable level.

Is the salary of Vietnamese crewmembers subject to personal income tax in Vietnam? (Image from the Internet)

What types of income are subject to personal income tax in Vietnam?

Specifically, as detailed in Article 3 of Personal Income Tax Law 2007 (amended by Clauses 1 and 2 of Article 2 in Law Amending Tax Laws 2014 and Clause 1, Article 1 of Amended Personal Income Tax Law 2012) as follows:

Income subject to personal income tax includes the following types of income, excluding income exempted from tax as specified in Article 4 of the Personal Income Tax Law 2007:

(1) Income from business, including:

- Income from manufacturing, trading goods, and services;

- Income from independent practice of individuals holding a license or certificate to practice as prescribed by law.

Income from business stipulated in this clause does not include income from self-employed individuals earning revenue of 100 million VND/year or less.

(2) Income from salaries and wages, including:

- Salaries, wages, and other payments of a salary nature;

- Allowances and subsidies, except allowances and subsidies stipulated by laws on preferential treatment for persons with meritorious services; defense and security allowances; hazardous and dangerous job allowances; attraction allowances, regional allowances as prescribed by law; extraordinary difficulty allowances, labor accident and occupational disease allowances, one-time allowances for childbirth or adoption, allowances for reduced working capacity, one-time retirement allowances, monthly survivorship benefits, and other allowances as prescribed by social insurance law; severance allowances, job loss allowances as prescribed by the Labor Code; social protection allowances and other allowances and subsidies not of a salary nature as prescribed by the Government of Vietnam.

(3) Income from capital investment, including:

- Loan interest;

- Share dividends;

- Income from capital investment in other forms, except income from interest on Government of Vietnam bonds.

(4) Income from capital transfer, including:

- Income from transferring capital in economic organizations;

- Income from stock transfer;

- Income from capital transfer in other forms.

(5) Income from real estate transfer, including:

- Income from the transfer of land use rights and assets attached to land;

- Income from transferring the ownership or use rights of residential houses;

- Income from the transfer of land lease rights, water surface lease rights;

- Other income received from real estate transfer in all forms.

(6) Income from winnings, including:

- Lottery winnings;

- Promotional winnings;

- Betting winnings;

- Winnings from games, prize contests, and other forms of winnings.

(7) Income from royalties, including:

- Income from the transfer of intellectual property rights;

- Income from the transfer of technology.

(8) Income from franchise.

(9) Income from inheritance is securities, the capital in economic organizations, business establishments, real estate, and other assets subject to ownership or use registration.

(10) Income from gifts is securities, the capital in economic organizations, business establishments, real estate, and other assets subject to ownership or use registration.

Which entity is eligible for personal income tax reduction in Vietnam?

According to Article 5 of the Personal Income Tax Law 2007:

Tax Reduction

Taxpayers suffering from difficulties due to natural disasters, fires, accidents, or serious illnesses affecting their ability to pay tax shall be considered for a tax reduction corresponding to the extent of the damage, but not exceeding the tax payable.

Thus, taxpayers facing difficulties under the following circumstances are eligible for a tax reduction:

[1] Natural disasters

[2] Fires

[3] Accidents

[4] Serious illnesses