Is the service allowance for senior leaders subject to personal income tax in Vietnam?

Is the service allowance for senior leaders subject to personal income tax in Vietnam?

Based on point b.8, clause 2, Article 2 of Circular 111/2013/TT-BTC, regulations on allowances and subsidies exempt from personal income tax are outlined as follows:

Taxable Income

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

1. Income from Business

...

2. Income from Wages and Salaries

Income from wages and salaries is the income received by an employee from an employer, including:

Income from wages and salaries is the income received by an employee from an employer, including:

a) Wages, salaries and other payments of a wage and salary nature, in cash or in-kind.

b) Allowances and subsidies, excluding the following allowances and subsidies:

b.1) Monthly preferential allowances and one-time subsidies as stipulated by the law on preferences for those who have rendered service to the nation.

b.2) Monthly allowances and one-time subsidies for individuals who participated in resistance, national defense, and international missions, and young volunteers who have completed their tasks.

b.3) Defense and security allowances; allowances for armed forces.

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

b.5) Attraction allowances and regional allowances.

b.6) Sudden hardship allowances, occupational accident allowances, occupational disease allowances, one-time allowances for childbirth or adoption, maternity benefits, convalescence and health restoration benefits after maternity leave, allowances due to reduced working capacity, one-time retirement benefits, monthly survivor's benefits, severance allowances, job loss allowances, unemployment benefits, and other allowances under the Labor Code and the Law on Social Insurance.

b.7) Allowances for individuals receiving social protection as prescribed by law.

b.8) Service allowances for senior leaders.

...

Therefore, according to the aforementioned regulations, the service allowance for senior leaders is exempt from personal income tax.

Is the service allowance for senior leaders subject to personal income tax in Vietnam? (Image from Internet)

What are regulations on payment of service allowance for senior leaders in Vietnam?

In accordance with Article 4 of Decision 269/2005/QD-TTg, regulations on the method of paying service allowances to senior leaders are as follows:

The service allowance is paid on a monthly basis according to the regulations.

The funding source for paying the service allowance is allocated in the annual budget estimate of the agency or unit responsible for paying salaries to the officials named in the regulation.

What is the regulation on the service allowance for senior leaders in Vietnam?

Based on Article 2 of Decision 269/2005/QD-TTg, the service allowance levels are regulated as follows:

The service allowance levels are defined as follows:

1. 400,000 VND/month applicable for the subjects specified in clauses 1 and 2, Article 1 of this Decision and Senior Experts level 3.

2. 200,000 VND/month applicable for the subjects specified in clauses 3, 4, and 5, Article 1 of this Decision and Senior Experts levels 1 and 2.

In the case of concurrently holding positions, the service allowance is received for the highest position held.

According to the above regulation, the service allowance for senior leaders is defined as follows:

- 400,000 VND/month applies to the following subjects:

+ Member of the Standing Committee of the National Assembly, Chairman of the Ethnic Council of the National Assembly;

+ Chairman of the Committees of the National Assembly;

+ Chief of the Office of the National Assembly;

+ Chief of the Office of the President;

+ Head of the Central Communist Party Committee;

+ Chief Office of the Central Committee;

+ Director of the Ho Chi Minh National Academy of Politics;

+ Editor-in-Chief of Nhan Dan Newspaper;

+ Editor-in-Chief of Communist Review and positions equal to the Head of the Central Communist Party Committee;

+ Minister, Head of the Office equivalent to the Ministry;

+ Vice Chairman and Secretary General of the Central Committee of the Vietnam Fatherland Front;

+ President of the Vietnam General Confederation of Labor;

+ President of the Vietnam Women's Union;

+ President of the Vietnam Farmers' Association;

+ President of the Vietnam Veterans Association;

+ First Secretary of the Central Committee of the Ho Chi Minh Communist Youth Union and positions equal to the Minister;

+ Secretary of the Provincial Party Committee, City Party Committee of provinces and centrally-run cities, grade 1 urban areas;

+ Permanent Deputy Secretary of the Hanoi and Ho Chi Minh City Party Committees;

+ Chairman of the People's Council, Chairman of the People's Committee of Hanoi and Ho Chi Minh City.

+ Senior Lieutenant General;

+ Admiral of the Navy;

+ Commander of Military Regions, Commands, and equivalent positions in the People's Army.

+ Senior Lieutenant General in the People's Public Security.

+ President of the Vietnam Academy of Science and Technology; President of the Vietnam Academy of Social Sciences.

+ Senior Expert level 3

- 200,000 VND/month applies to the following subjects:

+ Deputy Chairman of the Central Inspection Committee;

+ Deputy Head of the Central Communist Party Committees;

+ Deputy Chief Office of the Central Committee;

+ Secretary of the Communist Party's overseas branches;

+ Secretary of the Communist Party Central Bloc of Agencies;

+ Deputy Chairman of the Vietnam Fatherland Front;

+ Deputy Director of the Ho Chi Minh National Academy of Politics;

+ Deputy Editor-in-Chief of Nhan Dan Newspaper;

+ Deputy Editor-in-Chief of Communist Review;

+ Director of the National Political Publishing House.

+ Vice-Chairman of the National Assembly's Ethnic Council;

+ Vice-Chairman of the Committees of the National Assembly;

+ Head of the Committees under the Standing Committee of the National Assembly;

+ Deputy Chief of the Office of the National Assembly;

+ Deputy Chairman of the Office of the President;

+ Deputy Chief Justice of the Supreme People's Court;

+ Deputy Chief of the Supreme People's Procuracy;

+ Deputy Minister; Deputy Prime Minister's equivalent Offices, Head of the Government's Bodies.

+ Lieutenant General;

+ Vice Admiral of the Navy;

+ Major General;

+ Rear Admiral of the Navy;

+ Commanders of Army Divisions and equivalent positions in the People's Army.

+ Lieutenant General; Major General and Head of the General Department in the People's Public Security.

+ Member of the Central Inspection Committee;

+ Vice President of the mass organizations at the central level (Vietnam General Confederation of Labor, Vietnam Women's Union, Vietnam Farmers' Association, Vietnam Veterans Association);

+ Deputy Secretary of the Provincial Party Committee, City Party Committee of provinces and centrally-run cities, grade 1 urban areas;

+ Chairman of the People's Council, Chairman of the People's Committee of provinces and centrally-run cities, grade 1 urban areas.

+ Member of the Presidium, Standing Member of the Central Committee of the Vietnam Fatherland Front;

+ Permanent Secretary of the Central Committee of the Ho Chi Minh Communist Youth Union.

+ Senior Experts levels 1 and 2.