Is there a Draft outline for the Law on Personal Income Tax replacing the Law on Personal Income Tax 2007 in Vietnam?

Is there a Draft outline for the Law on Personal Income Tax replacing the Law on Personal Income Tax 2007 in Vietnam?

The Ministry of Finance has announced the Draft Outline for the Law on Personal Income Tax to replace the Law on Personal Income Tax 2007 with an orientation to amend regulations related to personal income tax such as:

Taxable income; income exempt from tax; basis for tax calculation and methods for determining the amount of tax payable on certain types of income; personal income tax rate bracket for income from salaries, wages; family deductions for taxpayers and dependents.

Download to view the full text of the Draft Outline for the Law on Personal Income Tax (replacement).

Is there a Draft outline for the Law on Personal Income Tax replacing the Law on Personal Income Tax 2007 in Vietnam? (Image from the Internet)

What are the new points in the Draft Outline for the Law on Personal Income Tax in Vietnam?

The Draft Outline for the Law on Personal Income Tax (replacement) has proposed directions to amend and supplement some personal income tax regulations as follows:

(1) Regarding income exempt from personal income tax

- Supplementing the regulation of personal income tax (PIT) exemption for:

+ Income from dividend shares of members of agricultural cooperatives, individuals who are farmers contracted with enterprises participating in the "Large Field";

+ Income from voluntary retirement funds, additional retirement insurance funds; income from the transfer of emission reduction certificates, the initial transfer of carbon credits after issuance by individuals granted emission reduction certificates, carbon credits;

+ Income from interest on green bonds;

+ Income from the initial transfer of green bonds post-issuance to institutionalize the Party's and State's orientations on rural agricultural development, enhancing the social security system's coverage, and promoting green growth and sustainable development.

Assign the Government of Vietnam to detail and guide implementation to suit arising realities.

(2) Regarding reduced personal income tax

- Supplementing the provision for reducing personal income tax on income from salaries and wages of individuals who are high-tech (CNC) personnel working in enterprises, projects in information technology, agriculture, agricultural processing sectors, including: CNC enterprises, agriculture enterprises applying CNC, CNC application projects in the list of CNC prioritized for investment development, CNC product manufacturing projects in the list of CNC products encouraged for development.

- Supplementing the provision assigning the Prime Minister of the Government of Vietnam to allow exemption, tax reduction in some special cases such as: foreign experts working in programs, projects funded by Official Development Assistance (ODA); foreign experts working in foreign non-governmental programs, projects in Vietnam; Vietnamese individuals working at representative offices of international organizations under the United Nations System in Vietnam.

(3) Regarding taxable income from capital transfer

- Reviewing, amending, and supplementing regulations regarding individuals' income from derivatives trading.

- Amending, supplementing regulations on taxable PIT income from capital transfer, securities transfer of individuals.

- Adding a tax calculation method for taxable income in this Article and adjusting the Article's name to correspond with the modification content.

(4) Regarding taxable income from real estate transfer

- Amending, supplementing regulations on individuals' income from real estate transfer to ensure synchronization with the Land Law 2024.

- Amending, supplementing the time of determining taxable income for income from real estate transfer.

- Adding a tax calculation method for taxable income in this Article and adjusting the Article's name to correspond with the modification content.

(5) Deductions for charitable and humanitarian donations

Supplementing the scope of determining charitable and humanitarian donations eligible for deduction; researching to supplement other specific deductions to help support taxpayers and implement the Party's and State's policies related to fields such as health, education; simultaneously assigning the Government of Vietnam to detail and guide implementation to suit arising realities.

Who is personal income taxpayer in Vietnam under current regulations?

Based on Article 2 of the Law on Personal Income Tax 2007 stipulating the subjects required to pay personal income tax as follows:

Tax Subjects

1. Individuals subject to personal income tax are resident individuals with taxable income as prescribed in Article 3 of this Law arising inside and outside the territory of Vietnam and non-resident individuals with taxable income as prescribed in Article 3 of this Law arising within the territory of Vietnam.

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

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

b) Having a regular place of residence in Vietnam, including a registered permanent residence or a rental house in Vietnam under a lease contract with a term.

3. A non-resident individual is a person who does not meet the conditions specified in Clause 2 of this Article.

According to the above regulations, individuals required to pay personal income tax include resident individuals with taxable income as prescribed in Article 3 of the Law on Personal Income Tax 2007 arising inside and outside the territory of Vietnam and non-resident individuals with taxable income as prescribed in Article 3 of the Law on Personal Income Tax 2007 arising within the territory of Vietnam.