Is there an official reduction of 2% lending interest rate for those affected by Typhoon Yagi in Vietnam? Is income from lending interest subject to personal income tax?
Is there an official reduction of 2% lending interest rate for those affected by Typhoon Yagi in Vietnam?
Based on Article 1 of Decision 1629/QD-TTg 2024 of the Prime Minister of the Government of Vietnam, guiding the reduction of lending interest rates for customers borrowing from the Vietnam Bank for Social Policies affected by Typhoon No. 3 (Yagi) as follows:
Reduction of lending interest rate for customers borrowing under policy credit programs at the Vietnam Bank for Social Policies affected by Typhoon No. 3 (Yagi):
- Subjects eligible for interest rate reduction
Customers borrowing under policy credit programs at the Vietnam Bank for Social Policies as prescribed by the Prime Minister of the Government of Vietnam on interest rates (including both organizations and individuals) in 26 northern localities and Thanh Hoa.
- Interest rate reduction and implementation period
A 2% per annum reduction in lending interest rates. Applicable to loans with outstanding balances at the Vietnam Bank for Social Policies from September 1, 2024, to December 31, 2024. The implementation period for the interest rate reduction is from September 1, 2024, to December 31, 2024.
- The Vietnam Bank for Social Policies shall strengthen measures to balance operational costs to implement the interest rate reduction within the scope of the capital plan for interest rate and management fee differentials assigned in 2024; taking full responsibility before the Government of Vietnam and the Prime Minister of the Government of Vietnam for the accuracy of reported data, organizing implementation to ensure operational safety and credit quality of the bank.
Thus, customers borrowing under policy credit programs at the Vietnam Bank for Social Policies affected by Typhoon No. 3 (Yagi) in 26 northern localities and Thanh Hoa from September 1, 2024, to December 31, 2024, will receive a 2% per annum interest rate reduction.
Simultaneously, the implementation period for the interest rate reduction is from September 1, 2024, to December 31, 2024.
Is there an official reduction of 2% lending interest rate for those affected by Typhoon Yagi in Vietnam? Is income from lending interest subject to personal income tax? (Image from the Internet)
Is income from lending interest subject to personal income tax in Vietnam?
Based on Clause 3, Article 2 of Circular 111/2013/TT-BTC amended by Clause 6, Article 11 of Circular 92/2015/TT-BTC which prescribes taxable personal income as follows:
Taxable income categories
...
- Income from capital investment
Income from capital investment refers to any income an individual receives from the following forms:
a) Interest earned from lending to organizations, enterprises, households, individual businesses, or business groups under a loan contract or lending agreement, excluding interest received from deposits at credit institutions, branches of foreign banks as guided in item g.1, point g, Clause 1, Article 3 of this Circular.
b) Dividends received from capital contribution for share acquisition.
c) Profits received from capital contribution to a limited liability company, partnership, cooperative, joint venture, business cooperation contract, and other business forms as stipulated in the Enterprise Law and Cooperative Law; profits received from capital contribution to establish a credit institution as stipulated in the Law on Credit Institutions; contribution to a securities investment fund and other investment funds established and operating under legal regulations.
Not included in the taxable income from capital investment is the profit of privately-owned enterprises, one-member limited liability companies owned by individuals.
d) Additional value of contributed capital received upon the dissolution of enterprises, conversion of operating models, division, separation, merger, consolidation of enterprises, or upon capital withdrawal.
đ) Income received from interest on bonds, treasury bills, and similar valuable papers issued by domestic organizations, except for income as guided in item g.1 and g.3, point g, Clause 1, Article 3 of this Circular.
e) Income received from capital investment in other forms, including capital contribution investment in kind, reputation, land use rights, inventions, and patents.
g) Income from dividends paid in shares, income from profits recorded as increased capital.
...
Thus, income from lending interest is subject to personal income tax, except when it is interest received from deposits at credit institutions, branches of foreign banks.
How to calculate personal income tax for income from lending interest in Vietnam?
Based on Article 10 of Circular 111/2013/TT-BTC which prescribes the tax calculation basis for income from capital investment, the formula to calculate personal income tax on income from lending interest is determined as follows:
| Personal Income Tax Payable = Taxable Income × Tax Rate 5% |
In which:
(1) Taxable Income is the taxable income an individual receives from lending interest.
(2) The time for determining taxable income is when the organization or individual pays income to the taxpayer.
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