Shall the 2025 Tet Holiday of Vietnam last 9 days? Does the employer have to pay personal income tax on New Year lucky money?

Shall the 2025 Tet Holiday of Vietnam last 9 days?

The Office of the Government of Vietnam has issued Document No. 8726/VPCP-KGVX on November 26, 2024, conveying the directives of the Prime Minister regarding the Lunar New Year holidays and certain public holidays in 2025.

The Prime Minister of the Government of Vietnam concurred with the recommendation from the Ministry of Labor, Invalids and Social Affairs as per the aforementioned documents concerning the Lunar New Year holidays, National Day holidays, and the rescheduling of workdays to accommodate the holidays for Victory Day on April 30 and International Workers' Day on May 1, 2025. The Minister of Labor, Invalids and Social Affairs will notify administrative bodies, public service units, political organizations, socio-political organizations, businesses, and laborers in accordance with regulations.

Document No. 8726/VPCP-KGVX dated November 26, 2024...Download

According to the plan proposed by the Ministry of Labor, Invalids and Social Affairs to the Prime Minister, the Tet holiday schedule for 2025 allows officials and public employees to have 9 consecutive days off, comprising 5 days for the Tet holiday and 4 weekend days.

Specifically, officials and public employees, as well as laborers, will have 5 days off for the Tet holiday, from Monday, January 27, 2025, to Friday, January 31, 2025 (equivalent to the 28th of the Lunar December of the Year of the Dragon to the 3rd of the Lunar January of the Year of the Snake).

However, since all 5 Tet holiday days fall on weekdays in 2025, laborers will additionally have 2 weekend days before and 2 days after the Tet holidays.

Thus, officials, public employees, and laborers working in administrative bodies, public service units, political organizations, and socio-political organizations will be on holiday from January 25 to February 2, 2025 (from the 26th of the Lunar December to the 5th of the Lunar January).

Shall the 2025 Tet Holiday of Vietnam last 9 days? (Image from Internet)

Vietnam: Does the employer have to pay personal income tax on New Year lucky money?

According to point e, clause 2, Article 2 of Circular 111/2013/TT-BTC, taxable income is defined as follows:

Taxable Income

...

2. Income from salaries and wages

Income from salaries and wages includes the income earned by laborers from their employers, including:

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e) Bonuses in cash or in kind in any form, including stock bonuses, except for the following bonuses:

e.1) Bonuses acemployering titles awarded by the State, including bonuses acemployering emulation titles, awards following the law on emulation and commendation, specifically:

e.1.1) Bonuses acemployering national emulation soldier titles; Ministry, sector, central organ, province, or centrally-run city emulation soldier titles; basic level emulation soldiers, Advanced Laborers, Advanced Soldiers.

e.1.2) Bonuses acemployering commendation forms.

e.1.3) Bonuses acemployering titles awarded by the State.

e.1.4) Bonuses acemployering awards given by Boards, organizations belonging to central and local socio-political organizations in accordance with their charter and relevant laws on emulation and commendation.

e.1.5) Bonuses acemployering the Ho Chi Minh Prize, State Prize.

e.1.6) Bonuses acemployering commemorative medals, badges.

e.1.7) Bonuses acemployering commendation certificates, recognition certificates.

The authority to decide on commendation, the bonus amount acemployering the emulation titles, awards must comply with the law on emulation and commendation.

e.2) Bonuses acemployering national or international awards recognized by the Government of Vietnam.

e.3) Bonuses for technical improvements, inventions recognized by competent state agencies.

e.4) Bonuses for the detection and reporting of legal violations to competent state agencies.

....

Therefore, the New Year’s lucky money given by the employer is considered a bonus and this amount is not part of the tax-exempt bonuses. Thus, the New Year’s lucky money is a taxable personal income.

What are employer's responsibilities in declaring and paying tax on New Year Lucky Money in Vietnam?

Based on Article 24 of the Personal Income Tax Law 2007 (amended by clause 6, Article 1 of the Amended Personal Income Tax Law 2012), the responsibilities are defined as follows:

Responsibilities of organizations, individuals paying income and the individual taxpayers that are residents

1. The responsibilities for tax declaration, deduction, payment, and settlement include:

a) Organizations and individuals paying income are responsible for declaring, deducting, and paying tax to the state budget and settling tax for taxable income paid to taxpayers;

b) Individuals with taxable income are responsible for declaring, paying tax to the state budget, and settling tax as per legal regulations.

2. Organizations and individuals paying income are required to provide information about income and dependents of the taxpayers under their management as per legal regulations.

3. the Government specifies the tax deduction rates suitable for each type of income specified at point a, clause 1 of this Article and tax settlement as provided in clause 1 of this Article.

Thus, when the employer disburses New Year’s lucky money to employees, it is responsible for declaring, deducting, paying tax to the state budget, and settling the tax for this income, which is considered part of salary or wage.