Vietnam: Shall traffic whistleblowers receive up to 5 million VND from January 1, 2025? Are rewards for reporting traffic violations subject to personal income tax in Vietnam?

Vietnam: Shall traffic whistleblowers receive up to 5 million VND from January 1, 2025?

Based on Article 7 of Decree 176/2024/ND-CP which provides for the expenditure levels from the revenue collected from administrative penalties concerning traffic order and safety as follows:

Expenditure Levels

Expenditure levels prescribed in Article 5 and Article 6 of this Decree are as follows:

1. Allowance levels for officers and soldiers directly involved in ensuring night-time traffic order and safety shall not exceed 200,000 VND/person/shift (01 shift of 4 hours or more, night-time from 10:00 PM previous night to 6:00 AM the following morning), ½ shift (2 hours) allowance not exceeding 100,000 VND/person, maximum 10 shifts/month.

2. Overtime allowance levels for officials and public employees and other local forces directly involved in ensuring daytime traffic order and safety shall not exceed 100,000 VND/person/shift, maximum 10 shifts/month; for night shifts, not exceeding 200,000 VND/person/shift (01 shift of 4 hours or more, night-time from 10:00 PM previous night to 6:00 AM the following morning), ½ shift (2 hours) allowance not exceeding 100,000 VND/person, maximum 10 shifts/month.

3. Support level for individuals, organizations providing information reflecting administrative violations on traffic order and safety of 01 case, not exceeding 10% of the administrative penalty amount, maximum 5,000,000 VND/01 case.

4. Expenditure on other items shall comply with legal regulations.

Therefore, starting from January 1, 2025, individuals or organizations providing information reflecting traffic violations may be rewarded up to 5 million VND for a case.

Vietnam: Shall traffic whistleblowers receive up to 5 million VND from January 1, 2025? (Image from the Internet)

Are rewards for reporting traffic violations subject to personal income tax in Vietnam?

According to point e clause 2 Article 2 of Circular 111/2013/TT-BTC, which regulates taxable income from monetary rewards as follows:

Taxable Income

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

...

2. Income from wages and salaries

...

e) Monetary or non-monetary rewards in any form, including stock bonuses, except the following monetary rewards:

...

e.3) Bonuses for technical innovations, inventions, patents recognized by a competent State agency.

e.4) Bonuses for discovering, reporting legal violations to a competent State agency.

...

Therefore, the reward from reporting traffic violations is not subject to personal income tax.

Which types of income are exempt from personal income tax in Vietnam?

Based on Article 4 of the Law on Personal Income Tax 2007 (amended by clause 3 Article 2 of the Law Amending Tax Laws 2014 and clause 2 Article 1 of the Law Amending Personal Income Tax 2012) which specifies types of personal income exempt from personal income tax as follows:

- Income from real estate transfer between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings.

- Income from the transfer of residential houses, homestead land use rights and assets attached to homestead land in which individual owns only one residential house, homestead land.

- Income from land use rights of individuals granted by the State.

- Income from inheritance and gifts being real estate between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings.

- Income of households and individuals directly engaged in agricultural production, forestry, salt making, aquaculture, fishing not yet processed into other products or only through preliminary processing.

- Income from the conversion of agricultural land of households and individuals granted by the State for production.

- Income from interest earned from deposits at credit institutions, interest from life insurance contracts.

- Income from remittances.

- Portion of wages for night work or overtime work paid higher than daytime wages, wages in regular working hours according to law.

- Retirement pension paid by the social insurance fund; monthly pension paid by voluntary pension fund.

- Income from scholarships, including:

+ Scholarships received from the state budget;

+ Scholarships received from organizations within and outside the country according to their scholarship support programs.

- Income from non-life and life insurance contract compensations, work accident compensation, state compensation, and other compensations according to law.

- Income from a charity fund recognized or authorized by a competent State agency, operating for charitable and humanitarian purposes without profit motives.

- Income from humanitarian aid from foreign sources in governmental and non-governmental forms, approved by competent State agencies.

- Income from wages and salaries of Vietnamese sailors working for foreign shipping companies or Vietnamese shipping companies engaged in international transport.

- Income of individuals who are shipowners, individuals with the right to use ships, and individuals working on ships from activities directly providing goods and services for offshore fishing and catching operations.