Vietnam: What is the newest partially progressive tariff of PIT in 2024?

What is the newest partially progressive tariff of PIT in 2024 in Vietnam?

Under Clause 2, Article 22 of the Personal Income Tax Law 2007, the newest partially progressive tariff of PIT in 2024 is stipulated as follows:

What is the newest partially progressive tariff of PIT in 2024 in Vietnam? (Image from the Internet)

What do the applicable incomes of the partially progressive tariff of PIT in Vietnam include?

Under Clause 1, Article 22 of the Personal Income Tax Law 2007:

Article 22. Partially progressive tariff

1. The partially progressive tariff applies to taxed incomes specified in Clause 1, Article 21 of this Law.

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Thus, the partially progressive tariff applies to taxable incomes from business, wages, and salaries.

A taxed income from business, salary or wage is the total of taxable incomes specified in Articles 10 and 11 of the Personal Income Tax Law 2007 minus premiums of social insurance, health insurance and professional liability insurance for some professions and jobs subject to compulsory insurance and reductions specified in Articles 19 and 20 of the Personal Income Tax Law 2007.

Note: The provision related to determining tax for individual businesses in Clause 1, Article 21 has been annulled by Clause 4, Article 6 of the Law on Amendments to Tax Laws 2014.

What are the cases of PIT reduction in Vietnam?

Under Article 5 of the Personal Income Tax Law 2007:

Tax reduction

Taxpayers who face difficulties caused by natural disasters, fires, accidents or severe diseases and affecting their tax payment ability may be considered for tax reduction corresponding to the extent of damage they suffer from but not exceeding payable tax amounts.

Thus, taxpayers who face difficulties caused by natural disasters, fires, accidents or severe diseases and affecting their tax payment ability may be considered for tax reduction corresponding to the extent of damage they suffer from but not exceeding payable tax amounts.

What is the determination of the PIT period in Vietnam?

According to Article 7 of the Law on PIT 2007, amended by Clause 3, Article 1 of the Law on Amendments to Law on Personal Income Tax Law 2012 2012, the PIT period is determined as follows:

- For residents, tax period is specified as follows:

+ Annual tax period, which is applicable to incomes from business, salaries and wages.

+ Tax period upon each time of income generation, which is applicable to incomes from capital investment; incomes from capital transfer, except for incomes from securities transfer; incomes from real estate transfer; incomes from prizes; incomes from copyright; incomes from commercial franchising; incomes from inheritances; and gifts.

+ Tax period upon each transfer or annual tax period, which is applicable to Incomes from transfer of securities.

- For non-residents, the tax period counted upon each time of income generation is applicable to all their taxable incomes.

Who are personal income taxpayers in Vietnam?

Pursuant to Article 2 of Decree 65/2013/ND-CP, PIT payers include resident and non-resident individuals who earn taxable incomes.

 The scope to define the taxable income of taxpayers shall be as follows:

+ For resident individuals, their taxable incomes are incomes earned inside and outside the Vietnamese territory, regardless of where their incomes are paid;

+ For non-resident individuals, their taxable incomes are incomes earned in Vietnam, regardless of where their incomes are paid.

- A resident individual means a person who satisfies any of the following conditions: (*)

+ Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of his/her presence in Vietnam;

Individuals present in Vietnam under this Point means those whose presence is in the Vietnamese territory.

+ Having a place of habitual residence in Vietnam in either of the following two cases:

++ Having a registered place of permanent residence under the law on residence;

++ Having a rented house for dwelling in Vietnam under the law on housing, under a rent contract with a term of 183 days or more in a tax year.

In case an individual has a place of permanent residence in Vietnam as prescribed in this point but he/she actually presents in Vietnam less than 183 days in tax year and he/she fail to prove that he/she is resident person of other country, so he/she will be considered as resident person in Vietnam.

- A non-resident individual means a person who does not satisfy any of the conditions specified in (*).