What are principles for determining personal deduction levels in Vietnam?

What are principles for determining personal deduction levels in Vietnam?

According to Clause 2, Article 19 of the Law on Personal Income Tax 2007, specific regulations on family deduction are as follows:

Family Deduction

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2. Determining the level of family deduction for dependents is based on the principle that each dependent can only be claimed once by one taxpayer.

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Thus, based on the above regulations, the principle for determining the level of family deduction for dependents is that each dependent can only be claimed once by a single taxpayer.

What are principles for determining personal deduction levels in Vietnam? (Image from Internet)

What income is exempt from personal income tax in Vietnam?

According to Article 4 of the Law on Personal Income Tax 2007, as supplemented by Clause 3, Article 2 of the Law on Amendments to Tax Legislations 2014, and amended by Clause 2, Article 1 of the Amended Law on Personal Income Tax 2012, the following personal incomes are exempt from personal income tax:

- Transfers of 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; and between siblings.

- Transfers of residential houses, rights to use homestead land, and assets attached to homestead land in cases where individuals own only one residential house or one piece of homestead land.

- Income from the value of land use rights allocated to individuals by the State.

- Inheritances and gifts of 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; and between siblings.

- Income of household families and individuals directly engaged in agricultural and forestry production, salt making, aquaculture, and fishing that have not been processed into other products or only undergone primary processing.

- Income from the conversion of agricultural land allocated by the State to households or individuals for production purposes.

- Interest from deposits at credit institutions and from life insurance contracts.

- Remittances from overseas.

- The portion of wages for night shifts or overtime that is higher than regular day work or legal working hours.

- Retirement pensions paid by the Social Insurance Fund and voluntary pension funds paid monthly.

- Income from scholarships, including:

+ Scholarships from the government budget;

+ Scholarships from domestic and foreign organizations under their scholarship support programs.

- Income from compensation for life and non-life insurance contracts, workers' accident compensations, state compensation, and other compensations as prescribed by law.

- Income received from charitable funds permitted or recognized by state authorities as operating for charitable, humanitarian, or non-profit purposes.

- Income from foreign donations for charitable, humanitarian purposes in the form of governmental and non-governmental aid approved by competent state authorities.

- Income from wages and salaries received by Vietnamese sailors working for foreign or international shipping companies.

- Income of shipowners, individuals with the right to use ships, and individuals working on vessels from providing goods and services directly serving offshore fishing and exploitation activities.

What is the personal income tax calculation period in Vietnam?

According to Article 7 of the Law on Personal Income Tax 2007, as amended by Clause 3, Article 1 of the Amended Law on Personal Income Tax 2012, the personal income tax calculation period is defined as follows:

- The tax calculation period for resident individuals is defined as follows:

+ An annual tax period applies to income from business activities and wages/salaries;

+ A tax period for each income occurrence applies to income from capital investment; income from capital transfers, except income from securities transfers; real estate transfers; winnings; royalties; franchises; inheritances; and gifts;

+ A tax period for each transfer occurrence or annually for income from securities transfers.

- The tax calculation period for non-resident individuals is applied to each occurrence of taxable income.