What are regulations on heirs at law in Vietnam? What incomes from inheritance are subject to personal income tax in Vietnam?

What are regulations on heirs at law in Vietnam?

Pursuant to the provisions of Article 651 of the Civil Code 2015, the order of inheritance under the law is prescribed as follows:

Heirs at Law

1. Heirs at law are prescribed in the following order:

a) First order of heirs includes: spouse, biological parents, adoptive parents, biological children, adopted children of the deceased;

b) Second order of heirs includes: paternal grandparents, maternal grandparents, biological siblings of the deceased; biological grandchildren of the deceased where the deceased is the paternal grandparent or maternal grandparent;

c) Third order of heirs includes: great-grandparents of the deceased; uncles, aunts of the deceased; biological nephews/nieces of the deceased where the deceased is their uncle/aunt; great-grandchildren of the deceased where the deceased is their great-grandparent.

2. Heirs of the same order shall inherit equal shares of the estate.

3. Heirs of a subsequent order are entitled to inherit only if there are no heirs from the preceding order due to their death, absence of inheritance rights, disqualification from inheritance, or refusal to accept the inheritance.

Accordingly, based on the aforementioned provisions, the order of inheritance under the law is divided into three orders of heirs as follows:

- The first order of heirs includes: spouse, biological parents, adoptive parents, biological children, adopted children of the deceased;

- The second order of heirs includes: paternal grandparents, maternal grandparents, biological siblings of the deceased; biological grandchildren of the deceased where the deceased is the paternal or maternal grandparent;

- The third order of heirs includes: great-grandparents of the deceased; uncles, aunts of the deceased; biological nephews/nieces of the deceased where the deceased is their uncle/aunt; great-grandchildren of the deceased where the deceased is their great-grandparent.

Note: Heirs of the same order are entitled to equal shares of the estate. Heirs of a subsequent order are only entitled to inherit if there are no heirs from the preceding order due to their death, disqualification, or refusal to accept the inheritance.

What are regulations on heirs at law in Vietnam? (Image from the Internet)

What incomes from inheritance are subject to personal income tax in Vietnam?

Based on the provisions of Clause 9, Article 2 of Circular 111/2013/TT-BTC, the following Incomes from inheritance are subject to PIT:

(1) Inheritance received as securities

- Stocks, stock purchase rights, bonds, treasury bills, fund certificates

- Other types of securities as prescribed by the Securities Law 2019;

- Shares of individuals in a joint-stock company as prescribed by the Enterprise Law 2020.

(2) Inheritance received as capital in economic organizations, business establishments

- Capital contributions in limited liability companies, cooperatives, partnerships, business cooperation contracts;

- Capital in private enterprises, business establishments of individuals;

- Capital in associations, funds permitted to establish under legal provisions or entire business establishments if they are private enterprises, individual business establishments.

(3) Inheritance received as real estate

- Land use rights;

- Land use rights with assets attached to the land;

- House ownership rights, including future houses;

- Infrastructure and construction projects attached to the land, including future projects;

- Land lease rights;

- Water surface lease rights;

- Other income received from real estate inheritance in any form; except real estate inheritance under guidance at Point d, Clause 1, Article 3 of Circular 111/2013/TT-BTC.

(4) Inheritance received as other assets requiring ownership or usage registration with State management agencies

Including: automobiles; motorcycles, motor scooters; ships, including barges, canoes, tugboats, push boats; boats, including yachts; aircraft; hunting guns, sports guns.

What incomes from inheritance are exempt from PIT in Vietnam?

According to Point d, Clause 1, Article 3 of Circular 111/2013/TT-BTC on assets received from inheritance exempt from PIT, these include real estate (including housing, future construction as per real estate business legislation) specifically between:

- Husband and wife;

- Biological parents and biological 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.