What are taxable incomes from gifts in Vietnam?

What are taxable incomes from gifts in Vietnam?

Pursuant to Clause 10, Article 2 of Circular 111/2013/TT-BTC, taxable personal income from receiving gifts includes the income that individuals receive from domestic and foreign organizations and individuals. To be specific:

- For gifts received in the form of securities, including: shares, rights to purchase shares, bonds, treasury bills, fund certificates, and other types of securities as stipulated in the Law on Securities 2019; shares of individuals in joint-stock companies in accordance with the Law on Enterprises 2020.

- For gifts received in the form of capital in economic organizations, business establishments, including: capital in limited liability companies, cooperatives, partnerships, business cooperation contracts, capital in private enterprises, individual business establishments, capital in associations, and funds authorized to be established under the law; or entire business establishments if they are private enterprises or individual business establishments.

- For gifts received in the form of real estate, including: land use rights; land use rights with assets attached to the land; house ownership, including future-formed houses; infrastructure construction and construction works attached to the land, including future-formed constructions; land lease rights; water surface lease rights; other incomes received from inheritance in the form of real estate in any form; except for income from gifts in the form of real estate guided at point d, clause 1, Article 3 of Circular 111/2013/TT-BTC.

- For gifts received as other assets that require registration of ownership or usage rights with state management agencies such as: automobiles; motorcycles, mopeds; ships, including barges, motorboats, tugboats, push boats; boats, including yachts; aircraft; hunting guns, sports guns.

What are taxable incomes from gifts in Vietnam? (Image from Internet)

What is the personal income tax rate on incomes from gifts in Vietnam?

According to Article 23 of the Personal Income Tax Law 2007, as amended by Clause 7, Article 2 of the Law on Amendments to Tax Laws 2014, the taxable personal income from gifts will apply a comprehensive tax rate. The personal income tax rate for gifts is as follows:

Thus, the personal income tax rate for gifts applies a comprehensive tax rate of 10%.

When is the time to calculate taxable amount on income from gifts in Vietnam?

Pursuant to Point b, Clause 2, Article 18 of the Personal Income Tax Law 2007, it is stipulated as follows:

Taxable Income from Inheritance, Gifts

1. Taxable income from inheritance, gifts is the value of inheritance, gifts exceeding 10 million VND that the taxpayer receives each time it occurs.

2. The time to determine taxable income is as follows:

a) For income from inheritance, it is the time when the taxpayer receives the inheritance;

b) For income from gifts, it is the time the organization or individual gifts the taxpayer or the time the taxpayer receives the income.

Thus, the time to determine taxable personal income from gifts is the time the organization or individual gifts the taxpayer or the time the taxpayer receives the income.

How to declare personal income tax on income from gifts in Vietnam?

According to Clause 6, Article 26 of Circular 111/2013/TT-BTC stipulates as follows:

Tax Declaration and Finalization

Organizations and individuals that pay income under the taxable category of personal income tax and individuals with taxable personal income are to declare tax and finalize tax according to the guidelines on procedures and dossiers in legal documents on tax management. Tax declaration principles for specific cases:

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6. Tax declaration for income from receiving inheritance, gifts

a) Individuals with income from receiving inheritance, gifts declare tax for each occurrence, including cases of tax exemption.

b) State management agencies, relevant organizations only perform the procedures for transferring ownership, usage rights of real estate, securities, contributed capital, and other assets that must be registered for ownership or usage rights to the person receiving inheritance, gifts when there is a tax payment document or confirmation from the tax agency regarding the tax-exempted income from inheritance, gifts.

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Thus, personal income tax declaration for income from gifts is as follows:

- Individuals with income from receiving gifts declare tax for each occurrence, including cases of tax exemption.

- State management agencies, relevant organizations only perform the procedures for transferring ownership, usage rights of real estate, securities, contributed capital, and other assets that must be registered for ownership or usage rights to the person receiving gifts when there is a tax payment document or confirmation from the tax agency regarding the tax-exempted income from inheritance, gifts.