What incomes are not eligible for personal exemptions when calculating personal income tax in Vietnam?

What incomes are not eligible for personal exemptions when calculating personal income tax in Vietnam?

According to the provisions of Clause 1, Article 19 of the 2007 Personal Income Tax Law (as amended and supplemented by Clause 4, Article 1 of the 2012 Amended Personal Income Tax Law) and Clause 4, Article 6 of the 2014 Tax Laws Amendment Law, personal exemptions refers to the amount deducted from taxable income before calculating tax for income from business, salaries, and wages of the taxpayer who is a resident individual.

Thus, it means that the types of income as specified in Article 2 of Circular 111/2013/TT-BTC are not eligible for personal exemptions:

(1) Income from capital investment, including:

- Loan interest.

- Dividends.

- The additional value of contributed capital received when dissolving an enterprise, changing the operating model, dividing, splitting, merging, or consolidating enterprises, or when withdrawing capital.

- Income from other forms of capital investment, excluding income from government bonds interest.

(2) Income from capital transfer, including:

- Income from transferring capital portions in economic organizations.

- Income from transferring securities.

- Income from other forms of capital transfer.

(3) Income from real estate transfer, including:

- Income from transferring land use rights and assets attached to the land.

- Income from transferring house ownership or usage rights (including future-formed houses).

- Income from transferring lease rights of land or water surface.

- Other incomes received from real estate transfers in any form.

(4) Income from winnings, including:

- Lottery winnings.

- Prizes from promotion activities.

- Prizes from betting.

- Prizes from games, competitions, and other forms of winnings.

(5) Income from royalties, including:

- Income from the transfer or use rights transfer of intellectual property.

- Income from technology transfer.

(6) Income from franchise.

(7) Income from inheritance such as securities, capital portions in economic organizations, business premises, real estate, and other properties requiring ownership or usage registration.

(8) Income from gifts such as securities, capital portions in economic organizations, business premises, real estate, and other properties requiring ownership or usage registration.

What incomes are not eligible for personal exemptions when calculating personal income tax in Vietnam? (Image from the Internet)

How much incomes from salary and wage is subject to personal income tax in Vietnam?

According to Article 2 of Circular 111/2013/TT-BTC, the regulation is as follows:

Taxable income

…

2. Income from salaries and wages

Income from salaries and wages is the income received by employees from employers, including:

a) Salaries, wages, and other amounts of a salary and wage nature, whether in cash or not.

b) Allowances and subsidies, except for the following allowances and subsidies:

b.1) Monthly incentives and one-time subsidies under the provisions of laws on incentives for those with meritorious services.

…

Furthermore, based on Article 1 of Resolution 954/2020/UBTVQH14, the regulation is as follows:

personal exemptions levels

Adjusting the personal exemptions levels prescribed in Clause 1, Article 19 of the 2007 Personal Income Tax Law No. 04/2007/QH12 as amended and supplemented by Law No. 26/2012/QH13 as follows:

1. The deduction level for taxpayers is 11 million VND/month (132 million VND/year);

2. The deduction level for each dependent is 4.4 million VND/month.

Additionally, according to Decree 73/2024/ND-CP and Decree 74/2024/ND-CP, the statutory pay rate and regional minimum wage have been increased for officials and public employees, which may directly affect the PIT levels.

Thus, for individuals without dependents, they must pay personal income tax when their total income from salaries and wages exceeds 11 million VND/month.

What is the deadline for submitting PIT finalizations in Vietnam?

According to the provisions of Article 28 of Decree 65/2013/ND-CP, income-paying organizations will temporarily deduct taxes based on the income received monthly.

Pursuant to Clause 1, Article 55 of the 2019 Tax Administration Law, the regulation is as follows:

Tax payment deadline

1. In cases where taxpayers calculate taxes, the tax payment deadline is the last day of the tax filing deadline. In cases of supplementary tax filing, the tax payment deadline is the tax filing deadline for the tax period with errors or omissions.

For corporate income tax, payments are made quarterly, with the tax payment deadline being the 30th of the first month of the subsequent quarter.

...

Additionally, according to Clause 2, Article 44 of the 2019 Tax Administration Law, the deadline for submitting PIT finalizations is as follows:

Tax filing deadline

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2. For annual tax types, the tax filing deadlines are as follows:

a) No later than the last day of the 3rd month from the end of the calendar or fiscal year for annual finalization returns; no later than the last day of the first month of the calendar or fiscal year for annual tax declarations;

b) No later than the last day of the 4th month from the end of the calendar year for PIT finalization returns for taxpayers directly settling taxes;

c) No later than December 15 of the preceding year for the tax declaration of household businesses and individuals subject to presumptive taxation; in the case of new businesses, the tax declaration deadline is within 10 days of starting the business.

...

Thus, the deadline for submitting PIT finalizations is divided into two timelines for two cases as follows:

- No later than the last day of the 3rd month from the end of the calendar or fiscal year for the finalization declarations submitted by enterprises on behalf of employees.

- No later than the last day of the 4th month from the end of the calendar year for individual taxpayer's self-submitted finalization declarations.