What is the personal income tax rate for the distribution and provision of goods in Vietnam?

What is the personal income tax rate for the distribution and provision of goods in Vietnam?

Based on point a, clause 3, Article 10 of the Law on Personal Income Tax 2007, as amended by Clause 4, Article 2 of the Law Amending Various Tax Laws 2014, the specific regulations on personal income tax rates are as follows:

Tax on business individuals

1. Business individuals shall pay personal income tax at a percentage of revenue for each business sector or industry.

2. Revenue comprises all money from sales, processing, commissions, and service provision arising during the tax calculation period from production, business activities in goods, and services.

In the event that a business individual cannot determine the revenue, the tax authority shall determine the revenue according to legal regulations on tax administration.

3. Tax rates:

a) Distribution and provision of goods: 0.5%;

b) Services, construction without materials: 2%.

Specifically, rental activities, insurance agency, lottery agency, and multi-level sales agency: 5%;

c) Production, transportation, services associated with goods, construction with materials included: 1.5%;

d) Other business activities: 1%.

Therefore, according to the above regulation, the distribution and provision of goods are subject to a personal income tax rate of 0.5%.

What is the personal income tax rate for the distribution and provision of goods in Vietnam? (Image from the Internet)

What income is exempt from personal income tax in Vietnam?

According to Article 4 of the Law on Personal Income Tax 2007, supplemented by clause 3, Article 2 of the Law Amending Various Tax Laws 2014, and amended by Clause 2, Article 1 of the Law on Personal Income Tax Amendment 2012, the regulations on personal income exempt from personal income tax are as follows:

- Income from the transfer of real estate between spouses; 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.

- Income from the transfer of residential housing, homestead land use rights, and assets attached to homestead land of an individual in cases where individuals have only one place of residency and a single homestead land.

- Income from the value of land use rights of an individual received from the State.

- Income from the inheritance or gifts of real estate between spouses; 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.

- Income of households and individuals directly engaged in agricultural, forestry, salt production, aquaculture, and fishing activities that have not been processed into other products or are only preliminarily processed.

- Income from the exchange of agricultural land by households and individuals received from the State for production.

- Income from interest on deposits at credit institutions, interest from life insurance contracts.

- Income from overseas remittances.

- Part of the night shift or overtime salary paid higher than the day shift or regular working hours salary according to legal regulations.

- Retirement pensions paid by the Social Insurance Fund; retirement pensions paid monthly by voluntary retirement funds.

- Income from scholarships, including:

+ Scholarships received from the state budget;

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

- Income from contract insurance compensation, non-life insurance, compensation for labor accidents, state compensations, and other compensations according to legal regulations.

- Income received from charitable funds established or recognized by competent state agencies, operating for charitable, humanitarian purposes, not for profit.

- Income received from foreign aid for charitable, humanitarian purposes in both governmental and non-governmental forms approved by competent state authorities.

- Income from wages, salaries of crew members who are Vietnamese nationals working for foreign shipping firms or Vietnamese shipping firms in international transport.

- Income of individuals who are ship owners, individuals entitled to use ships, and individuals working on ships from activities providing goods, services directly serving offshore fishing activities.

What cases are eligible for a personal income tax refund in Vietnam?

Based on clause 2, Article 8 of the Law on Personal Income Tax 2007, the cases eligible for a personal income tax refund are as follows:

- The amount of personal income tax paid is greater than the amount of personal income tax payable;

- Individuals who have paid personal income tax but have incomes subject to tax below the taxable threshold;

- Other cases as decided by competent state authorities.