What is the personal income tax rate on income from Vietlott winnings in Vietnam?

What is the personal income tax rate on income from Vietlott winnings in Vietnam?

Based on Clause 6, Article 3 of the Law on Personal Income Tax 2007 amended by Clause 2, Article 2 of the Law amending and supplementing provisions of tax-related laws 2014, the taxable income for Vietlott winnings is regulated as follows:

Taxable Income

Taxable personal income includes the following types of income, except for non-taxable income stipulated in Article 4 of this Law:

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6. Income from winnings, including:

a) Lottery winnings;

b) Prize winnings from promotional programs;

c) Winnings from betting forms;

d) Winnings from games, contests with prizes, and other forms of winnings.

7. Income from royalties, including:

a) Income from the transfer, transfer of use rights of intellectual property rights;

b) Income from technology transfer.

8. Income from franchising.

9. Income from inheritance, including securities, capital portions in economic organizations, business establishments, real estate, and other assets subject to ownership or use registration.

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Based on Clause 1, Article 15 of Circular 111/2013/TT-BTC, the basis for tax calculation on winnings of resident individuals is regulated as follows:

Basis for determining taxable income from winnings

The basis for tax calculation on winnings is taxable income and tax rate.

1. Taxable income

Taxable income from winnings is the prize value in excess of 10 million VND that the taxpayer receives each winning time, regardless of the number of times they receive the prize.

If one prize is won by many people, the taxable income is divided among the prize recipients. The winner must provide legal evidence. If there is no legal evidence, the taxable income is calculated for one individual. If an individual wins multiple prizes in one game, the taxable income is calculated on the total value of the prizes.

Taxable income for certain games with prizes. Specifically:

a) For lottery winnings, it is the entire prize value in excess of 10 million VND per lottery ticket received in a draw without deducting any costs.

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According to Point a, Clause 2, Article 23 of Circular 111/2013/TT-BTC:

On income from winnings, inheritance, gifts

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2. Taxable income

a) Taxable income from winnings of Vietnamese non-residents is the prize value in excess of 10 million VND for each winning in Vietnam.

Income from winnings of Vietnamese non-residents is determined as for resident individuals as guided in Clause 1, Article 15 of this Circular.

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Based on Clause 4, Article 15 of Circular 111/2013/TT-BTC:

Tax calculation basis for income from winnings

The basis for tax calculation on winnings is taxable income and tax rate.

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4. Tax calculation method:

Personal income tax payable = Taxable income x 10% tax rate

According to the aforementioned regulations, an individual must pay income tax on Vietlott winnings when the prize value exceeds 10 million VND per winning. Specifically:

- For resident individuals:

+ Taxable income is the prize value in excess of 10 million VND that the individual receives for each winning.

+ If a prize is won by many, taxable income is divided based on the portion received by each individual. If it cannot be proven, taxable income is calculated for one person.

- For Vietnamese non-residents:

+ The taxable income is also the prize value in excess of 10 million VND per winning in Vietnam.

+ This regulation is applied similarly to resident individuals.

Thus, the specific tax on Vietlott winnings is (Winning amount - 10 million) x 10%.

For example, if the Vietlott winning is 46 billion VND, the personal income tax payable is: (46,000,000,000 - 10,000,000) x 10% = 4,590,000,000 VND.

What is the personal income tax rate on income from Vietlott winnings in Vietnam? When is the taxable income from Vietlott winnings determined for Vietnamese non-residents? (Image from the internet)

When is the taxable income from Vietlott winnings determined for Vietnamese non-residents?

Based on Article 23 of Circular 111/2013/TT-BTC, the timing for determining the taxable income of Vietnamese non-residents winning Vietlott is as follows:

On income from winnings, inheritance, gifts

1. Personal income tax on winnings, inheritance, and gifts of Vietnamese non-residents is determined by taxable income as guided in Clause 2 of this Article multiplied by a 10% tax rate.

2. Taxable income

a) Taxable income from winnings of Vietnamese non-residents is the prize value in excess of 10 million VND per winning in Vietnam.

Income from winnings of Vietnamese non-residents is determined similarly to resident individuals as guided in Clause 1, Article 15 of this Circular.

b) Taxable income from inheritance and gifts for Vietnamese non-residents is the value in excess of 10 million VND per occurrence in Vietnam.

Income from inheritance and gifts for Vietnamese non-residents is determined similarly to resident individuals as guided in Clause 1, Article 16 of this Circular.

3. Timing for determining taxable income

a) For winnings: the timing for determining taxable income is when the organization or individual in Vietnam pays the prize to the Vietnamese non-resident.

b) For inheritance: the timing for determining taxable income is when the individual registers ownership or use rights over the assets in Vietnam.

c) For gifts: the timing for determining taxable income is when the individual registers ownership or use rights over the assets in Vietnam.

Thus, according to the above regulation, the timing for determining the taxable income of Vietnamese non-residents winning Vietlott is when the organization or individual in Vietnam pays the prize to the Vietnamese non-resident.

What form is the Vietlott lottery winnings received in?

Based on Point a, Clause 6, Article 2 of Circular 111/2013/TT-BTC as annulled by Clause 7, Article 25 of Circular 92/2015/TT-BTC stipulates taxable incomes as follows:

Taxable income items

As regulated in Article 3 of the Law on Personal Income Tax and Article 3 of Decree No. 65/2013/ND-CP, taxable personal income includes:

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6. Income from winnings

Income from winnings is the funds or goods that individuals receive under the following forms:

a) Lottery winnings paid by lottery companies.

b) Winnings from promotional programs when participating in buying goods and services under the Commercial Law.

c) Winnings from legal betting forms.

d) Winnings from games, contests with prizes, and other prize-winning forms organized by economic organizations, administrative agencies, professional bodies, associations, and other organizations or individuals.

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Thus, Vietlott lottery winnings are the funds that individuals receive in the form of lottery winnings paid by the Vietlott lottery companies.