What is the statement of donations on September 13 by the Vietnam Fatherland Front? Are contributions from employee salaries subject to personal income tax?

What is the statement of donations on September 13 by the Vietnam Fatherland Front?

Currently, the Vietnam Fatherland Front has publicized the Vietcombank account statement 0011001932418 from September 1 to September 10, 2024. The account statement up to September 13 is awaiting information from the Vietnam Fatherland Front.

The Central Committee of the Vietnam Fatherland Front has posted 12,028 pages of the statement of donations for compatriots affected by Storm No. 3, totaling VND 527.8 billion.

To ensure transparency, the Vietnam Fatherland Front has publicized the account statement for everyone to follow.

The Central Relief Committee has also posted detailed lists of organizations and individuals who donated through the Vietcombank account 0011001932418 from September 1 to September 10, 2024.

View the entire 12,028 pages of the Vietnam Fatherland Front's donation statement from September 1 to September 10, 2024 : Here

How is the statement of donations on September 13 by the Vietnam Fatherland Front?  Are contributions from employee salaries subject to personal income tax?? (Image from the Internet)

Are contributions from employee salaries subject to personal income tax in Vietnam?

According to Article 20 of the Personal Income Tax Law 2007, it is stipulated as follows:

Deductions for charitable, humanitarian contributions

1. Charitable and humanitarian contributions are deductible from taxable income before calculating taxes on income from business, salaries, and wages of resident taxpayers, including:

a) Contributions to organizations and establishments caring for and raising children in particularly difficult circumstances, people with disabilities, and homeless elderly people;

b) Contributions to charitable funds, humanitarian funds, and scholarship funds.

.....

According to Clause 3, Article 9 of Circular 111/2013/TT-BTC, amended by Clause 6, Article 25 of Circular 92/2015/TT-BTC, regarding deductions for charitable, humanitarian, and educational contributions:

Deductions

....

3. Deductions for charitable, humanitarian, and educational contributions

a) Charitable, humanitarian, and educational contributions are deductible from taxable income before calculating taxes on income from business, salaries, and wages of resident taxpayers, including:

......

a.2) Contributions to charitable funds, humanitarian funds, and scholarship funds established and operating under Decree No. 30/2012/ND-CP dated April 12, 2012, by the Government of Vietnam regarding the organization and operation of social funds, charitable funds, operating for charitable, humanitarian, and educational purposes, not for profit, and according to other related documents on the management and use of sponsorship funds.

The documents proving charitable, humanitarian, educational contributions are legal receipts issued by central or provincial organizations and funds.

b) Charitable, humanitarian, and educational contributions arising in a fiscal year are deductible from taxable income of that fiscal year. If not fully deducted, they cannot be carried over to the next fiscal year. The maximum deduction does not exceed the taxable income from salaries, wages, and business income of the fiscal year in which the charitable humanitarian educational contribution arises.

According to Official Dispatch 4184/TCT-DNNCN in 2019 regarding legal receipts for humanitarian charitable contributions:

Based on the regulations, guidelines, and the tax voter's records, in 2018, the Vietnam Construction Bank (VCBank) upon the call from the Vietnam Fatherland Front, the bank mobilized a deduction of one day’s salary from employees transferred to the account of the Vietnam Bank Trade Union and had sufficient transfer receipts and a list of individuals with deducted salary confirmed by the branch management. Subsequently, the Vietnam Bank Trade Union handed over the funds and supported the provincial Vietnam Fatherland Fronts with legal receipts under Clause 3, Article 3 and Article 16 of the Accounting Law No. 88/2015/QH13 dated November 20, 2015, issued by the provincial Vietnam Fatherland Fronts, so VCBank employees could deduct these charitable, humanitarian contributions from their personal income tax when finalizing taxes for 2018.

Thus, humanitarian charitable contributions are deductible from personal income tax if there are documents proving charitable, humanitarian, educational contributions with legal receipts issued by central or provincial organizations and funds.

If the company deducts charitable, humanitarian contributions from employees' salaries, these contributions will not be subject to PIT if the following criteria are met:

- The company campaigns to deduct one day’s salary from employees for humanitarian charitable contributions.

- The money is transferred to the account of an authorized organization calling for charity and has complete transfer receipts and a list of individuals with deducted salary confirmed by an authoritative person.

- There are legal accounting receipts issued by central or provincial organizations and funds according to the Accounting Law 2015.

How to determine the personal income tax period in Vietnam?

According to Article 7 of the Personal Income Tax Law 2007, amended by Clause 3, Article 1 of the Personal Income Tax Amendment Law 2012 on personal income tax calculation periods, the personal income tax period is determined as follows:

- For resident individuals:

+ The annual tax calculation period applies to income from business; income from salaries, and wages.

+ The tax calculation period according to each instance of income applies to income from investment; capital transfer income, excluding income from securities transfer; income from real estate transfer; winning income; copyright income; franchise income; inheritance income; gift income.

+ The tax calculation period can be each instance of transfer or per year for income from securities transfer.

- For non-resident individuals: the tax calculation period is per instance of income for all taxable income.