When does the Quarter 4 of 2024 begin? Which income is exempt from personal income tax in Vietnam?

What day does Quarter 4 of 2024 start?

In a year, there are four quarters as follows:

- Quarter 1: January, February, March

- Quarter 2: April, May, June

- Quarter 3: July, August, September

- Quarter 4: October, November, December

Therefore, the beginning of Quarter 4, 2024 is October 1, 2024.

What day does Quarter 4 of 2024 start? When is the deadline for the PIT return submission in Vietnam of Q4/2024? (Image from the Internet)

Which income is exempt from personal income tax in Vietnam?

According to Clause 1, Article 3 of Circular 111/2013/TT-BTC as amended and supplemented by Article 12 of Circular 92/2015/TT-BTC, the types of income that are exempt from personal income tax are stipulated as follows:

- Income from real estate transfer (including future housing, future construction projects as per real estate business law) between: husband and wife; biological parents and children; adoptive parents and children; parents-in-law and daughter-in-law; parents-in-law and son-in-law; grandparents and grandchildren; siblings.

In cases where real estate (including future housing, future construction projects as per real estate business law) is jointly established during marriage and deemed as joint property of the couple, upon divorce, it may be divided per agreement or court ruling, and such division is exempt from tax.

- Income from the transfer of housing, homestead land use rights, and associated assets of individuals in the case where the transferee possesses only one house or homestead land use right in Vietnam.

- Income from the land use rights value of individuals assigned land by the State without payment or granted a reduction in land levy per legal regulations.

In the case where individuals have been exempted from or reduced land levy upon being assigned land and later transfer such land, they must declare and pay tax on income from the real estate transfer as guided in Article 12 of Circular 111/2013/TT-BTC.

- Income from receiving inheritance or gifts as real estate (including future housing, construction projects as per real estate business law) between: husband and wife; biological parents and children; adoptive parents and children; parents-in-law and daughter-in-law; parents-in-law and son-in-law; grandparents and grandchildren; siblings.

- Income from converting agricultural land to rationalize agricultural production without changing the family's or individual's land use purpose, directly engaged in agricultural production and assigned by the State for production.

- Income of households and individuals directly involved in production activities in agriculture, forestry, salt production, aquatic cultivation, exploitation not further processed or only primitively processed.

- Interest income from deposits at credit institutions, branches of foreign banks; interest from life insurance contracts; income from interest on bonds issued by the Government of Vietnam.

- Income from remittances exempted from tax includes funds received from abroad sent by relatives who are Vietnamese residing overseas, Vietnamese working, working, studying abroad sent back to relatives in the country.

In cases where individuals receive funds from relatives abroad sent by foreign nationals that meet the conditions for encouraging remittances back home as per the State Bank of Vietnam’s regulations, they are also exempt from tax under this provision.

The basis to determine tax-exempt income under this point includes documents substantiating the source of the overseas received funds and receipts of payments by the paying organization (if any).

- Income from salaries, wages for night work, overtime paid higher than day time, regular office hours as stipulated by the Labor Code.

- Pension paid by the Social Insurance Fund as provided by the Law on Social Insurance; monthly pension received from the voluntary pension fund.

Individuals living and working in Vietnam are exempt from tax on overseas-paid pensions.

- Income from scholarships

- Income from compensation under life insurance contracts, non-life insurance, health insurance; work accident compensation; compensation, support prescribed by law on compensation, support, resettlement; state compensation, and other compensations according to the legal regulations.

- Income received from charities permitted by the State for establishment or recognition, operating for charitable, humanitarian, educational purposes, non-profit-oriented.

- Income from foreign aid for charitable, humanitarian purposes in the form of governmental and non-governmental aid approved by the competent state agency.

The basis for determining tax-exempt income under this point is the documentation by the competent state agency approving the aid receipt.

- Income from wages and salaries of Vietnamese crew members working for foreign shipping companies or Vietnamese shipping companies engaged in international transport.

- Income of individuals who are ship owners, persons with the right to use ships, and individuals working on ships obtained from providing goods and services directly serving offshore fishery exploitation.

What are procedures for extending the tax return submission deadline in Vietnam?

According to Article 46 of the Law on Tax Administration 2019, specific regulations about filing for an extension for PIT tax returns are as follows:

- Taxpayers unable to submit tax returns on time due to natural disasters, catastrophes, epidemics, fires, or unforeseen accidents shall have the deadline extended by the direct tax authority head.

- The extension period should not exceed 30 days for monthly, quarterly, annual tax returns, each time a tax obligation arises; and 60 days for filing final tax settlement returns from the deadline for submission of tax returns.

- Taxpayers must submit a written request for extension to the tax authority before the tax return deadline, stating their reason for requesting and having confirmation from the People's Committee or Commune-level Police where the extension applicable case arises as stipulated in clause 1 of this Article.

- Within 3 working days from receipt of the extension request, the tax authority must provide a written response on the acceptance or rejection of the tax return extension request.

What is the penalty for late submission of PIT returns in Vietnam?

According to Article 13 of Decree 125/2020/ND-CP, regulations on penalties for late tax return submission are as follows:

- A warning for submissions more than 1 to 5 days late with mitigating circumstances.

- A fine ranging from VND 2,000,000 to 5,000,000 for filing tax returns 1 to 30 days late, except as provided in clause 1 of this Article.

- A fine ranging from VND 5,000,000 to 8,000,000 for submitting tax returns 31 to 60 days late.

- A fine ranging from VND 8,000,000 to 15,000,000 for the following acts:

- Filing tax returns 61 to 90 days late;

- Filing tax returns 91 days or more late without incurring taxes due;

- Not filing tax returns where no taxes are due;

- Failing to submit required annexes as per tax management regulations concerning businesses with associated transactions attached to corporate income tax finalization returns.

- A fine ranging from VND 15,000,000 to 25,000,000 for filing tax returns over 90 days late from the deadline, with taxes due, and the taxpayer has paid the full tax amount along with late payment interest into the state budget before the tax authority announces a tax audit decision, tax inspection or records the act of late submission of tax returns as provided in clause 11 Article 143 of the Law on Tax Administration 2019.

Note: For the same administrative tax and invoice violation, the penalty for organizations is double the fine applicable to individuals.