Who is the personal tncome taxpayer for an individual business in Vietnam?

Who is the personal tncome taxpayer for an individual business in Vietnam?

Pursuant to point a, clause 3, Article 1 of Circular 111/2013/TT-BTC amended by Article 2 of Circular 119/2014/TT-BTC, specific regulations on taxpayers for individuals with income from business activities are as follows:

- In cases where only one individual’s name is on the Business Registration Certificate, the taxpayer is the individual named in the Business Registration Certificate.

- In cases where multiple individuals’ names are on the Business Registration Certificate (a group of Individual businesses) and are jointly engaging in business, each member named in the Business Registration Certificate is a taxpayer.

- In cases where multiple individuals in a household participate in business but only one is named in the Business Registration Certificate, the taxpayer is the individual named in the Business Registration Certificate.

- If an individual or household conducts business without a Business Registration Certificate (or Certificate, License), the taxpayer is the individual conducting the business activity.

- For rental activities of houses, land use rights, water surfaces, or other assets without business registration, the taxpayer is the individual owning the house, land use rights, water surfaces, or other assets. In cases where multiple individuals co-own a house, land use rights, water surfaces, or other assets, each individual with ownership or usage rights is a taxpayer.

Who is the personal tncome taxpayer for an individual business in Vietnam? (Image from the Internet)

What are regulations on personal income tax period in Vietnam?

According to Article 7 of the Law on Personal Income Tax 2007, amended by clause 3, Article 1 of the Amended Law on Personal Income Tax 2012, tax periods are defined as follows:

- For resident individuals:

+ Annual tax period applies to income from business; income from wages and salaries;

+ Tax period for each time income arises applies to income from capital investment; income from capital transfer, excluding securities transfer; income from real estate transfer; income from winnings; income from royalties; income from franchise; income from inheritance; income from gifts;

+ Tax period for each securities transfer or annually for income from securities transfer.

- For non-resident individuals, the tax period is calculated for each time taxable income arises for all taxable income types.

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 Amended Law on Personal Income Tax 2012, specific exempted personal income types are as follows:

- Income from the transfer of real estate between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; grandparents and grandchildren; siblings.

- Income from the transfer of housing, residential land use rights, and property attached to such land if the individual has only one house or residential land.

- Income from the value of land use rights granted by the State to individuals.

- Income from inheritance, gifts that are real estate between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; grandparents and grandchildren; brothers and sisters.

- Income of households and individuals directly engaged in agricultural, forestry production, salt production, aquaculture and fishing which have not been processed into other products or only undergone basic processing.

- Income from the transformation of agricultural land granted by the State to households and individuals for production purposes.

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

- Remittance income.

- Salary or wages for night work or overtime paid higher than regular daytime work in accordance with the law.

- Retirement pension paid by the Social Insurance Fund; pension paid monthly by the voluntary retirement fund.

- Income from scholarships, including:

+ Scholarships funded by the state budget;

+ Scholarships funded by domestic and foreign organizations under a study encouragement program of those organizations.

- Income from compensation for life insurance and non-life insurance contracts, compensation for occupational accidents, state compensation, and other compensation as prescribed by law.

- Income received from charities approved or recognized by competent state agencies, operating for charitable, humanitarian, and non-profit purposes.

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

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

- Income of individuals who are ship owners, individuals with the right to use the ship, and individuals working on ships from the sale of goods and services directly serving long-distance offshore fishing and catching activities.