Will allowances for people with meritorious services in Vietnam maintain in 2025 according to Resolution 159? Are allowances for people with meritorious services subject to personal income tax?

Will allowances for people with meritorious services in Vietnam maintain in 2025 according to Resolution 159?

Recently, on November 13, 2024, the National Assembly officially passed Resolution 159/2024/QH15 on the state budget estimate for 2025.

Download Resolution 159/2024/QH15 of the National Assembly.

According to Clause 1, Article 3 of Resolution 159/2024/QH15, which regulates the implementation of wage policy and certain social policies as follows:

On the Implementation of Wage Policies and Certain Social Policies

1. There will be no increase in public sector wages, pensions, social insurance allowances, monthly allowances, and allowances for people with meritorious services to the country in 2025.

...

Thus, the allowance for people with meritorious services will maintain in 2025, maintaining the current standard level of 2,789,000 VND after being increased by 35.7% on July 1, 2024, according to Decree 77/2024/ND-CP.

Will allowances for people with meritorious services in Vietnam maintain in 2025 according to Resolution 159? Are allowances for people with meritorious services subject to personal income tax? (Image from the Internet)

Are allowances for people with meritorious services subject to personal income tax in Vietnam?

Based on Point b, Clause 2, Article 2 of Circular 111/2013/TT-BTC amended by Clause 1, Article 11 of Circular 92/2015/TT-BTC which prescribes allowances and benefits not subject to personal income tax as follows:

Taxable Income Components

According to the provisions of Article 3 of the Law on Personal Income Tax and Article 3 of Decree No. 65/2013/ND-CP, taxable incomes for personal income tax include:

...

2. Income from wages and salaries

...

b) Allowances and benefits, except for the following:

b.1) Monthly preferential allowances and one-time benefits according to the law's provisions on benefits for people with meritorious services.

b.2) Monthly allowances, one-time benefits for individuals participating in resistance, protecting the Fatherland, undertaking international duties, young volunteers who completed their tasks.

b.3) Defense and security allowances; allowances for the armed forces.

b.4) Hazardous and dangerous allowances for sectors, occupations, or jobs in working environments with hazardous and dangerous elements.

b.5) Attraction and regional allowances.

b.6) Emergency hardship benefits, labor accident allowances, occupational disease benefits, one-time maternity or adoption benefits, maternity leave, health recovery following childbirth, compensation due to labor capability reduction, one-time retirement benefits, monthly survivorship allowances, severance allowances, unemployment benefits, and other allowances pursuant to the Labor Code and the Social Insurance Law.

b.7) Benefits for individuals protected by social laws.

b.8) Service allowances for high-level leaders.

b.9) One-time relocation allowances for individuals transferring to economically and socially challenging regions, one-time support for officials involved in maritime sovereignty as prescribed by law. One-time relocation allowances for foreigners residing in Vietnam, and Vietnamese working abroad.

b.10) Allowances for health workers in rural and village areas.

b.11) Specific occupational allowances.

The allowances and benefits that are not included in taxable income guided at point b, clause 2, of this Article must be regulated by a competent state agency.

In cases where the special allowances and benefits apply to the state sector, other economic sectors and business establishments shall base on the list and levels of allowances and benefits provided for the state sector for deductions.

If the allowances and benefits received exceed the levels specified, the excess amount must be included in taxable income.

The one-time regional relocation allowances for foreigners residing in Vietnam or Vietnamese working abroad are exempt according to the levels specified in the labor contract or collective labor agreement.

...

Therefore, the allowance for people with meritorious services is not subject to personal income tax, except in cases where a person with meritorious services receives an allowance higher than the prescribed amount, in which case the excess will be taxed as personal income.

Who are people with meritorious services to the revolution in Vietnam?

According to Clause 1, Article 3 of the Ordinance on Preferential Treatment for People with Meritorious Services to the Revolution 2020 which stipulates the categories of people with meritorious services to the revolution, they include:

- Those involved in revolutionary activities before January 1, 1945;

- Those involved in revolutionary activities from January 1, 1945, to the August Revolution in 1945;

- Martyrs;

- Heroic Vietnamese Mothers;

- Heroes of the People's Armed Forces;

- Labor Heroes during the resistance period;

- Wounded soldiers, including class B wounded soldiers recognized before December 31, 1993; those receiving policies like wounded soldiers;

- Sick soldiers;

- Individuals involved in resistance acts affected by toxic chemicals;

- Individuals active in the revolution, resistance, and national defense, who were imprisoned or exiled;

- Individuals involved in the resistance for national liberation, defense, performing international obligations;

- Individuals who helped the revolution.