Are gifts given by enterprises to employees considered taxable income in Vietnam?
What incomes from wages and salaries are subject to personal income tax in Vietnam?
According to Clause 2, Article 2 of Circular 111/2013/TT-BTC, taxable incomes are defined as follows:
Taxable incomes
As stipulated in Article 3 of the Personal Income Tax Law and Article 3 of Decree No. 65/2013/ND-CP, taxable personal incomes include:
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2. Income from wages and salaries
Income from wages and salaries is the income received by the employee from the employer, including:
a) Wages, salaries, and amounts of a similar nature in monetary or non-monetary forms.
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đ) Monetary or non-monetary benefits beyond wages and salaries paid by the employer that the taxpayer enjoys in any form:
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đ.7) Other benefits.
Other benefits paid by the employer to the employee, such as expenses on holidays and festivals; hiring consulting services, tax preparation for an individual or a group; paying for household help such as drivers, cooks, and other domestic workers as per contract.
Thus, income from wages and salaries subject to tax includes:
- Wages, salaries, and amounts of a similar nature in monetary or non-monetary forms.
- Monetary or non-monetary benefits beyond wages and salaries paid by the employer that the taxpayer enjoys in any form.
- Other benefits: benefits paid by the employer to the employee, such as expenses on holidays and festivals; hiring consulting services, tax preparation for an individual or a group; paying for household help such as drivers, cooks, and other domestic workers as per contract.
Are gifts given by enterprises to employees considered taxable income in Vietnam? (Image from the Internet)
Which incomes from gifts are subject to personal income tax in Vietnam?
According to Clause 10, Article 2 of Circular 111/2013/TT-BTC, the taxable income from receiving gifts is defined as follows:
Taxable incomes
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10. Income from receiving gifts
Income from receiving gifts is the income an individual receives from domestic and foreign organizations and individuals. Specifically:
a) For receiving gifts in the form of securities, including: shares, share purchase rights, bonds, treasury bills, fund certificates, and other types of securities as regulated by the Securities Law; shares of individuals in joint-stock companies as per the Enterprise Law.
b) For receiving gifts in the form of capital in economic organizations, business establishments, including: capital in limited liability companies, cooperatives, partnerships, business cooperation contracts, capital in private enterprises, individual business establishments, capital in associations, and legally established funds, or the entirety of business establishments if they are private enterprises, individual business establishments.
c) For receiving gifts in the form of real estate, including: land use rights; land use rights with assets attached to the land; ownership rights of houses, including future-formed houses; infrastructure and buildings attached to the land, including future-formed buildings; land lease rights; water surface lease rights; other income from receiving real estate inheritance in any form, except for gifts in the form of real estate as guided at point d, Clause 1, Article 3 of this Circular.
d) For receiving gifts in the form of other assets that must be registered for ownership or usage rights with state management agencies such as: automobiles; motorcycles, mopeds; watercraft, including barges, canoes, tugs, pushers; ships, including yachts; aircraft; hunting guns, sports guns.
Thus, taxable income from receiving gifts includes:
- Income from gifts in the form of securities.- Income from gifts in the form of capital in economic organizations, business establishments.- Income from gifts in the form of real estate.- Income from gifts in the form of other assets that must be registered for ownership or usage rights with state management agencies.
Additionally, Hanoi Tax Department also relies on the regulations in Clause 2, Article 2 of Circular 111/2013/TT-BTC and Clause 10, Article 2 of Circular 111/2013/TT-BTC.
Are gifts given by enterprises to employees considered taxable income in Vietnam?
Official Dispatch 46550/CTHN-TTHT in 2022 provides the following guidance:
- If the company gives gifts to employees and the gifts are not covered by Clause 10, Article 2 of Circular 111/2013/TT-BTC, the income from receiving gifts is not subject to personal income tax.
- If the company provides monetary or non-monetary benefits resembling wages and salaries to the employee, those are considered taxable income from wages and salaries for the individual employee as regulated in Clause 2, Article 2 of Circular 111/2013/TT-BTC.
The above is the entire content of Official Dispatch 46550/CTHN-TTHT in 2022 issued by Hanoi Tax Department.
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