How much salary does an employee receive per month to become subject to personal income tax? What are amounts deducted from the taxable income for employees in Vietnam?
What are the contents of certificate of personal income tax withholding in Vietnam?
Pursuant to the provisions of Clause 1, Article 32 of Decree 123/2020/ND-CP, the contents of certificate of personal income tax withholding are as follows:
Contents of records
1. A certificate of personal income tax withholding contains the following information:
a) Name, form number, reference number and ordinal number of the certificate of personal income tax withholding;
b) Name, address and TIN of the applicant;
c) Name, address and TIN of the taxpayer (if available);
d) Nationality (if the taxpayer is not a Vietnamese citizen);
dd) Taxable income, time of income payment, total taxable income, PIT amount deducted, income amounts received;
e) Date of the certificate of personal income tax withholding;
g) Full name and signature of income payer.
In case of electronic certificate of personal income tax withholding, digital signature is required.
Thus, according to regulations, certificates of personal income tax withholding include the 07 contents mentioned above.
How much salary does an employee receive per month to become subject to personal income tax? What are amounts deducted from the taxable income for employees in Vietnam? (Image from the Internet)
How much salary does an employee receive per month to become subject to personal income tax in Vietnam?
Taxable income is specifically stipulated in Article 2 of Circular 111/2013/TT-BTC as follows:
Taxable incomes
…
2. Incomes from wages and remunerations.
Incomes from wages and remunerations (hereinafter referred to as wages) are incomes paid to employees from employers, including:
a) Wages, remunerations, and the other amounts paid as wages or remunerations in cash or not in cash.
b) Allowances and benefits, except for:
b.1) Monthly benefits, lump-sum benefits and allowances according to regulations of law on incentives for contributors.
…
At the same time, based on Point i, Clause 1, Article 25 of Circular 111/2013/TT-BTC, regulations on tax deduction are as follows:
Tax withholding and certificate of tax withheld at source
...
i) Withholding tax in other cases
The organization or person that pays a total income from 2 million VND to a resident that does not sign a labor contract (as guided in Point c and Point d Clause 2 Article 2 of this Circular) or that signs a labor contract for less than 03 months shall withhold 10% tax on the income before it is paid to the person.
For the person that earns only a taxable income as stated above but the total taxable income estimated after personal deductions are made does not reach the taxable level, the person shall make and send a commitment (the form is provided in the guiding documents on tax administration) to the income payer as the basis for temporarily exempting the income from personal income tax.
…
In addition, based on Article 1 of Resolution 954/2020/UBTVQH14, regulations on family deductions are as follows:
Exemptions
The exemptions specified in Clause 1 Article 19 of the Law on Personal Income Tax No. 04/2007/QH12, amended by Law No. 26/2012/QH13, are changed as follows:
1. Personal exemption: 11 million VND/month (132 million VND/year);
2. Dependent exemption: 4,4 million VND/dependent/month.
Thus, according to the above regulations, if an employee's salary is from 11 million VND/month (equivalent to 132 million VND/year), he/she will have to pay personal income tax. In case of not signing an employment contract or signing an employment contract of less than three (03) months with a total income payment of 02 million VND/time or more, tax must be deducted at the rate of 10% of the income before paying the employee. In this case, the employee can make a temporary commitment to not deduct personal income tax.
What are amounts deducted from the taxable income for employees in Vietnam?
These deductions are specified in Article 9 of Circular 111/2013/TT-BTC amended by Article 1 of Resolution 954/2020/UBTVQH14 as follows:
Deductions
The deductions guided in this Article are the amounts deducted from the taxable income of the person before calculating taxable income from wages, remunerations, and business. In particular:
1. Personal deductions
According to Article 19 of the Law on Personal income tax, Clause 4 Article 1 of the Law on the amendments to the Law on Personal income tax, and Article 12 of the Decree No. 65/2013/ND-CP:
a) Personal deduction is the amount of money deducted from the taxable income before calculating tax on incomes from business, or wages earned by the resident taxpayer.
If the resident earns income from both business and wages, one deduction from the total income from business and wages shall be made.
b) Levels of personal deductions
b.1) Personal exemption: 11 million VND/month (132 million VND/year);
b.2) Dependent exemption: 4,4 million VND/dependent/month.
…
2. Deductions for insurance premiums and contributions to the voluntary pension fund
a) Insurance premiums include premiums for social insurance, health insurance, unemployment insurance and professional liability insurance, which is compulsory for some professions.
b) Contributions to the voluntary pension fund
…
3. Deductible charitable donations.
…
Thus, if the above conditions are met, the employee will receive a deduction before calculating taxable income from wages, including:
- Personal deductions
- Deductions for insurance premiums and contributions to the voluntary pension fund
- Deductible charitable donations...
LawNet