Which prize money is not subject to personal income tax in Vietnam? Are rewards in kind subject to personal income tax in Vietnam?
Which prize money is not subject to personal income tax in Vietnam?
According to point e, clause 2, Article 2 of Circular No. 111/2013/TT-BTC, rewards in cash or not in cash in any shape or form, including rewards in the form of securities, except for:
(1) Prize money associated with the titles awarded by the State, including the prize money associated with honorary titles as prescribed by law:
- Prize money associated with honorary titles awarded by Ministries, central and provincial agencies and associations, excellent employee titles.
- Prize money associated with the awards.
- Prize money associated with the titles awarded by the State.
- Prize money associated with the awards presented by associations and organizations belonging to central and local political organizations, socio-political organizations, social organizations, social organizations that conforms with their charters and the Law on Emulation and commendation.
- Prize money associated with the Ho Chi Minh Prize and National Prize.
- Prize money associated with medals or badges.
- Prize money associated with certificates of merit
The powers to decide the commendation and prize money associated with the titles and awards above must be conformable with the Law on Emulation and commendation.
(2) Prize money associated with national prizes and international prizes recognized by Vietnam.
(3) Rewards for technical innovations and inventions recognized by competent authorities.
(4) Rewards for reporting violations of law to competent authorities.
Which prize money is not subject to personal income tax in Vietnam? Are rewards in kind subject to personal income tax in Vietnam?
Are rewards in kind subject to personal income tax in Vietnam?
Pursuant to Clause 1, Article 104 of the 2019 Labor Code of Vietnam stipulating:
Bonuses
1. A bonus means an amount of money, a piece of property or item that is provided by an employer for his/her employees on the basis of the business performance or the employees’ performance.
At the same time, based on Point e, Clause 2, Article 2 of Circular No. 111/2013/TT-BTC:
Taxable incomes
According to Article 3 of the Law on Personal income tax and Article 3 of the Decree No. 65/2013/ND-CP, the incomes subject to personal income tax (hereinafter referred to as taxable incomes) include:
...
2. Incomes from wages and remunerations.
...
e) Rewards in cash or not in cash in any shape or form, including rewards in the form of securities, except for:
Thus, when receiving rewards in kind, individuals must pay personal income tax.
Is prize money on public holidays and Tet for employees subject to personal income tax in Vietnam?
Prize money for employees are amounts of wages and salaries. According to that, this amount is determined as one of the prize money payable to personal income tax, according to Point e, Clause 2, Article 2 of Circular No. 111/2013/TT-BTC, specifically as follows:
Taxable incomes
According to Article 3 of the Law on Personal income tax and Article 3 of the Decree No. 65/2013/ND-CP, the incomes subject to personal income tax (hereinafter referred to as taxable incomes) include:
...
2. Incomes from wages and remunerations.
...
e) Rewards in cash or not in cash in any shape or form, including rewards in the form of securities, except for:
e.1) Prize money associated with the titles awarded by the State, including the prize money associated with honorary titles as prescribed by law:
e.1.1) Prize money associated with honorary titles awarded by Ministries, central and provincial agencies and associations, excellent employee titles.
e.1.2) Prize money associated with the awards.
e.1.3) Prize money associated with the titles awarded by the State.
e.1.4) Prize money associated with the awards presented by associations and organizations belonging to central and local political organizations, socio-political organizations, social organizations, social organizations that conforms with their charters and the Law on Emulation and commendation.
e.1.5) Prize money associated with the Ho Chi Minh Prize and National Prize.
e.1.6) Prize money associated with medals or badges.
e.1.7) Prize money associated with certificates of merit
The powers to decide the commendation and prize money associated with the titles and awards above must be conformable with the Law on Emulation and commendation.
e.2) Prize money associated with national prizes and international prizes recognized by Vietnam.
e.3) Rewards for technical innovations and inventions recognized by competent authorities.
e.4) Rewards for reporting violations of law to competent authorities.
Thus, employees still have to pay personal income tax on wages if the total income from wages and salaries is up to the taxable level and prize money are not exempted from personal income tax according to the above provisions.
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