Are retirement pensions subject to personal income tax? What are the regulations on the tax period for personal income tax in Vietnam?
Are retirement pensions subject to personal income tax in Vietnam?
Article 4 of the 2007 Law on Personal Income Tax in Vietnam (added by Clause 3, Article 2 of the 2014 Law on Amendments to Tax Laws; amended by Clause 2, Article 1 of the 2012 Law on Amendments to the Law on Personal Income Tax) has provisions on tax-exempt incomes as follows:
Tax-exempt incomes
1. Incomes from transfer of real estate between spouses; parents and their children; adoptive parents and their adopted children; fathers-in-law or mothers-in-law and daughters-in-law or sons-in-law; grandparents and their grandchildren; or among blood siblings.
2. Incomes from transfer of residential houses, rights to use residential land and assets attached to residential land received by individuals who have only one residential house or land plot each.
3. Incomes from the value of land use rights of individuals who are allocated land by the State.
4. Incomes from receipt of inheritances or gifts that are real estate between spouses, parents and their children; adoptive parents and their adopted children; fathers-in-law or mothers-in-law and daughters-in-law or sons-in-law; grandparents and their grandchildren; or among blood siblings.
5. Incomes of households and individuals directly engaged in agricultural or forest production, salt making, aquaculture, fishing and trading of aquatic resources not yet processed into other products or preliminarily processed aquatic products.
6. Incomes from conversion of agricultural land allocated by the State to households and individuals for production.
7. Incomes from interests on deposits at credit institutions or interests from life insurance policies.
8. Incomes from foreign exchange remittances.
9. Wages paid for night shift or overtime work, which are higher than those paid for day shifts or prescribed working hours in accordance with law.
10. Retirement pensions paid by the Social Insurance Fund; retirement pensions paid monthly by the Voluntary Retirement Fund.
11. Incomes from scholarships, including:
a/ Scholarships granted from the state budget;
b/ Scholarships granted by domestic and foreign organizations under their study promotion programs.
12. Incomes from indemnities paid under life insurance policies, non-life insurance policies, compensations for labor accidents, compensations paid by the State and other compensations as provided for by law.
13. Incomes received from charity funds licensed or recognized by competent state agencies and operating for charity, humanitarian or non-profit purposes.
14. Incomes received from governmental or non-governmental foreign aid for charity or humanitarian purposes approved by competent state agencies.
15. Income from salaries, remunerations of Vietnamese crewmembers working for foreign shipping companies or Vietnamese shipping companies that provide international transport services.
16. Incomes from provision of goods/services directly serving offshore fishing earned by individuals being ship owners, individuals having the right to use ships, and incomes of crewmembers on ships.
Thus, according to the above provisions, retirement pensions are exempt from personal income tax.
Are retirement pensions subject to personal income tax in Vietnam? What are the regulations on the tax period for personal income tax in Vietnam? (Image from the Internet)
What are the regulations on the tax period for personal income tax in Vietnam?
According to the provisions of Article 7 of the 2007 Law on Personal Income Tax in Vietnam (amended by Clause 3, Article 1 of the 2012 Law on Amendments to the Law on Personal Income Tax) on the tax period as follows:
- For residents, tax period is specified as follows:
+ Annual tax period, which is applicable to incomes from business, salaries and wages.
+ Tax period upon each time of income generation, which is applicable to incomes from capital investment; incomes from capital transfer, except for incomes from securities transfer; incomes from real estate transfer; incomes from prizes; incomes from copyright; incomes from commercial franchising; incomes from inheritances; and gifts.
+ Tax period upon each transfer or annual tax period, which is applicable to incomes from transfer of securities.
In addition, for non-residents, the tax period counted upon each time of income generation is applicable to all their taxable incomes.
Are incomes other than retirement pensions subject to personal income tax?
According to the provisions of Clause 2, Article 2 of Circular No. 111/2013/TT-BTC (amended and supplemented by Article 11 of Circular No. 92/2015/TT-BTC) on personal income taxable income from wages and remunerations 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:
…
c) Remunerations in the forms of agent commission, brokerage commission, payments for participation in science and technology researches, payments for participation in projects and schemes, royalties according to regulations of law on royalties, payments for teaching, payments for participation in artistic performance, sports, payments for advertising, payments for other services, and other remunerations.
d) Payments for participation in business associations, Boards of Directors, Control Boards, project management boards, management councils, professional associations, and other organizations.
dd) Other benefits in cash or not in cash apart from wages paid to the taxpayer by the employer in any shape or form:
…
e) Rewards in cash or not in cash in any shape or form, including rewards in the form of securities, except for:
...
Thus, incomes from wages and remunerations other than retirement pensions are still subject to personal income tax.
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