Vietnam: Does personal income tax apply to the benefits provided by the company to employees when they return home to visit relatives?
Vietnam: Does personal income tax apply to the benefits provided by the company to employees when they return home to visit relatives?
According to Clause 2, Article 2 of Circular 111/2013/TT-BTC dated August 15, 2013, of the Ministry of Finance, the regulations on taxable personal income (PIT) from wages and salaries are as follows:
Taxable income items
...
2. Income from wages and salaries
Income from wages and salaries is income that employees receive from employers, including:
a) Wages, salaries, and income in the nature of wages and salaries in any form, whether in cash or in kind.
...
dd) Other monetary or non-monetary benefits apart from wages and salaries paid by the employer that the taxpayer benefits from in any form:
...
dd.4) Reimbursement for office stationery, travel expenses, telephone, attire,... higher than the current regulations of the State. The reimbursed amount is not included in taxable income for certain cases as follows:
dd.4.1) For officials and employees in state administrative agencies, Communist Party, mass organizations, Association: The reimbursed amount is applied according to the guidance documents of the Ministry of Finance.
dd.4.2) For employees working in business organizations, representative offices: The reimbursed amount is applied according to the applicable level for determining taxable income for corporate income tax as per the guidance documents implementing the Law on Corporate Income Tax.
...
dd.7) Other benefits.
Other benefits that the employer provides to the employee, such as: expenditures on holidays, consulting services, tax filing services for specific individuals or groups; expenditures for household helpers such as drivers, cooks, other domestic workers under contract.
...
g) The following items are not included in taxable income:
g.1) Employer support for critical illness treatment for the employee or their relatives.
g.1.1) Relatives of the employee in this case include: children (biological, adopted, illegitimate, stepchildren); spouse; biological parents; parents-in-law (or parents-in-law); stepparents; lawful adoptive parents...
Thus, in cases where an employee receives benefits in any form, whether monetary or non-monetary, from the employer, apart from those not included in taxable income as prescribed at point g, clause 2, Article 2 of Circular 111/2013/TT-BTC, such benefits are subject to personal income tax from wages and salaries as stipulated in clause 2, Article 2 of Circular No. 111/2013/TT-BTC.
Vietnam: Does personal income tax apply to the benefits provided by the company to employees when they return home to visit relatives?
Who are PIT payers in Vietnam in 2023?
According to Article 1 of Circular 111/2013/TT-BTC of the Ministry of Finance, as amended by Article 2 of Circular 119/2014/TT-BTC, the taxpayers include:
- Resident individuals:
+ Being present in Vietnam for 183 days or more in a calendar year or within 12 consecutive months from the first day of presence in Vietnam;
+ Having a permanent residence in Vietnam;
+ Having taxable income.
- Non-resident individuals with taxable income.
According to clause 4, Article 1 of Circular 111/2013/TT-BTC, the taxpayers include:
- Individuals with Vietnamese nationality (including those who are sent abroad for business, labor, or studies and have taxable income);
- Individuals without Vietnamese nationality but with taxable income (including: foreigners working in Vietnam, foreigners not present in Vietnam but having taxable income arising in Vietnam).
What are the 10 taxable incomes in Vietnam?
According to Article 2 of Circular 111/2013/TT-BTC, taxable incomes include:
- Income from business;
- Income from wages and salaries;
- Income from capital investment;
- Income from capital transfer;
- Income from real estate transfer;
- Income from winnings;
- Income from copyright;
- Income from franchising;
- Income from inheritance;
- Income from gifts.
Thus, when a resident or non-resident in Vietnam, according to Article 1 of Circular 111/2013/TT-BTC, if incurred, is liable to pay personal income tax in 2023 if they have income falling within the 10 aforementioned cases.
LawNet
