When do lottery winners have to pay personal income tax in Vietnam? How to calculate personal income tax on income from winning prizes according to Circular 111?
When do lottery winners have to pay personal income tax in Vietnam?
Pursuant to the provisions in Clause 1, Article 15 of Circular 111/2013/TT-BTC on tax bases for income from winning prizes as follows:
Basis for calculating tax on incomes from winning prizes
The basis for calculating tax on incomes from prizes is the assessable income and tax rate.
1. Assessable income
The assessable income from a prize is the excess over 10 million VND of the prize the taxpayer receives, regardless of the number of payments being made.
If a prize is won by multiple people, the assessable income shall be divided among the prizewinners. The prizewinners shall present legal evidence. If no legal evidence is provided, the prize is considered won by one person. Where a person win multiple prizes in a game, the assessable income is calculated based on the total value of prizes.
Thus, according to the above regulations, if the prize is the excess over 10 million VND, the lottery winner must pay personal income tax (PIT).
When do lottery winners have to pay personal income tax in Vietnam? How to calculate personal income tax on income from winning prizes according to Circular 111? (Image from the Internet)
How to calculate personal income tax on income from winning prizes in Vietnam according to Circular 111?
Pursuant to the provisions of Article 15 of Circular 111/2013/TT-BTC, the calculation of personal income tax for income from lottery winnings exceeding 10 million VND is calculated as follows:
(1) Formula
Personal income tax payable = Taxable income x Tax rate 10% = (Lottery winning amount - 10 million VND) x 10%
For example: Ms. T (Ben Tre) won 2 billion in the lottery, her personal income tax payment is calculated as follows:
Personal income tax payable = (2 billion - 10 million VND) x 10% = 199 million VND.
(2) Taxable income
The taxable income for lottery winnings is the entire prize value exceeding 10 million VND on one (01) lottery ticket received in a drawing without any deductions.
(3) Time to determine taxable income
The time to determine taxable income for income from winning prizes is the time the organization or individual pays the prize to the winner.
How many days does it take to receive prizes of the winning lottery tickets in Vietnam?
Pursuant to the provisions in Article 30 of Circular 75/2013/TT-BTC as follows:
Time limit for receiving prizes and duration of paying prizes
1. Time limit for receiving prizes of the winning lottery tickets is 30 days, from date of defining result of winning prizes or expiry date of circulating lottery ticket. Pass this time limit, the winning lottery tickets are no longer valid for receiving prizes.
2. Lottery companies pay prizes at head offices, branches, representative offices and the authorized lottery agents.
3. Duration of payment for the winning lottery tickets of lottery companies to the lottery winner is not later than 05 working days, after receiving request for prizes of customers.
4. In cases arising disputes, complaints, duration for payment may be prolonged until having official conclusion of competent state agencies.
Thus, according to the above regulations, the time limit for receiving prizes of the winning lottery tickets is 30 days, from date of defining result of winning prizes or expiry date of circulating lottery ticket.
Pass this time limit, the winning lottery tickets are no longer valid for receiving prizes.
Besides, lottery winners also need to save the conditions for prizes of the winning lottery tickets as follows:
Conditions of lottery tickets receiving prizes
1. Lottery tickets receiving prizes must be in intact of form, size, not be torn, no patchwork, not erased, repaired and still in time limit for receiving prizes as prescribed.
In case due to objective reasons, the winning lottery tickets are torn but still have sufficient grounds to identify the initial form, authenticity of tickets, not belong to subjects of doubting on fraudulence, the torn position not influencing to elements for defining on winning prizes, lottery companies may verify and decide the payment for prizes or refusal for paying prizes to customers. Competence for decision is chairmen, General Directors (Directors) of lottery companies specified in the rules on participating in winning lottery specified in Article 8 of this Circular.
2. Based on provision mentioned above, lottery companies shall specify conditions of tickets receiving prizes, cases where the torn tickets and torn positions are considered and verified to decide payment for prizes or refusal for paying prizes to customers in the Rules on participating in winning lottery.
Thus, lottery tickets to receive prizes must meet the above conditions. Lottery tickets receiving prizes must be in intact of form, size, not be torn, no patchwork, not erased, repaired and still in time limit for receiving prizes as prescribed.
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