16 incomes that are exempt from personal income tax in Vietnam

16 incomes that are exempt from personal income tax in Vietnam (Image from the Internet)

According to the provisions of Article 4 of Decree 65/2013/ND-CP, supplemented by Clause 6, Article 2 of Decree 12/2015/ND-CP, incomes are exempt from personal income tax as follows:

1. Incomes from transfer or real estate (including resident houses and construction works formed in future as prescribed by law on real estate business) 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 right to use residential land in Vietnam.

The transfer individuals who have only one residential house or right to use residential land in Vietnam as prescribed in this clause must satisfy the following conditions:

a) At the time of transfer, individuals have only right to own, right to use one residential house or one residential land plot (including case of possessing residential house or construction works attached to that land plot);

b) Duration for individuals to have right to own, right to use residential house or residential land which is counted to time of transfer is not less than 183 days;

c) Residential house or/and right to use resident land are transferred entirely;

Determination of right to own, right to use the residential house, residential land are based on certificate of right to own, right to use the residential house, residential land.  Individuals who have residential house, residential land transferred shall be responsible for declaration and take responsibilities before law for accuracy of declaration. If competent agencies detect wrong declaration, individuals will not be exempted tax and be handled as prescribed by law.

3. Incomes from value of the right to use land of individuals who are assigned land by State not required to pay money or reduced land levy shall comply with provisions of law.

4. Incomes from receipt of inheritances or gifts that are real estate (including resident houses and construction works formed in future as prescribed by law on real estate business) 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 of aquatic products not yet processed into other products or preliminarily processed.

Households and individuals directly engaged in production activities specified in this Clause must satisfy the following conditions:

a) Having lawful land or water surface use rights for production, and directly engaging in agricultural or forest production, salt making or aquaculture.  For fishing activities, they must have the right to own or use ships, boats and fishing gears and directly engaging in these activities;

b) They actually reside in localities where agricultural or forest production, salt making or aquaculture activities are conducted under the law on residence.

6. Incomes from conversion of agricultural land allocated by the State to households and individuals for production.

7. Incomes from interests on deposits at banks or credit institutions or interests from life insurance contract.

8. Incomes from foreign exchange remittances.

9. Salary or wage amounts paid for night shift and overtime work, which are higher than those paid for day shifts or prescribed working hours under law.

10. Retirement pensions that are paid by Social Insurance Fund under the Law on Social Insurance, and pensions received monthly from the voluntary retirement Fund. Individuals residing and working in Vietnam are eligible for exemption from personal income tax on pensions paid by foreign countries.

11. Incomes from scholarships, including:

a) Scholarships granted from the state budget;

b) Scholarships granted by domestic and foreign organizations (including amounts for living expenses) under study promotion programs of those organizations.

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 and non-profit purposes.

14. Incomes received from governmental or non-governmental foreign aid for charity or humanitarian purposes approved by competent state agencies.

The Ministry of Finance shall provide procedures and dossiers for identification of tax-exempt incomes stated in this Article.

15. Income from salaries/remunerations of Vietnamese crewmembers employed by foreign or Vietnamese international shipping companies;

16. Incomes of individuals being ship owners, individuals entitled to use fishing ships, and crewmembers from provision of goods/services directly serving offshore fishing.

Above is the content of regulations on income exempt from personal income tax. For more information, you can refer to Decree 65/2013/ND-CP.

Best regards!