What incomes from wages and salaries are taxable in Vietnam in 2024?
What incomes from wages and salaries are taxable in Vietnam in 2024?
Based on Article 3 of the Personal Income Tax Law 2007 amended by Clause 1; Clause 2 Article 2 of the Law on Amendments to Tax Laws 2014 and Clause 1 Article 1 of the Amended Personal Income Tax Law 2012, taxable income includes:
Taxable Income
Taxable personal income includes the following types of income, excluding tax-exempt income as stipulated in Article 4 of this Law:
- Income from business activities, including:
a) Income from production and business activities of goods and services;
b) Income from independent professional activities of individuals with licenses or practicing certificates as prescribed by law.
Income from business activities specified in this clause does not include income of business individuals with annual revenue of 100 million VND or less.
- Income from wages and salaries, including:
a) Wages, salaries, and amounts with the nature of wages and salaries;
b) Allowances and subsidies, excluding: allowances, subsidies according to the law for individuals with meritorious services to the nation; defense and security allowances; hazardous, dangerous allowances for occupations or jobs in places with hazardous and dangerous conditions; attraction allowances, regional allowances according to the law; sudden difficulty allowances, labor accident subsidies, occupational disease subsidies, one-time allowance upon childbirth or adoption, allowances due to reduced working capacity, one-time retirement allowances, monthly survivorship allowance and other allowances according to the law on social insurance; severance allowances, unemployment allowances according to the Labor Code; social protection-type allowances and other allowances, subsidies not of the nature of wages and salaries according to the regulations of the Government of Vietnam.
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Thus, taxable income from wages and salaries includes wages, salaries, amounts of the nature of wages and salaries, and allowances and subsidies.
However, the following allowances and subsidies are not subject to personal income tax:
- Allowances, subsidies according to the law for individuals with meritorious services to the nation- Defense and security allowances- Hazardous and dangerous allowances for occupations or jobs in places with hazardous and dangerous conditions- Attraction allowances, regional allowances according to the law- Sudden difficulty allowances, labor accident subsidies, occupational disease subsidies, one-time allowance upon childbirth or adoption, allowances due to reduced working capacity, one-time retirement allowances, monthly survivorship allowance, and other allowances according to the law on social insurance- Severance allowances, unemployment allowances according to the Labor Code- Social protection-type allowances and other allowances, subsidies not of the nature of wages and salaries according to the regulations of the Government of Vietnam.
What incomes from wages and salaries are taxable in Vietnam in 2024? (Image from the Internet)
How much annual tax arising after personal income tax settlement from wages and salaries is exempt from tax in Vietnam?
Based on Article 79 of the Tax Administration Law 2019, which regulates tax exemption and reduction:
Tax Exemption and Reduction
Tax exemption and reduction are carried out according to the provisions of tax law and Clause 2 of this Article.
Tax exemption applies to the following cases:
a) Households and individuals subject to non-agricultural land use tax with annual tax payable of 50,000 VND or less;
b) Individuals with annual tax payable arising after finalizing personal income tax from wages and salaries of 50,000 VND or less.
According to the above regulation, individuals with annual tax payable arising after finalizing personal income tax from wages and salaries of 50,000 VND or less are exempt from personal income tax.
Where does a taxpayer with tax obligations arising from the settlement of personal income tax submit the tax return in Vietnam?
Based on Article 45 of the Tax Administration Law 2019, which regulates the place of filing tax returns:
Place of Submitting Tax Returns
Taxpayers submit tax returns with the tax authority directly managing them.
In cases of filing tax returns via the one-stop-shop mechanism, the place of filing tax returns shall follow the regulations of that mechanism.
The place of filing tax returns for exported and imported goods shall follow the provisions of the Customs Law.
The Government of Vietnam shall regulate the place of filing tax returns for the following cases:
a) Taxpayers with multiple production and business activities;
b) Taxpayers conducting production and business in multiple locations; taxpayers with tax obligations for types of taxes declared and paid each time they arise;
c) Taxpayers with tax obligations for revenues from land; the issuance of extraction rights for water resources and mineral resources;
d) Taxpayers with tax obligations arising from the settlement of personal income tax;
dd) Taxpayers filing tax returns via electronic transactions and other necessary cases.
According to the above regulation, taxpayers with tax obligations arising from the settlement of personal income tax shall submit tax returns at the place prescribed by the Government of Vietnam.
