What is calculation of personal income tax in 2024 of a resident individual with an employment contract with a term of 3 months or more in Vietnam?

Who are personal income taxpayers in Vietnam?

Pursuant to Article 2 of the Personal Income Tax Law 2007, it stipulates that taxpayers:

Taxpayers

1. Personal income taxpayers include residents who earn taxable incomes specified in Article 3 of this Law inside and outside the Vietnamese territory and non-residents who earn taxable incomes specified in Article 3 of this Law inside the Vietnamese territory.

2. Resident means a person who satisfies one of the following conditions:

a/ Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of their presence in Vietnam;

b/ Having a place of habitual residence in Vietnam, which is a registered place of permanent residence or a rented house for dwelling in Vietnam under a term rent contract.

3. Non-resident means a person who does not satisfy any of the conditions specified in Clause 2 of this Article.

Thus, personal income taxpayers are residents who earn taxable incomes inside and outside the Vietnamese territory and non-residents who earn taxable incomes inside the Vietnamese territory.

A resident individual subject to personal income tax in Vietnam is a person who meets one of the following conditions:

- Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of their presence in Vietnam;

- Having a place of habitual residence in Vietnam, which is a registered place of permanent residence or a rented house for dwelling in Vietnam under a term rent contract.

A non-resident individual is a person who does not meet the above conditions.

What is calculation of personal income tax in 2024 of a resident individual with an employment contract with a term of 3 months or more in Vietnam? (Image from the Internet)

What is calculation of personal income tax in 2024 of a resident individual with an employment contract with a term of 3 months or more in Vietnam?

Pursuant to Article 7 of Circular 111/2013/TT-BTC, income tax for resident individuals with labor contracts with a term of 3 months or more and income from wages is calculated as follows:

Personal income tax on income from salaries and wages is the total tax calculated for each income level.

Tax amount calculated at each level = Taxable income of level x corresponding tax rate of income level

Taxable income = Total income - tax exempt items - deductible items

In particular, deductions include personal deductions, insurance premiums, contributions to the voluntary pension fund, and charitable donations as guided in Article 9 of this Circular.

Income tax rates for resident individuals with labor contracts with a term of 3 months or more and income from wages are applied according to the Partial Progressive Tax Schedule as follows:

In what cases can individuals receive a personal income tax refund in Vietnam?

Article 8 of the Personal Income Tax Law 2007 regulates tax administration and tax refund:

Tax administration and tax refund

1. Tax registration, declaration, withholding, payment, finalization and refund, handling of violations of the tax law, and tax administration measures comply with legal provisions on tax administration.

2. Individuals are entitled to tax refund in the following cases:

a/ Their paid tax amounts are larger than payable tax amounts;

b/ They have paid tax but their taxed incomes do not reach a tax-liable level;

c/ Other cases decided by competent state agencies.

According to the above regulations in Vietnam, individuals are entitled to a personal income tax refund in the following cases:

- The tax amount paid is greater than the tax amount payable;

- Individuals who have paid taxes but have taxable income that is not enough to pay tax;

- Other cases as decided by competent state agencies.

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