What is progressive or whole personal income tax calculation for the 13th month salary after resigning in Vietnam?

What is progressive or whole personal income tax calculation for the 13th month salary after resigning in Vietnam?

We have an employee who has been working for a long time under a 36-month contract. The contract has not yet ended, but at the end of December, he resigned. However, to recognize your contribution, we still pay you your 13th month salary in the January salary period of the following year. This salary is calculated according to personal income tax on a progressive or whole basis. Because at this time, you have retired. it's done.

Reply:

Pursuant to the provisions in Point b, Clause 2, Article 8 of Circular 111/2013/TT-BTC:

b) Time to calculate taxable income:

Taxable income from wages and remuneration shall be calculated when the income is paid to the taxpayer.

The taxable income from accrued insurance premium guided in Point dd.2 Clause 2 Article 2 of this Circular shall be calculated when the insurer or the voluntary pension fund pays the insurance money.

Thus, the time to determine taxable income in the case of your company's employees is the time of salary payment in January of the following year.

At the same time, Point b.2, Clause 1, Article 25 of Circular 111/2013/TT-BTC also stipulates:

b.2) The income payer shall still withhold tax from the incomes earned residents that sign labor contracts for 03 months but resign before such labor contracts expire according to the progressive tax table.

According to this regulation in Vietnam, in case your company's employees stop working before the end of the labor contract, when paying the 13th month salary, your company will still deduct tax according to the Partial Progressive Tax Schedule.

What is progressive or whole personal income tax calculation for the 13th month salary after resigning in Vietnam? (Image from the Internet)

Is holiday work income subject to personal income tax in Vietnam?

Please ask: According to regulations, is the salary for working on holidays subject to personal income tax? Look forward to receiving your feedback.

Reply:

According to the provisions of Point i, Clause 1, Article 3 of Circular 111/2013/TT-BTC, specifically as follows:

i) Incomes from the additional payments for working at night or working overtime in excess of wages according to the Labor Code. In particular:

i.1) Tax-free additional payments for working at night or working overtime shall be identified according to the actual total payment for working at night or overtime minus (-) the payment for an ordinary working day.

Example 2: The wages of Mr. A on an ordinary working day is 40,000 VND/hour.

- When working overtime on an working day, he is paid 60,000 VND/hour, thus the tax-free income is:

60,000 VND/hour – 40,000 VND/ hour = 20,000 VND/ hour

- When working overtime on an holiday, he is paid 80,000 VND/hour, thus the tax-free income is:

80,000 VND/hour – 40,000 VND/ hour = 40,000 VND/ hour

i.2) The organization or person that pays incomes (hereinafter referred to as income payer) shall make a table specifying the hours of night work, extra hours, additional payments for working at nights and overtime. This table shall be presented by the income payer at the request of the tax authority.

Thus, holiday pay is divided into two taxable and tax-exempt parts. The tax calculation part is the income according to the normal working day rate. The portion higher than the normal workday rate is exempt from tax in Vietnam.

Therefore: The portion of holiday income calculated for personal income tax is determined as follows:

- 100% salary: Must be included in the employee's monthly income to deduct personal income tax according to regulations.

- 300% of salary: Exempt from personal income tax, so it is not included in the employee's monthly income to deduct personal income tax.

Can I declare personal income tax on behalf of someone else in Vietnam?

Hello, I have the following content to answer: My husband and I have common property which is an existing house. In 2018, my husband and I no longer agreed, so we requested a divorce but did not request property division. In 2019, due to business losses, my husband was sued in Court and the Court asked him to execute a judgment of 10 billion. The house owned jointly by me and my husband is 8 billion. I want to buy back my husband's ownership of this house. However, my husband is serving a prison sentence, so I want to ask if I can declare personal income tax on his behalf?

Reply:

Pursuant to Point a.5, Clause 3, Article 26 of Circular 111/2013/TT-BTC:

a.5) If an organization/person declares personal income tax on real estate transfer on behalf of another person, such organization/person shall state “On behalf of the taxpayer or the taxpayer's legal representative”, sign, write the full name, and append the organization’s seal (if any). The taxpayer in the tax return and tax receipts is still the person that transfers real estate.

Thus, you can declare personal income tax on behalf of your husband. When declaring on your behalf, you add "Declaration on behalf of" in front of the phrase "Taxpayer or Legal representative of the taxpayer" At the same time, the declarant signs and clearly writes his full name in Vietnam.

Above is the support content.

Best regards!