What is the time for determination of taxable personal income from salaries and wages in Vietnam?
What is the time for determination of taxable personal income from salaries and wages in Vietnam?
According to Article 32 of the Law on Personal Income Tax 2007, the time of determination for taxable income is as follows:
Article 32. Time of determination of taxable income
- The time of determination of taxable income for the income specified in Article 25 of this Law is the time when the non-resident individual receives the income or the time when the invoice for the sale of goods, provision of services is issued.
2. The time of determination of taxable income for the income specified in Articles 26, 27, 30, and 31 of this Law is the time when the organization or individual in Vietnam pays income to the non-resident individual or when the non-resident individual receives income from an organization or individual abroad.
- The time of determination of taxable income for the income specified in Articles 28 and 29 of this Law is the time when the transfer contract becomes effective.
According to Article 26 of the Law on Personal Income Tax 2007, tax on income from salaries and wages is as follows:
Article 26. Tax on income from salaries and wages
- Tax on income from salaries and wages of non-resident individuals is determined by multiplying the taxable income from salaries and wages specified in Clause 2 of this Article by the tax rate of 20%.
- Taxable income from salaries and wages is the total amount of salaries and wages that non-resident individuals receive for performing work in Vietnam, regardless of where the income is paid.
According to the above regulations, the time for determining the taxable income for individual income tax from salaries and wages is the time when the organization or individual in Vietnam pays income to the non-resident individual or the time when the non-resident individual receives income from an organization or individual abroad.
What is the time for determination of taxable personal income from salaries and wages in Vietnam? (Image from the Internet)
What is the tax period for income from salaries and wages in Vietnam?
According to Article 7 of the Law on Personal Income Tax 2007 (amended by Clause 3 Article 1 of the Law on Amendments to the Law on Personal Income Tax 2012), the tax period is as follows:
Article 7. Tax period
- The tax period for resident individuals is prescribed as follows:
a) Annual tax period applicable to income from business; income from salaries and wages;
b) Tax period per occurrence of income applicable to income from capital investment; income from transfer of capital, except income from transfer of securities; income from transfer of real estate; income from winnings; income from royalties; income from franchising; income from inheritance; income from gifts;
c) Tax period per transfer or annually for income from transfer of securities.
- The tax period for non-resident individuals is calculated for each occurrence of taxable income applicable to all taxable income.
Thus, the tax period for individual income tax on income from salaries and wages for resident individuals is calculated annually. For non-resident individuals, the tax period is calculated for each occurrence of taxable income applicable to all taxable income.
Which allowances from salaries and wages are not subject to personal income tax in Vietnam?
According to Clause 2 Article 3 of the Law on Personal Income Tax 2007 (amended by Clause 1 Article 1 of the Law on Amendments to the Law on Personal Income Tax 2012), taxable income is stipulated as follows:
Article 3. Taxable income
Taxable income for personal income tax includes the following types of income, except income exempt from tax as provided in Article 4 of this Law:
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- Income from salaries and wages, including:
a) Salaries, wages, and amounts of a salary or wage nature;
b) Allowances and subsidies, except for: allowances and subsidies in compliance with the law on preferential treatment for people with meritorious services; defense and security allowances; hazardous, dangerous allowances for industries, occupations, or jobs at workplaces with hazardous, dangerous factors; attraction allowances, regional allowances as stipulated by law; extraordinary difficulty allowances, work accident subsidies, occupational disease subsidies, one-time allowances when giving birth or adopting a child, allowances due to reduction of working capacity, one-time retirement subsidies, monthly survivorship pensions, and other subsidies as prescribed by the law on social insurance; severance pay, job loss allowances as stipulated by the Labor Code; social welfare allowances and other allowances, subsidies not of a salary or wage nature as stipulated by the Government of Vietnam.
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According to the above regulations, allowances from salaries and wages not subject to personal income tax include:
- Allowances, subsidies in compliance with the law on preferential treatment for people with meritorious services
- Defense and security allowances
- Hazardous, dangerous allowances for industries, occupations, or jobs at workplaces with hazardous, dangerous factors
- Attraction allowances, regional allowances as stipulated by law
- Extraordinary difficulty allowances, work accident subsidies, occupational disease subsidies, one-time allowances when giving birth or adopting a child, allowances due to reduction of working capacity, one-time retirement subsidies, monthly survivorship pensions, and other subsidies as prescribed by the law on social insurance
- Severance pay, job loss allowances as stipulated by the Labor Code
- Social welfare allowances
- Other allowances and subsidies not of a salary or wage nature as stipulated by the Government of Vietnam.
