Which allowances from salaries and wages are exempt from personal income tax in Vietnam? Which incomes are exempt from personal income tax in Vietnam?

Which allowances from salaries and wages are exempt from personal income tax in Vietnam?

Pursuant to Clause 2 Article 3 of the Law on Personal Income Tax in 2007 (amended by Clause 1 Article 1 of the Law on amendments to the Law on Personal Income Tax in 2012) stipulating allowances eligible for tax exemption:

- Allowances, subsidies under legal provisions on preferential treatment of persons with meritorious services;

- Defense or security allowances;

- Hazard or danger allowances for persons working in branches, occupations or jobs at places where exist hazardous or dangerous elements;

- Allowances for attraction of laborers to work in certain branches or in certain regions specified by law;

- Allowances for sudden difficulties;

- Allowances for laborers having labor accident or suffering from occupational disease;

- Lump-sum maternity or child adoption allowances;

- Allowances for working capacity loss

- Lump-sum retirement allowances, monthly survivorship allowances and other allowances as prescribed by law on social insurance;

- Severance and job-loss allowances;

- Subsidies of social relief nature and other allowances, subsidies without nature of salaries, wages as prescribed by the Government.

Which allowances from salaries and wages are exempt from personal income tax in Vietnam? Which incomes are exempt from personal income tax in Vietnam? - image from internet

Which incomes are exempt from personal income tax in Vietnam?

Pursuant to Article 4 of the Law on Personal Income Tax in 2007 (amended by Clause 3 Article 2 of the Law on amendments to Tax Laws in 2014 and Clause 2 Article 1 of the Law on amendments to the Law on Personal Income Tax in 2012) stipulating tax-exempt incomes:

Tax-exempt incomes

1. Incomes from transfer of real estate 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 land plot each.

3. Incomes from the value of land use rights of individuals who are allocated land by the State.

4. Incomes from receipt of inheritances or gifts that are real estate 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 and trading of aquatic resources not yet processed into other products or preliminarily processed aquatic products.

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As regulated above, following incomes are exempt from personal income tax in Vietnam:

- Incomes from transfer of real estate 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.

- 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 land plot each.

- Incomes from the value of land use rights of individuals who are allocated land by the State.

- Incomes from receipt of inheritances or gifts that are real estate 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.

- Incomes of households and individuals directly engaged in agricultural or forest production, salt making, aquaculture, fishing and trading of aquatic resources not yet processed into other products or preliminarily processed aquatic products.

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

- Incomes from interests on deposits at credit institutions or interests from life insurance policies.

- Incomes from foreign exchange remittances.

- Wages paid for night shift or overtime work, which are higher than those paid for day shifts or prescribed working hours in accordance with law.

- Retirement pensions paid by the Social Insurance Fund; retirement pensions paid monthly by the Voluntary Retirement Fund.

- Incomes from scholarships.

- 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.

- Incomes received from charity funds licensed or recognized by competent state agencies and operating for charity, humanitarian or non-profit purposes.

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

- Income from salaries, remunerations of Vietnamese crewmembers working for foreign shipping companies or Vietnamese shipping companies that provide international transport services.

- Incomes from provision of goods/services directly serving offshore fishing earned by individuals being ship owners, individuals having the right to use ships, and incomes of crewmembers on ships.

Who are entitled to tax refund in Vietnam?

Pursuant to Article 8 of the Law on Personal Income Tax in 2007 stipulating 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.

As regulated above, individuals are entitled to tax refund in the following cases:

- Their paid tax amounts are larger than payable tax amounts;

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

- Other cases decided by competent state agencies.

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