General Department of Taxation Guides on Tax Calculation from Promotional Gifts

09:39, 11/07/2024

On May 5, 2017, the General Department of Taxation issued Official Dispatch 1802/TCT-TNCN, addressing concerns and providing guidance on personal income tax calculation for promotional gifts given to business households under promotional programs for purchasing goods.

According to the content of the response in Official Dispatch 1802/TCT-TNCN, the General Department of Taxation guides 4 Oranges Co., LTD (located at Lot C02-1, Duc Hoa 1 Industrial Park, Duc Hoa District, Long An Province) on calculating tax for product packages given to customers as stipulated in Official Dispatch 3929/TCT-TNCN dated September 23, 2015.

To be specific:

- In cases where the company gives tangible items to customers free of charge, and these items are assets that require registration of ownership or use with state management agencies, the income that customers receive is subject to personal income tax from gifts (as stipulated in point b, clause 6 and clause 10, Article 3 of the Personal Income Tax Law 2007 and point b, clause 6, Article 2 of Circular 111/2013/TT-BTC).- In cases where the company conducts promotional programs as specified in clause 5 and clause 6 of Article 92 of the Commercial Law (i.e., selling goods, providing services with attached contest tickets for customers to select winners according to the announced rules and prizes; selling goods, providing services attached to participating in games of chance where participation in the program is tied to purchasing goods or services and winning is based on the luck of the participants according to the announced rules and prizes), the individual receiving money/items from winning that exceed 10 million VND is subject to personal income tax from winnings.

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