Personal income tax exemption for individuals generating revenues from business start-up enterprises in HCMC, Vietnam

Personal income tax exemption for individuals generating revenues from business start-up enterprises in HCMC, Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

Personal income tax exemption for individuals generating revenues from business start-up enterprises in HCMC, Vietnam

On February 2, 2024, the Government issued Decree 11/2024/ND-CP on loan interest, fair return, payment methods, settlement of investment projects under BT contracts; exemption from corporate income tax, personal income tax in Ho Chi Minh city

During the effective period of Resolution 98/2023/QH15, individuals generating revenues from transfer of capital, right to capital contribution to business start-up enterprises in Ho Chi Minh City shall be eligible for PIT exemption for these revenues.

Business start-up enterprises in Ho Chi Minh City under this Clause must meet regulations of People’s Council of Ho Chi Minh City on priority sectors; criteria, conditions, and details of business start-up and renovation operations.

Revenues generated from transfer of capital, right to capital contribution under this Clause mean revenues generated by partial or total transfer of capital, right to capital contribution to business start-up enterprises in Ho Chi Minh City (including merger and acquisition of enterprises), except for revenues generated from the transfer of shares, bonds, fund certificates, and other securities as per the law.

In case of total acquisition of single-member limited liability companies owned by individuals in form of transfer of capital attached to immovable property, PIT shall be declared and paid in accordance with immovable property transfer.

Note: Determination of revenues generated by transfer of capital, right to capital contribution and declaration to tax authority shall conform to personal income tax and tax administration laws.

(Article 14 of Decree 11/2024/ND-CP)

16 personal income tax-exempt incomes in Vietnam 2024

According to Article 4 of the Law on Personal Income Tax 2007 (amended in 2012), personal income tax-exempt incomes includes:

(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.

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

(7) Incomes from interests on deposits at credit institutions or interests from life insurance policies.

(8) Incomes from foreign exchange remittances.

(9) 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.

(10) Retirement pensions paid by the Social Insurance Fund; retirement pensions paid monthly by the Voluntary Retirement Fund.”

(11) Incomes from scholarships, including:

- Scholarships granted from the state budget;

- Scholarships granted by domestic and foreign organizations under their study promotion programs.

(12) 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.

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

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

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE