Individuals earning 22 million VND/month (if there are 2 dependents) have not yet paid personal income tax

With the adjustment to increase the deduction for the taxpayer himself from 9 million VND to 11 million VND/month and for each dependent from 3.6 million VND to 4.4 million VND/month, people with income from salary and wages are 17 million VND/month (if there is 1 dependent) or 22 million VND/month (if there are 2 dependents) not yet subject to personal income tax (PIT).

Individuals are entitled to deductions from social insurance, health insurance, unemployment insurance, except for family circumstances deduction, charitable and humanitarian contributions, deductible allowances and allowances (if any). )... the remaining amount is the income used as a basis for PIT calculation.

According to the Ministry of Finance, for individuals who are employees affected by the COVID-19 epidemic, if they lose their jobs, have no income or have income that is not enough to pay tax, they do not have to pay tax. Unexpected hardship allowances, severance allowances, job loss allowances... are also not included in the individual's taxable income.

According to the Tax Policy Department (Ministry of Finance), with the adjustment to increase the deduction for the taxpayer himself from 9 million VND to 11 million VND/month and for each dependent from 3.6 million VND to 4, 4 million/month, the person who earns income from salary or wages is 17 million dong/month (if there is 1 dependent) or 22 million dong/month (if there are 2 dependents) does not have to pay personal income tax. In case an individual earns more than 17 million VND/month or 22 million VND/month, the tax payable is also very small compared to the individual's income.

For example, in case an individual has a salary or salary of 17 million VND/month and has 1 dependent, if subtracting social insurance, health insurance, unemployment insurance... This is not subject to PIT. Specifically, the principle is calculated as follows: compulsory insurance 10.5% (8% social insurance + 1.5% health insurance + 1% unemployment insurance) is 1,785 million VND (17 million VND). x 10.5%), the deduction for family circumstances is 15.4 million VND (11 million for self + 4.4 million for dependents), a total of 17.2 million VND. Therefore, this individual does not have to pay PIT.

On June 2, 2020, the National Assembly Standing Committee approved the Resolution No. 954/2020/UBTVQH14 on adjusting the personal income tax deduction and applying from the 2020 tax period. Accordingly, the adjustment Adjusting to raise the deduction for personal income tax deductions will contribute to reducing tax obligations for taxpayers, and the payable tax amount will be reduced for all subjects who are paying PIT from salaries and wages.

At the same time, according to the provisions of the current Personal Income Tax Law, individuals are entitled to deductions from social insurance, health insurance, unemployment insurance, except for family circumstances deductions, charitable and humanitarian contributions. , allowances and allowances are deducted (if any)... the remaining amount is the income used as a basis for PIT calculation.

There is also 1 dependent, if the individual has an income of 18 million dong, minus 10.5% insurance is 1.89 million dong, the deduction for family circumstances is 15.4 million dong, the tax must be (18) million dong - 1.89 million dong - 15.4 million dong) x 5% = 35,000 dong/month, the tax amount is very small compared to the income of 18 million dong/month, accounting for only 0.19% of total revenue individual input.

Therefore, an individual with an income of 18 million VND/month will only pay 35,000 VND/month in tax. In case there are other allowances or subsidies that are deducted before tax calculation, the payable tax amount will be even lower (or not payable). Income after tax is expended income: total income is 18 million VND - PIT (35 thousand VND), the remaining 17 million 965 thousand VND.

In case an individual has 2 dependents, the individual's salary and wage income is 22 million VND/month, if excluding social insurance, health insurance, unemployment insurance... then this person do not have to pay personal income tax. Specifically, the 10.5% compulsory insurance (8% social insurance + 1.5% health insurance + 1% unemployment insurance) is 2.31 million VND (22 million VND x 10.5%). ), the deduction for family circumstances is VND 19.8 million (02 dependents), a total of VND 22.1 million. Therefore, there is no need to pay PIT.

If an individual has an income of 23 million VND/month, after paying compulsory insurance and reducing family circumstances, he will only pay PIT of 39,000 500 VND/month. This is a very small amount of tax, accounting for only about 0.17% of an individual's total income.

If an individual has an income of VND 30 million/month, pays compulsory insurance of VND 3.13 million, reduces family circumstances for 2 people (deduction of VND 19.8 million), the taxable income is 30 - 3. 13 - 19.8 = 7.07 million VND/month. The tax rate to be paid is Level 1 (5 million VND x 5%) is 250,000 VND, level 2 [(7.07 - 5) x 10%] rounded to 210 thousand VND. Total tax payable is 460 thousand VND/month.

Therefore, an individual with an income of 30 million VND/month only pays 460,000 VND/month, the PIT ratio on total income is about 1.53%. In case there are other allowances or subsidies that are deducted before tax calculation, the payable tax amount will be even lower. Income after tax is the income to be spent: 30 million VND - paying PIT (460 thousand VND) = 29 million 540 thousand VND.

Sun Truong

Source: Tổng cục Thuế

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