When calculating personal income tax for 2013, the total taxable income of 2013 (calculated for 12 months) will be taken, minus the total deductions for the first 6 months and the last 6 months, then multiplied by the tax rate.
Article table of contents
Law on Amending and Supplementing a Number of Articles of the Law on Personal Income Tax of 2012 takes effect from July 1, 2013. Taxable income arising from July 1, 2013 onwards will apply the provisions of the Amended Personal Income Tax Law 2012 for calculation. Taxable income arising before July 1, 2013 will apply the Personal Income Tax Law of 2007.
The family deduction levels in these two laws are different. To be specific:
According to Article 19 of the Personal Income Tax Law of 2007, the family deduction for the taxpayer is 4 million VND/month (48 million VND/year) and the deduction for each dependent is 1.6 million VND/month.
According to Clause 4, Article 1 of the Amended Personal Income Tax Law of 2012, the deduction for taxpayers is 9 million VND/month (108 million VND/year) and the deduction for each dependent is 3.6 million VND/month.
Point a, Clause 1, Article 7 of the Personal Income Tax Law 2007 stipulates: For income from business, income from wages, and salaries, the tax calculation period is annual. With this regulation, when calculating personal income tax in 2013, the total taxable income of 2013 (calculated for 12 months) will be subtracted by the total deductions for the first 6 months and the last 6 months, then multiplied by the tax rate. Therefore, the way your company resolves this issue is not in accordance with the law on the tax calculation period.
Furthermore, to implement the law uniformly, the General Department of Taxation issued Official Dispatch 336/TCT/TNCH on January 24, 2014, providing guidance on settling personal income tax for 2013. To be specific:
In Clause 2, Section IV, guiding the deductions for taxpayers, the total deductions for the whole of 2013 include the total deductions for the first 6 months and the last 6 months. Taxable income equals total taxable income minus total deductions, then multiplied by the tax rate.
With the above regulations, your 2013 personal income tax will be calculated as follows: total taxable income of 108 million VND minus total deductions. To be specific: (4 million VND + 1.6 million VND) x 6 months + (9 million VND + 3.6 million VND) x 6 months = 109.2 million VND.
Thus, in 2013 your income of 108 million VND, which is less than the deductions (109.2 million VND), means you are not subject to personal income tax.
Source: Vnexpress.net
