Who is subject personal income tax in Vietnam?

Who is subject personal income tax in Vietnam? (Internet image) 

1. Who is subject personal income tax in Vietnam?

Personal income taxpayers include:

- Residents who earn taxable incomes specified in Section 2 inside and outside the Vietnamese territory;

- Non-residents who earn taxable incomes specified in Section 2 inside the Vietnamese territory.

2. Personal income taxable incomes in Vietnam

Incomes liable to personal income tax include the following kinds of income, except for incomes eligible for tax exemption specified in Section 3:

- Incomes from business include:

+ Incomes from manufacturing, sale of goods or services;

+ Income from freelance works of individuals having licenses or practicing certificates as prescribed by law.

A sole trader’s income of VND 100 million per year or less is not considered income from business prescribed in this Clause.

- Incomes from salaries and wages, including:

+ Salaries, wages and amounts of similar nature;

+ Allowances, subsidies, except for amounts:

++ Those paid 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 specified in the labor code;

++ Subsidies of social relief nature and other allowances, subsidies without nature of salaries, wages as prescribed by the government.- Incomes from capital investment, including:

- Incomes from capital transfer, including:

+ Incomes from transfer of capital holdings in economic organizations;

+ Incomes from transfer of securities;

+ Incomes from transfer of capital in other forms.

- Incomes from transfer of real estate, including:

+ Incomes from transfer of rights to use land and assets attached to land;

+ Incomes from transfer of right to own or use residential houses;

+ Incomes from transfer of right to lease land or water surface;

+ Other incomes earned from transfer of real estate under any form.

- Incomes from won prizes, including:

+ Lottery winnings;

+ Sales promotion winnings;

+ Prizes won from betting;

+ Winnings in prized games and contests and other forms of winning.

- Incomes from copyright, including:

+ Incomes from assignment or licensing of intellectual property objects;

+ Incomes from technology transfer.

- Incomes from commercial franchising.

- Incomes from inheritances that are securities, capital holdings in economic organizations or business establishments, real estate and other assets subject to ownership or use registration.

- Incomes from gifts that are securities, capital holdings in economic organizations or business establishments, real estate and other assets subject to ownership or use registration.

3. Personal income tax-exempt incomes in Vietnam

Incomes exempt from personal income tax include:

- 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, including:

+ Scholarships granted from the state budget;

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

- 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.

Legal basis: Articles 2, 3, 4 of the Law on Personal Income Tax 2007, as amended in 2012, 2014.

Diem My

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