Progressive tariff regarding personal income tax in Vietnam 2023

Progressive tariff regarding personal income tax in Vietnam 2023 (Internet image)

1. Personal income taxpayers in Vietnam 2023

In Article 2 of the Law on Personal Income Tax 2007 amended in 2012, the taxpayers are as follows:

- Personal income taxpayers include residents who earn taxable incomes specified in Article 3 of this Law inside and outside the Vietnamese territory and non-residents who earn taxable incomes specified in Article 3 of this Law inside the Vietnamese territory.

- Resident means a person who satisfies one of the following conditions:

+ Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of their presence in Vietnam;

+ Having a place of habitual residence in Vietnam, which is a registered place of permanent residence or a rented house for dwelling in Vietnam under a term rent contract.

- Non-resident means a person who does not satisfy any of the conditions specified in Clause 2 of this Article.

2. Personal income tax-exempt incomes in Vietnam 2023

Article 4 of the Law on Personal Income Tax 2007 stipulates personal income tax-exempt incomes as follows:

- 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.

- 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.

3. Partially progressive tariff in Vietnam

Article 22 of the Law on Personal Income Tax 2007 amended in 2012 stipulates partially progressive tariff as follows:

- The partially progressive tariff applies to taxed incomes specified in Clause 1, Article 21 of the Law on Personal Income Tax 2007.

- The partially progressive tariff is specified below:

4. Whole income tariff in Vietnam

Article 23 of the Law on Personal Income Tax 2007 stipulates whole income tariff  as follows:

- The whole income tariff applies to taxed incomes specified in Clause 2, Article 21 of the Law on Personal Income Tax 2007.

- The whole income tariff is specified below:

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