I. Legal Grounds: 

1.Law on Personal Income Tax No. 04/2007/QH12 dated Nov 21, 2007

2.Law Amending And Supplementing A Number Of Articles Of The Law On Personal Income Tax No 26/2012/QH13 dated Nov 22, 2012

3. Integrated document No. 08/VBHN-VPQH dated January 25, 2022, Law on special excise duty

4. Decree No. 65/2013/ND-CP of June 27, 2013, detailing a number of articles of the Law on personal income tax and Law amending and supplementing a number of articles of the Law on personal income tax

5. Circular No 111/2013/TT-BTC On The Implementation Of The Law On Personal Income Tax, The Law On The Amendments To The Law On Personal Income Tax, And The Government's Decree No. 65/2013/Nd-Cp Elaborating A Number Of Articles Of The Law On Personal Income Tax And The Law On The Amendments To The Law On Personal Income Tax

6. Circular No. 92/2015/TT-BTC dated June 15, 2015, guidelines for VAT and personal income tax incurred by residents doing business, amendments to some articles on personal income tax of the Law No. 71/2014/QH13 on the amendments to tax Laws and the Government's Decree No. 12/2015/NĐ-CP on guidelines for the Law on amendments to tax Laws 

II. Principles for calculating personal income tax from wages/salary

II.1 Time to calculate taxable income

Taxable income from wages and remuneration shall be calculated when the income is paid to the taxpayer

II.2 Taxable income from salary/wages

Incomes from wages and remunerations (hereinafter referred to as wages) are incomes paid to employees from employers, including:

a) Wages, remunerations, and the other amounts paid as wages or remunerations in cash or not in cash.

b) Allowances and benefits

(Except for some situations, contact us for more details)

II.3 Deductions

II.3.1 Personal Deductions:

Personal deduction is the amount of money deducted from the taxable income before calculating tax on incomes from business, or wages earned by the resident taxpayer

If the resident earns income from both business and wages, one deduction from the total income from business and wages shall be made.

Levels of personal deductions

a) Deduction for the taxpayer: 11 million VND/month, 132 million VND/year.

b) Deduction for each dependant: 4.4 million VND/month.

The taxpayer that has multiple sources of income from wages and business shall calculate the personal deduction for himself in a place at a time (considered a full month)

Dependant include:

a) Children, legitimate adopted children, illegitimate children, stepchildren. To be specific:

a.1) Children under 18 years of age.

Example 10: A child of Mr. H, born on July 25, 2014, is considered a dependant from July 2014.

a.2) Children from 18 years of age and over who are disabled and incapable of work.

a.3) Children studying in Vietnam or overseas in universities, colleges, or vocational schools, including children from 18 years of age and over in high schools (including the period awaiting university enrolment result from June to September in 12th grade) that have no income or the average monthly income in the year from all sources ≤ 1,000,000 VND.

b) The taxpayer's spouse that meets the conditions in Point e below.

c) The taxpayer’s parents, parents-in-law, stepparents, and legitimate adoptive parents that meet the conditions in Point dd Clause 1 of this Article.

d) Other dependants that the taxpayer has to provide for, who meet the conditions in Point e of this Article, including:

d.1) The taxpayer’s brothers and sisters.

d.2) The taxpayer’s grandparents, aunts, uncles.

d.3) The taxpayer’s nieces and nephews.

d.4) Other people to provide for as prescribed by law.

e) A person that meets the conditions below shall be considered a dependant mentioned in Point d.2, d.3, d.4  of this Article:

e.1) The person of working age must meet all conditions below:

e.1.1) The person is disabled and incapable of work.

e.1.2) The person has no income or his average monthly income from all sources does not exceed 1,000,000 VND.

e.2) The people outside working age that have no income or their average monthly income from all sources does not exceed 1,000,000 VND.

f) The disabled that are incapable of work mentioned in Point e.1.1 of this Article are the people regulated by regulations of law on the disabled and ill people incapable of work (sufferers from AIDS, cancer, chronic kidney failure, etc.)

II.3.2. Deductions for insurance premiums and contributions to the voluntary pension fund

II.3.3. Deductible charitable donations

III. Calculating PIT Tax from wages and Salary

III.1 How to calculate PIT Tax from wages and Salary

- PIT Tax equals Assessable income multiplied by (x) the Tax rate 

PIT Tax = Assessable income x Tax rate 

- Assessable income equals taxable income minus (-) the deductions

Assessable income = Taxable income - Deductions

III. 2. Tax rate

The rate of personal income tax on incomes from wages/salary shall apply the progressive tax table in Article 22 of the Law on Personal income tax. To be specific:

Level	Assessable income/year (million VND)	Assessable income/month (million VND)	Tax rate (%)
1	Up to 60	Up to 5	5
2	Over 60 to 120	Over 5 to 10	10
3	Over 120 to 216	Over 10 to 18	15
4	Over 216 to 384	Over 18 to 32	20
5	Over 384 to 624	Over 32 to 52	25
6	Over 624 to 960	Over 52 to 80	30
7	Over 960	Over 80	35

 

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