Personal Income Tax in Vietnam
Table of contents:
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
Personal Income Tax (PIT) is a direct tax levied on individuals with high income (for salaries, wages) or taxable income (for other activities).
III. Personal income taxpayers
Taxpayers being residents and non-residents who earn taxable income
Taxable income is determined as follows:
Taxable income earned by a resident is the income earned within and beyond Vietnam’s territory regardless of the place where income is paid;
Taxable income of a non-resident is income earned in Vietnam, regardless of the place where income is paid and received."
IV. Who is the resident and non-resident?
A resident is a person who meets one of the conditions below:
a) He/she has been present in Vietnam for at least 183 days in a calendar year or for 12 consecutive months from the first day of his/her presence in Vietnam (the date of arrival and date of departure are considered 01 day). The date of arrival and date of departure depends on the certification of the immigration agency on the passport (or laissez-passers) when that person enters and leaves Vietnam. If the person enters and leaves Vietnam within one day, it will be considered a day of residence.
A person in Vietnam defined in this Point is the presence of that person in Vietnam’s territory.
b) He/she has a regular residence in Vietnam in one of the following cases:
b.1) He/she has a regular residence according to regulations of law on residence:
b.1.1) For Vietnamese citizens: a place where that person regularly, stably, and indefinitely lives and has been registered as a permanent residence as prescribed by regulations of law on residence.
b.1.2) For foreigners: the permanent residence written in the permanent residence card or the temporary residence when applying for the temporary residence card issued by a competent authority affiliated with the Ministry of Public Security.
b.2) He/she rents a house in Vietnam according to regulations of law on housing under a contract that has a term of at least 183 days in the tax year. To be specific:
b.2.1) A person who has no regular residence defined in Point b.1 Clause 1 of this Article will be considered a resident if he/she has a total house lease period of at least 183 days in the tax year under various lease contracts, even if he/she rents houses in different locations.
b.2.2) The rented houses can be hotels, guesthouses, motels, offices, etc., whether they are rented by the person or their employer.
If the person has a regular residence in Vietnam according to this Clause, but his/her actual presence in Vietnam is shorter than 183 days in the tax year, and he/she fails to prove his/her residency in any country, that person will be considered a resident of Vietnam.
The residency in another country shall be proved by the Certificate of residence. If the person is a citizen of a country or territory that has signed a tax agreement with Vietnam and does not issue the Certificate of residence, that person shall present a photocopy of the passport to prove the period of residence.
A non-resident is a person who fails to meet any of the conditions specified in the above conditions.
V. Taxable Incomes:
The incomes subject to personal income tax (hereinafter referred to as taxable incomes) include (10 types):
- 1. Incomes from business
- 2. Incomes from wages and remunerations.
- 3. Incomes from capital investment
- 4. Incomes from capital transfer.
- 5. Incomes from real estate transfer
- 6. Incomes from winning prizes
- 7. Incomes from copyright
- 8. Incomes from franchising
- 9. Incomes from inheritance
- 10. Incomes from receipt of gifts