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Important points to
understand about personal income tax
Law No 26/2012/QH13 that took affect from 1 July and its
guiding legal instruments issued in 2013 such as Decree No 65/2013/ND-CP and
Circular No 111/2013/TT-BTC (Circular 111) amend and supplement a number of
new policies on personal income tax in Viet Nam.
The new personal
income tax threshold has increased to VND9 million per month from VND4
million. In addition, the deduction for each dependent has been raised to
VND3.6 million from VND1.6 million. Consequently, a taxpayer with one
dependent must contribute personal income tax (PIT) if they have an income of
over VND12.6 million per month. Taxpayers are required to submit a copy of
their ID cards to take advantage of the tax deduction. It is also important
to note that payments to the monthly voluntary pension plan are also exempt
from PIT, as is the Social Insurance Fund.
As of 1 October
2013, the taxable income is defined as the net income, including salaries,
wages without tax and other monetary or non-monetary benefits paid by an
employer to the employee. Due to this new tax calculation, employees must
increase tax payments on non-monetary benefits other than salaries, wages or
rewards.
Circular 111
determines the residential status of an individual under the circumstance
that the individual has permanent residence in Viet Nam outlined in the two
cases below: (a) the individual has permanent residence in accordance with
the provisions of the Law on Residence, or (b) the individual leases a house
to stay in Viet Nam with a contract of 183 days or more during the tax year.
The residence status of individuals in other countries may be proved by a
residence certificate from that country. In terms of individuals in countries
or territories which have signed tax treaties with
Tran Quang, Junior
Associate, Indochine Counsel
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Thứ Tư, 23 tháng 10, 2013
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