Following Part 3 specializing on incomes from capital investment and Part 4 specializing on incomes from real estate transfer, this part of the series on Personal Income Tax for Foreigners will focus on personal income tax imposed on incomes from wages and remunerations.
i. Types of incomes from wages and remunerations
Incomes from wages and remunerations (hereinafter referred to as wages) are incomes paid to employees from employers, including:
– Wages, remunerations, and the other amounts paid as wages or remunerations in cash or not in cash.
– Allowances and benefits, except for:
+ Monthly benefits, lump-sum benefits and allowances according to regulations of law on incentives for contributors.
+ Monthly allowances and lump-sump allowances for the persons that participate in the resistance movements, national defense, fulfillment of international tasks, and discharged volunteers.
+ Benefits for national defense and security; subsidies for the armed forces.
+ Benefits for dangerous or harmful works.
+ Benefits for employees in disadvantaged areas.
+ Irregular allowances for difficulties, occupational accident benefits, occupational illness benefits, lump-sum allowances for childbirth or adoption, maternity leave benefits, post-maternity recovery benefits, benefits for reduction in work ability, lump-sum pension, monthly widow’s pension, severance pay, redundancy pay, unemployment benefits, and other benefits according to the Labor Code and the Law on Social insurance.
+ Benefits for beneficiaries of social security.
+ Benefits for senior officers.
+ Lump-sum benefits for the persons reassigned to the areas facing extreme economic and social difficulties, lump-sum supports for officers working for sovereignty over sea and islands as prescribed by law. Lump-sum moving allowances for foreigners that move and reside in Vietnam and Vietnamese people that go to work abroad, and Vietnamese people that have long-term residence overseas then go back to work in Vietnam.
+ Benefits for medical employees in villages.
+ Occupational benefits.
– Remunerations in the forms of agent commission, brokerage commission, payments for participation in science and technology researches, payments for participation in projects and schemes, royalties according to regulations of law on royalties, payments for teaching, payments for participation in artistic performance, sports, payments for advertising, payments for other services, and other remunerations.
– Payments for participation in business associations, Boards of Directors, Control Boards, project management boards, management councils, professional associations, and other organizations.
– Other benefits in cash or not in cash apart from wages paid to the taxpayer by the employer in any shape or form:
+ Payments for housing, electricity, water supply and associated services
+ The life insurance premiums, premiums of other optional insurance with accrual of premiums, voluntary pension insurance premiums or contributions to the voluntary pension fund paid on the worker’s behalf.
+ Membership fees and other expenditure on services serving individuals such as: healthcare, entertainments, sports, recreation.
+ Flat expenditures on stationery, business trips, phone calls, costumes, etc. that are in excess of the limits prescribed by the State.
+ Other benefits.
-> To find more detailed information on such benefits, you can read Part 6 of the series which specialize in benefits in cash or not in cash apart from wages paid to the taxpayer by the employer.
– Rewards in cash or not in cash in any shape or form, including rewards in the form of securities, except for:
+ Prize money associated with the titles awarded by the State, including the prize money associated with honorary titles as prescribed by law:
- Prize money associated with honorary titles awarded by Ministries, central and provincial agencies and associations, excellent employee titles.
- Prize money associated with the awards.
- Prize money associated with the titles awarded by the State.
- Prize money associated with the awards presented by associations and organizations belonging to central and local political organizations, socio-political organizations, social organizations, social organizations that conforms with there charters and the Law on Emulation and commendation.
- Prize money associated with the Ho Chi Minh Prize and National Prize.
- Prize money associated with medals or badges.
- Prize money associated with certificates of merit
The powers to decide the commendation and prize money associated with the titles and awards above must be conformable with the Law on Emulation and commendation.
+ Prize money associated with national prizes and international prizes recognized by Vietnam.
+ Rewards for technical innovations and inventions recognized by competent authorities.
+ Rewards for reporting violations of law to competent authorities.
ii. Tax rate
For residents, tax rate shall be applicable in accordance with the Progressive Tax Table stipulated in Article 22 of the Law on Personal Income Tax and Article 7.2 of the Circular No. 111/2013/TT-BTC, in particular:
|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|
iii. Tax calculation time
Taxable income from wages and remuneration shall be calculated when the income is paid to the taxpayer.
The taxable income from accrued insurance premium mentioned above shall be calculated when the insurer or the voluntary pension fund pays the insurance money.