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Decree on personal income tax issued
The Government issued a decree guiding the implementation of the Law on Personal Income Tax and regulating tax registration, declaration and payment in line with the Law on Tax Management.
According to decree No 100/2008/ND-CP, there are 10 kinds of taxable incomes, including incomes from salaries and wages; business and production; capital investment; transfer of capital and real estate; lottery winnings; copyright; franchise activities; inheritance and gifts which are securities, capital or assets that must be registered.
The decree also regulates 14 kinds of incomes that will enjoy tax exemption, such as income from real estate transferred between a husband and wife, blood-relationships; interest on deposits at banks and credit institutions; compensations from life insurance contracts; scholarships; and retirement pensions.
When taxpayers face difficulties caused by natural disasters, fire and fatal diseases which affect their capability to pay taxes, they will receive a tax deduction equivalent to the severity of damages.
The decree regulates a progressive tax regime applied for income from businesses, wages and salaries. The lowest tariff is 5 per cent imposed on incomes of between VND4 million and under VND5 million (US$294) per month and the highest rate is 35 per cent levied on monthly income of over VND80 million ($4,700).
All residents and non-residents in Vietnam are subject to income tax. The decree repeals two separate tax regimes applied to foreigners and Vietnamese which are currently regulated by the Ordinance on Income Tax of High-Income Earners. The minimum monthly taxable income will be VND4 million ($240) for both Vietnamese and foreigners.
The decree also allows a deduction of VND1.6 million ($96) per dependant.
Dependants include children under 18, unemployed spouses, the elderly and unemployed parents. Deductions can only be calculated once for each dependant.
The decree will come into effect as of January 1, 2009.
VNN
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