- October 21, 2020
- Posted by: Thu Phuong
- Categories: Business support, Tax consulting
When individuals have taxable income, they must calculate and pay personal income tax. However, there are incomes that are subject to personal income tax, and other incomes that are exempt from personal income tax. It is mandatory for personal income tax assessors to clearly understand these regulations so that when calculating and tax settlement PIT correctly. Down here AACS will list income subject to personal income tax according to the latest regulations on personal income tax.
The 10 latest personal income taxable incomes in 2020
1. Income from production and business activities (production and business)
Including income from production and trading of goods and services according to the provisions of law. Particularly, income from agricultural production, forestry, salt making, aquaculture, and fishing only applies to cases that do not qualify for tax exemption specified in Clause 5, Article 4 of Decree 65/2013. /ND-CP; Income from independent practice activities of individuals with a license or practice certificate according to the provisions of law. Income from production and business does not include income of business individuals with revenue of 100 million VND/year or less.
2. Income from salaries and wages that employees receive from employers, including:
a) Salaries, wages and amounts of salary and wages received in monetary or non-monetary forms.
b) Allowances and subsidies, except for the following allowances and subsidies:
- Monthly allowances, preferential allowances and one-time allowances according to the provisions of law on incentives for people with meritorious services.
- Monthly allowance, one-time allowance for those participating in the resistance war, defending the homeland, doing international missions, and youth volunteers who have completed their tasks.
- National defense and security allowances; subsidies to the armed forces.
- Toxic and dangerous allowances for industries, occupations or jobs in the workplace with toxic and dangerous elements.
- Attraction allowances, regional allowances.
- Unexpected hardship allowance, allowance for labor accidents, occupational diseases, one-time allowance for giving birth or adopting a child, maternity benefits, convalescence benefits, post-maternity recovery , benefits due to loss of working ability, one-time retirement benefits, monthly survivor benefits, severance benefits, job loss benefits, unemployment benefits and other benefits according to the provisions of the Code Labor and Social Insurance Law.
- Subsidies for social protection subjects according to the provisions of law.
- Service allowances for senior leaders.
- One-time allowance for individuals when moving to areas with extremely difficult socio-economic conditions, one-time allowance for civil servants working on island sovereignty according to the provisions of law . One-time roaming allowance for foreigners coming to reside in Vietnam, Vietnamese people working abroad, Vietnamese people residing abroad long-term and returning to Vietnam to work.
- Allowances for village health workers.
- Industry-specific allowances.
Allowances, allowances and levels of allowances and subsidies not included in taxable income guided in Point b, Clause 2, this Article must be prescribed by competent State agencies.
In case the guiding documents on allowances, subsidies, allowances and subsidies apply to the State sector, other economic sectors and other business establishments are based on the list. and guideline allowance and subsidy levels for the State sector to calculate deductions.
In case the allowance or subsidy received is higher than the allowance or subsidy according to the above instructions, the excess must be included in taxable income.
Particularly, one-time roaming allowance for foreigners coming to reside in Vietnam and Vietnamese people working abroad is deducted according to the level stated in the labor contract or collective labor agreement.
c) Remuneration received in the following forms:
- Commodity sales agent commissions, brokerage commissions;
- Money to participate in scientific and technical research projects;
- Money to participate in projects and schemes;
- Royalties according to the provisions of law on royalties;
- Money for participating in teaching activities;
- Money for participating in cultural, artistic, physical training and sports performances;
- Advertising service fees;
- Other service fees, other remunerations.
d) Money received from participating in business associations, enterprise boards of directors, enterprise control boards, project management boards, management councils, associations, professional associations and other organizations.
d) Monetary or non-monetary benefits other than salaries and wages paid by the employer that taxpayers enjoy in any form:
d.1) Housing, electricity, water and associated services (if any), excluding:
- Benefits for housing, electricity and water and accompanying services (if any) for housing built by the employer to provide free of charge to employees working in the industrial park;
- Housing built by employers in economic zones, areas with difficult socio-economic conditions, and areas with extremely difficult socio-economic conditions is provided free of charge to workers.
In case an individual lives at the workplace, taxable income is based on rent or depreciation costs, electricity, water and other services calculated according to the ratio between the area used by the individual and the area. headquarter.
The amount of rent, electricity and water and associated services (if any) for housing paid by the employer shall be included in taxable income according to the actual amount paid but not exceeding 1 % of total income. Taxable income arises (excluding house rent) at the unit regardless of where the income is paid.
d.2) The amount of money the employer buys life insurance or other optional insurance with accumulated premiums; Buy voluntary pension insurance or contribute to the Voluntary Retirement Fund for employees.
In cases where the employer purchases insurance products for employees that are not mandatory and do not accumulate insurance premiums (including the case of purchasing insurance from insurance enterprises that are not established and operating under the law), Vietnamese law allows the sale of insurance in Vietnam), the fee for purchasing this insurance product is not included in the employee's personal income taxable income. Optional insurance and no accumulation of premiums include insurance products such as: health insurance, death insurance (excluding refundable death insurance products),... that the participant The insurer does not receive accumulated premiums from insurance participation, other than the insurance proceeds or compensation agreed upon in the insurance contract paid by the insurance enterprise.
d.3) Membership fees and other service expenses to serve individuals upon request such as: health care, entertainment, sports, entertainment, cosmetics, specifically as follows:
- Membership fees (such as golf course membership cards, tennis court membership cards, arts and culture club activity cards, sports clubs, etc.) if the card has the name of the individual or group of individuals using it. In case the card is used jointly, without the name of the individual or group of individuals using it, it will not be included in taxable income.
- Expenses for other services serving individuals in health care activities, entertainment, cosmetic entertainment... if the payment content clearly states the name of the individual beneficiary. In case the service fee payment does not list the name of the individual beneficiary but is spent on a collective of employees, it will not be included in taxable income.
d.4) The fixed expenses for stationery, business trips, telephone calls, costumes, etc. are higher than the current State regulations. Expenditures are not included in taxable income in the following cases:
- For officials, civil servants and people working in administrative and public service agencies, the Party, unions, unions and associations: the fixed spending level applies according to the guiding documents of the Ministry of Finance.
- For employees working in business organizations and representative offices: the applicable expenditure level is consistent with the level of determining income subject to corporate income tax according to documents guiding the implementation of the Income Tax Law. Enter the business.
- For employees working in international organizations and representative offices of foreign organizations: the level of expenses shall comply with the regulations of the International Organization and representative offices of foreign organizations.
d.5) Expenditures on vehicles to transport employees from home to work and vice versa are not included in the employee's taxable income according to the unit's regulations.
d.6) For payments for training to improve qualifications and skills for employees in accordance with the employee's professional work or according to the employer's plan, then not included in the employee's income.
d.7) Other benefits.
Other benefits that employers pay to employees such as: spending on days off and holidays; hiring consulting services, hiring tax declaration for a specific individual or group of individuals; Expenses for domestic workers such as drivers, cooks, and people who do other housework under contract...
e) Cash or non-monetary bonuses of any kind, including stock bonuses, except the following bonuses:
e.1) Bonuses accompanying titles conferred by the State, including bonuses accompanying emulation titles, forms of reward according to the provisions of law on emulation and commendation, specifically :
- Bonuses accompanying emulation titles such as National Emulation Soldier; Emulation soldiers at the level of ministries, branches, organizations at the Central, provinces and centrally run cities; Grassroots emulation soldiers, advanced workers, advanced soldiers.
- Bonuses come with other forms of reward.
- Bonuses accompanied by titles awarded by the State.
- Bonuses accompanying awards are awarded appropriately by associations and organizations belonging to political organizations, socio-political organizations, social organizations, and socio-professional organizations of the central and local levels. with the charter of that organization and in accordance with the provisions of the Law on Emulation and Commendation.
- Bonuses include the Ho Chi Minh Award and the House Award
- Bonuses accompanied by medals and badges.
- Bonuses accompanied by awards and Certificates of Merit.
The authority to make reward decisions, bonus levels accompanying emulation titles, and forms of reward mentioned above must be in accordance with the provisions of the Law on Emulation and Commendation.
e.2) Bonuses accompanying national awards and international awards recognized by the State of Vietnam.
e.3) Bonuses for technical improvements, inventions, and inventions recognized by competent State agencies.
e.4) Rewards for detecting and reporting violations of law to competent State agencies.
g) The following items are not included in taxable income:
g.1) The employer's support for medical examination and treatment of dangerous diseases for the employee and his or her relatives.
g.1.1) Relatives of the employee in this case include: biological children, legally adopted children, illegitimate children, stepchildren of the spouse; wife or husband; biological father, biological mother; father-in-law, mother-in-law (or father-in-law, mother-in-law); stepfather, stepmother; adoptive father and legal adoptive mother.
g.1.2) The level of support not included in taxable income is the actual amount paid according to hospital fee payment documents but must not exceed the amount of hospital fees paid by the employee and the employee's relatives after deducted the amount paid by the insurance organization.
g.1.3) The employer who pays the support money is responsible for:
- Keep a copy of proof of payment of hospital fees with confirmation from the employer (in case the employee and his or her relatives pay the remainder after the insurance organization pays directly to the medical facility). illness) or copy of hospital fee payment voucher;
- Copy of health insurance payment voucher certified by the employer (in case the employee and the employee's relatives pay all hospital fees, the insurance organization pays insurance for the employee and employees' relatives) along with vouchers of support payments for employees and employees' relatives suffering from serious illnesses.
g.2) The amount of money received according to regulations on using vehicles in State agencies, public service units, Party organizations, and unions.
g.3) Amounts received under the official housing regime according to the provisions of law.
g.4) Amounts received other than salaries and wages due to:
- Participate in opinions, appraisals, and verification of legal documents, resolutions, and political reports;
- Participate in inspection and supervision teams;
- Receiving voters and receiving citizens;
- Costumes and other work related to directly serving the activities of the National Assembly Office, the Nationalities Council and National Assembly Committees, and National Assembly Delegations; Central Office and Party security;
- Office of the City Party Committee, Provincial Party Committee and security officers of the City Party Committee and Provincial Party Committee.
g.5) Mid-shift meals and lunches paid by the employer for organizing mid-shift meals and mid-shift lunches for employees in forms such as directly cooking, buying meals, and issuing meal vouchers.
In case the employer does not organize a mid-shift meal or lunch but spends money on the employee, it will not be included in the individual's taxable income if the level of expenditure complies with the guidance of the Ministry of Labor and War Invalids. and Society. In case the spending level is higher than the guidance level of the Ministry of Labor, War Invalids and Social Affairs, the excess spending must be included in the individual's taxable income.
The specific spending level applicable to State-owned enterprises and organizations and units of public administrative agencies, Party, Union and Associations must not exceed the guidance of the Ministry of Labor, War Invalids and Social Affairs. For non-state enterprises and other organizations, the spending level is decided by the unit head in agreement with the union president but must not exceed the maximum level applicable to state-owned enterprises.
g.6) The amount of money for round-trip air tickets paid by the employer (or paid) for foreign employees working in Vietnam, Vietnamese employees working abroad in addition to leave once a year.
The basis for determining the air ticket purchase amount is the labor contract and the air ticket payment from Vietnam to the foreigner's country of nationality or the country where the foreigner's family lives and vice versa; payment for air tickets from the country where Vietnamese people are working to Vietnam and vice versa.
g.7) Tuition fees for children of foreign workers working in Vietnam to study in Vietnam, children of Vietnamese workers working abroad to study abroad at educational levels from preschool to High school is paid for by the employer.
g.8) Personal income received from:
- Sponsoring associations and organizations do not have to be included in personal income taxable income if the individual receiving sponsorship is a member of the association or organization;
- Funding is used from State funds or managed according to State regulations;
- The creation of literary and artistic works, scientific research works... carries out the political tasks of the State or according to an activity program in accordance with the Charter of that Association or organization.
g.9) Payments made by the employer to serve the mobilization and rotation of foreign employees working in Vietnam according to the provisions of the labor contract and compliance with the labor schedule standards according to international practices of some industries such as oil and gas and mining. The basis for determination is the labor contract and the payment for air tickets from Vietnam to the country where the foreigner resides and vice versa.
g.10) The amount of money received by the income-paying organization or individual to pay for funerals and funerals for the employee and his or her family according to the general regulations of the income-paying organization or individual and in accordance with the specified level. Determine income subject to corporate income tax according to documents guiding the implementation of the Corporate Income Tax Law.
3. Income from capital investment, including:
a) Loan interest;
c) Profits received from capital contributions to limited liability companies, partnerships, cooperatives, joint ventures, business cooperation contracts and other forms of business according to the provisions of the Enterprise Law Industry and Cooperative Law; Income received from contributing capital to establish a credit institution according to the provisions of the Law on Credit Institutions; Contribute capital to Securities Investment Funds and other investment funds established and operating in accordance with the provisions of law.
Income from private enterprises and single-member limited liability companies owned by individuals is not included in taxable income from capital investment.
4. Income from capital transfer
Includes income from capital transfer in economic organizations; securities transfer; Transfer capital in other forms.
Income from securities transfer, including:
Income from transfer of stocks, stock purchase rights, bonds, treasury bills, fund certificates and other securities as prescribed in Clause 1, Article 6 of the Securities Law. Income from transfer of shares of individuals in joint stock companies according to the provisions of Clause 2, Article 6 of the Securities Law and Article 120 of the Enterprise Law.
5. Income from real estate transfer
Transfer of land use rights and assets attached to land; transfer of ownership or use of housing; Transfer of land lease and water surface lease rights.
6. Income from winning prizes in cash or in kind, incl
Lottery winnings; Win promotional prizes in various forms; Win prizes in various forms of betting; Win prizes in prize-winning games, contests and other forms of prizes.
7. Income from copyright, including:
- Income from transfer and transfer of rights to use objects of intellectual property rights: copyright and rights related to copyright; Industrial property rights; rights to plant varieties;
- Income from technology transfer: technical know-how, technical knowledge, solutions to rationalize production, technological innovation.
8. Income from commercial franchising according to the provisions of the Commercial Law.
9. Income from inheritance
As securities, capital shares in economic organizations, business establishments, real estate and other assets must be registered for ownership or use.
10. Income from receiving gifts
As securities, capital shares in economic organizations, business establishments, real estate and other assets must be registered for ownership or use.
Above AACS presented the 10 latest personal income taxable incomes. In addition to amounts subject to personal income tax, the personal income tax law also regulates income that is exempt from tax when calculating personal income tax. You can see more through the article: https://aacs.com.vn/truong-hop-duoc-mien-thue-tncn/
Or contact immediately AACS for advice and support.
AACS AUDITING COMPANY LIMITED
Phone: 028 66 500 381 – Mobile: 0908 381 550 (Mr Manh) – Mobile: 0908 688 550 (Ms Phuong)