In case of personal income tax exemption

personal income tax is always an issue of concern for workers and businesses. With the new policy changing the family allowance from 9 million to 11 VND, many workers no longer have to pay personal income tax. Besides, there are also many workers who are exempt from tax. The article below will summarize 16 cases of personal income tax exemption in 2020.

16 Cases of personal income tax exemption in 2020

Pursuant to Article 4 of the Personal Income Tax Law and Article 4 of the Decree 65/2013/ND-CP guided in detail by Article 3 of the Circular 111/2013/TT-BTC (amended by Clause 2, Article 12 and supplemented by Clauses 4 and 5, Article 12 of the Circular 92/2015/TT-BTC), tax-exempt income includes:

1. Income from inheritance and gifts of real estate (including houses and construction works formed in the future according to the provisions of law on real estate business) between: husband and wife; biological father, biological mother and biological children; adoptive father, adoptive mother and adopted child; father-in-law, mother-in-law and daughter-in-law; father-in-law, mother-in-law and son-in-law; grandfather, grandmother with grandchildren, maternal grandfather, grandmother with grandchildren; siblings together.
2. Income from real estate transfer (including houses to be formed in the future, construction works to be formed in the future according to legal regulations on real estate business) between: husband and wife; biological father, biological mother and biological children; adoptive father, adoptive mother and adopted child; father-in-law, mother-in-law and daughter-in-law; father-in-law, mother-in-law and son-in-law; grandfather, grandmother and grandchildren; grandfather, grandmother and grandchildren; siblings together.
3. Income from converting agricultural land to rationalize agricultural production but not changing the land use purpose of households and individuals directly engaged in agricultural production, assigned by the State for production.
4. Income from transfer of housing, residential land use rights and assets attached to residential land of individuals in case the transferor only has one house or residential land use rights in Vietnam.
5. Income from the value of land use rights of individuals allocated land by the State is free of charge or has land use fees reduced according to the provisions of law.
6. Tax-free income from remittances is personal money received from abroad by relatives who are Vietnamese people residing abroad, or Vietnamese people who go to work, work, or study abroad to send money back to them. relatives in the country; In case an individual receives money from abroad sent by a foreign relative who meets the conditions for encouraging remittance to the country according to the regulations of the State Bank of Vietnam, he/she will also be exempt from tax. 

7. Income of households and individuals directly involved in agricultural production, forestry, salt making, farming, and fishing of unprocessed or only conventionally processed aquatic products that have not yet been processed into products other products.

– Households and individuals directly participating in production activities according to the instructions at this point must simultaneously satisfy the following conditions:

• Have land use rights, land lease rights, water surface use rights, legal water surface lease rights for production and directly participate in agricultural production, forestry, salt making, and aquaculture.
• Actual residence in the locality where agricultural production, forestry, salt making, farming and fishing activities take place.
• The locality where agricultural production, forestry, salt making, and aquaculture activities take place according to these instructions are districts, towns, and provincial cities (collectively referred to as district-level administrative units) or The district borders the place where production activities take place.
• Particularly for fishing activities, it does not depend on place of residence.
• Agricultural, forestry, salt making, aquaculture and fishing products that have not yet been processed into other products or have only been preliminarily processed are usually products that have just been cleaned, dried, peeled, and separated. seeding, cutting, salting, refrigeration and other common forms of preservation.

8. Income from the salary and wages for night work and overtime work is paid higher than the salary and wages for daytime work and working hours according to the provisions of the Labor Code, specifically as follows. :

• The higher salaries and wages paid due to having to work at night or overtime are exempt from tax based on the actual salaries and wages paid due to having to work at night or overtime minus (-) the salary and wages. calculated based on normal working days.
• Organizations and individuals paying income must prepare a statement clearly reflecting night work, overtime, and extra wages paid to employees due to night work or overtime. This list is kept at the income paying unit and presented when requested by the tax authority.

9. Income from interest on deposits at credit institutions, foreign bank branches, interest from life insurance contracts; income from interest on Government bonds. The basis for determining tax-exempt income at this point is documents proving the source of money received from abroad and payment documents from the paying organization (if any).

10. Pensions are paid by the Social Insurance Fund according to the provisions of the Social Insurance Law; pension received monthly from the Voluntary Retirement Fund.
11. Income from compensation for life insurance, non-life insurance, and health insurance contracts; compensation for work accidents; compensation and support according to the provisions of law on compensation, support and resettlement; State compensation and other compensation as prescribed by law.
12. Income from scholarships, including:

• Scholarships received from the State budget include: scholarships from the Ministry of Education and Training, Department of Education and Training, public schools or other types of scholarships sourced from the State budget.
• Scholarships are received from domestic and foreign organizations (including living expenses) according to that organization's study promotion support program.

13. Income received from charitable funds permitted to be established or recognized by competent State agencies, operating for charitable, humanitarian, and educational purposes, not for profit.

• The charity fund mentioned at this point is a charity fund established and operating according to the provisions of Decree 30/2012/ND-CP (from January 15, 2020, replaced by Decree 93/2019/ND- CP).
• The basis for determining income received from tax-exempt charitable funds at this point is the document or decision to award the income of the charitable fund and documents of payment of money and in-kind from the charitable fund.

14. Income from salaries and wages of Vietnamese seafarers received by working for foreign shipping companies or Vietnamese shipping companies that transport internationally.
15. The income of individuals who are ship owners, individuals who have the right to use the ship, and individuals working on board the ship is derived from the provision of goods and services directly serving offshore fishing activities.
16. Income received from foreign aid sources for charitable and humanitarian purposes in the form of Government and non-Government approved by competent State agencies. The basis for determining tax-exempt income at this point is a document from a competent State agency approving the receipt of aid.

You can read more articles:

Income is exempt when calculating Corporate Income Tax here:

https://aacs.com.vn/cac-khoan-thu-nhap-duoc-mien-khi-tinh-thue-tndn/

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