Job Discussion Forums

[AmanJivan]

PIT TAX RATES AND CHANGES
I. TAX PAYER

Residents:

Residency concepts apply to both Vietnamese and foreigners who satisfy who satisfy one of the following conditions:
 Present in Vietnam for 183 days or more for 12 consecutive months or calendar year .The arrival date and departure date is counted as 01 day .If a foreigner enters and exits Vietnam within the same day ,that day is counted as 01 day .Residency is now defined on a year-to-year basis.
 Have a usual place of domicile in Vietnam:
- Vietnamese: live in Vietnam in s permanent address and register the residence (have household register book)
- Foreigners :have a permanent address and register this address in the temporary residence card or a house lease contract(s) of over 90 days in a year (12-month period ) including rent house (can change many times ) or hotels .etc .They need to have the rent house contract (s) which is notarized or red receipt if living in hotel .
Non-residents: all those who do not satisfy the above conditions.

II. TAX RATES:

1. Residents: the progressive rates apply to all resident tax payers.

Level Average yearly taxable income
(VND) Average monthly taxable income
(VND) Tax rate (%)
1 Up to 60,000,000 Up to 5,000,000 5
2 Above 60,000,000 to 120,000,000 Above 5,000,000 to 10,000,000 10
3 Above 120,000,000 to 216,000,000 Above 10,000,000 to 18,000,000 15
4 Above 216,000,000 to 384,000,000 Above 18,000,000 to 32,000,000 20
5 Above 384,000,000 to 624,000,000 Above 32,000,000 to 52,000,000 25
6 Above 624,000,000 to 960,000,000 Above 52,000,000 to 80,000,000 30
7 Above 960,000,000 Above 80,000,000 35


For example :Mr. .A is a resident and earns VND10 million per month .He has 02 children under 18 years old ; he has to contribute to compulsory insurances: 5% social insurance ,1% health insurance ; he does not contribute for charity ,humanity group or study encouragement group.
Mr. .A�s monthly personal income tax ((PIT) will be calculated as follows:
→ Tax deductions for Mr. .A are calculated as follows:
+ Personal deductions: 4,000,000
+ Dependant deductions (2 children): 1,600,000 x 2 = 3,200,000
+ Social and the heath insurance: 10,000,000 x 6% = 600,000
Total deduction: 4,000,000 + 3,200,000 + 600,000 =7,800,000
→ The taxable income will be: 10,000,000 � 7,800,000 = 2,200,000
→ After all statutory deductions, his taxable income is in Level 1 of the progressive rates:
2,200,000 x 5% = 110,000
→ PIT payable is 110,000
Resident taxpayer who do not sign employment contracts and have no Tax code will be taxed 20% on total monthly income.

Resident taxpayer who do not sign employment con tracts but have Tax code will be taxed 10% on total monthly income.

2. Non- residents

The tax rate will be 20% on the total monthly income.

II. TAXABLE INCOME : include

 Salary ,wage
 Allowances ,subsidies
 Commission ,brokerage fee
 Cash or non-cash fringe benefits paid to employees :
 Accommodation, electricity bill, water bill and other services .In case employees stay at company�s apartment taxable income will be based on the house rental.
 School fee for children ,home leave airfares ,one-off relocation allowance
 Non-compulsory insurance premiums (including medical insurance)
 Club memberships
 Other benefits paid to employees on holidays, tourism, consultancy
 Year-end bonuses: the 13th month salary paid in cash or non-cash form or by stocks, etc.
 Salary which is paid by Social Insurance for 4 months of maternity leave

IV. NON-TAXABLE ALLOWANCES

 Unforeseen hardship allowance ,labor accident allowances ,occupational disease allowance
 One-off maternity allowance (2 months if minimum wage) , child adoption allowance
 Allowance for the decline of employees� working ability
 Retirement pension ,death gratuity
 Severance allowance, unemployment benefit
 Other allowances paid by Social Insurance

It is effective from 1 January 2009

[inky]

Thanks for clearing things up.