Dec. 19 – On November 22, 2012, the Vietnamese National Assembly promulgated Law No. 26/2012/QH13, amending and supplementing a number of articles within the Law on Personal Income Tax – including increasing personal income tax thresholds.
According to the Law, the threshold for individual taxpayers will be increased from VND4 million per month to VND9 million per month. Furthermore, the deduction for each dependent of the taxpayer will be VND3.6 million per month, compared to the present deduction of VND1.6 million per month.
Please note, in the case that the Consumer Price Index (CPI) changes by more than 20% compared to the effective time of the Law or the latest point of time after adjusting the reduction level for family circumstances, the government will defer to the Standing Committee of the National Assembly for the exact adjustment of the family circumstances reduction.
In addition, the Law also more clearly defines salaries, wages, allowances and subsidies. Other amounts such as bonuses, remunerations of all kinds, money earned from participating in business associations, boards of directors, control boards, management boards, other organizations, and miscellaneous monetary or non–monetary benefits are not considered as salaries or wages.
This law will take effect on July 1, 2013.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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