Further Guidance on the Finalization of Personal Income Tax (PIT)

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Official Dispatch No.230/TCT-TNCN dated January 17th 2012 issued by The General Department of Taxation provides further guidance on 2011 PIT finalization. This guidance included information about determining taxable income from salaries or wages:

  • Taxable income from salaries or wages are determined to be total salary, wage or remuneration amounts and other income amounts of salary or wage nature received by taxpayers in the year 2011.
  • The time of determination of taxable income from salaries and wages is the time when employers pay salaries or wages to their employees. Salaries or wages of December, 2011 paid to taxpayers in January, 2012 will be considered as taxable income of the year 2011 when doing 2011 PIT finalization.
  • Taxpayers and their dependents are granted the relief on a full month basis even though individuals start/end their employment at any time during a month and/or there is a change in the number of dependents during the month.
  • Guidance on calculation and declaration of PIT exemption for individuals with taxable income not exceeding VND 5 million per month:
  • Income from salaries or wages:
Personal income tax


Taxed income per month


Tax rates according to the partially progressive tariff


12 months

  • Exempt personal income tax for individuals, business households having taxable income from salaries, wages and business activities to the level of taxable personal income at grade 1 of the partially progressive tax tariff for last 5 months of 2011.
Exempted tax


PIT payable in 2011 x 5 months

12 months

  • Individuals declare PIT after deducting tax exemption on the criteria [32] of Personal Income Tax Finalization declaration, form 09/KK-TNCN issued together with Circular No. 28/2011/TT-BTC dated 28/02/2011 of the Ministry of Finance.
  • Foreigners staying in Vietnam for 183 days or more in the first calendar year will be treated as tax residents and subject to PIT on their worldwide income from January 1st to December 31st irrespective of the date of arrival. A related foreign tax credit is allowed.
  • Foreigners who are tax residents, and leave Vietnam prior to December 31st, are subject to PIT from January 1st until their departure date. Personal relief is calculated from January up to the departure month. A related foreign tax credit is allowed.
  • Foreigners staying in Vietnam for less than 183 days in the first calendar year but for 183 days or more in a consecutive 12 months after first arrival, are treated as a tax resident and are subject to PIT from the first month of their arrival. The subsequent tax year is the calendar year.
  • Similar to last year, an employer is not allowed to undertake PIT finalization on behalf of an employee if a PIT withholding receipt has been issued to them, except for when the tax receipt is retrieved and canceled.

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