Personal Income Tax Exemption Approved
Jun. 22 – Vietnam’s National Assembly voted in favor of the Personal Income Tax (PIT) exemption from the period beginning July 1.
The ministry is expected to release a follow-up announcement detailing the coverage of the exemption. The directive should specify the residency status subject to tax exemption, types of income subject to tax exemption and the income payment basis for the exemption assessment to name a few.
Early this month, companies were still unsure whether to exclude PIT payment from employee salaries since the exemption was still pending approval from the National Assembly.
The issue was cleared only when the General Department of Taxation announced that for those qualified for the tax exemption for the five months of the year; the exemption will be extended until June.
The PIT exemption states that from July 1 until December 31, 2010, income derived from capital assignment, capital investments, including securities transfer, royalties and franchises will be exempted from tax.
On the other hand, PIT payments worth VND200,000 monthly will be cut starting from July 1 to December 31, 2009. The move to decrease PIT collection to help boost domestic spending will cut state collections for the year by an estimated VND6.5 trillion.
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