Vietnam Releases Details of Personal Income Tax Law
Oct. 9 – The government has released the details of the new Personal Income Tax (PIT) law and its accompanying regulations on registration and declaration.
Under the law, payers are defined as non-residents and residents who have taxable earnings coming from Vietnam territory without differentiating income payment sites.
The new PIT will take effect on Jan. 1, 2009, when individuals with taxable earnings will be granted a tax code.
PIT for levied earnings will have 10 kinds including earnings from production and business, salary and wage received from employers, capital investment, capital transference, property transference, prize winnings in cash or kind, copyright, commercial transfer under law on commerce, earnings from securities as inheritance, capital contribution in economic institutions and business facilities.
Those earnings exempted from the PIT include: income from real estate transference between husband and wife, natural parent and children including among siblings, earnings from life insurance contracts, overseas remittance, retirement salary, scholarship money, and earnings from compensation for insurance contracts, to name a few.
The progressive tax benchmark for each taxable income from business and salary will be classified according to seven tax grades.
The lowest PIT would have 5 percent levied on a monthly income of five million dong , 10 percent on the monthly income of 5-10 million dong. The highest PIT would levy 35 percent on the income of more than 80 million dong a month.
The PIT reduction for taxpayers with dependents is 48 million dong annually, based on the age and condition of the dependent. For example, a child aged below 18-years-old, or child aged over 18-years-old with low income and a parent with a disability could qualify as dependents.
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