Tiếng Việt- 1 Circular No. 12/2005/TT-BTC, promulgated by the Ministry of Finance, amending and supplementing a number of points of the Finance Ministrys Circular No. 81/2004/TT-BTC of August 13, 2004 guiding the implementation of the Governments Decree No. 147/2004/ND-CP of July 23, 2004 detailing the implementation of the ordinance on income tax on high-income earners
- 2 Circular No. 81/2004/TT-BTC of August 13, 2004 guiding the implementation of The Governments Decree No.147/2004/ND-CP of July 23, 2004 detailing the implementation of the ordinance on income tax on high-income earners
| THE GOVERNMENT | SOCIALIST REPUBLIC OF VIET NAM |
| No. 147/2004/ND-CP | Hanoi, July 23, 2004 |
DETAILING THE IMPLEMENTATION OF THE ORDINANCE ON INCOME TAX ON HIGH-INCOME EARNERS
THE GOVERNMENT
DECREES:
1. Vietnamese citizens who live at home or travel overseas for working missions or labor and earn income;
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3. Foreigners working in Vietnam, including those who do not live in Vietnam but have their income generated in Vietnam.
1. Regular incomes include:
a/ Wages, salaries, remunerations, including income amounts being house rents, electricity and water charges, which are paid by the income earners’ employers and not calculated in wages or remunerations. Particularly, house rents shall be calculated according to the amounts actually paid by employers but must not exceed 15% of the total taxable income; other incomes earned through participation in projects, business societies or enterprises’ managing boards; assorted allowances and rewards in cash or in kind;
b/ Incomes being copyright royalties for use of patents, trademarks or works; incomes being authors’ emoluments; incomes being scientific and technical service charges; informatics services; consultancy, designing and training services; agency services; brokerage commissions;
c/ Incomes other than wages or remunerations, earned from production, business or service activities, which are not subject to enterprise income tax, such as: incomes from activities of performance, performance organization, fashion shows, advertisements and other services.
2. Irregular incomes include:
a/ Incomes from technology transfer, excluding gifts or donations;
b/ Lottery prizes in any form, including sale promotion prizes.
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Article 4.- Incomes not subject to tax include:
1. The following allowances, which are provided for by the Vietnamese State for incomes generated in Vietnam, including:
a/ Itinerancy allowance;
b/ Poisonousness and hazardousness allowances;
c/ Position or responsibility allowance applicable to officials and State employees;
d/ Region-based allowance; job-attraction allowance; special allowance for a number of remote islands and border regions with particularly difficult daily-life conditions;
e/ Seniority allowance for the armed forces, customs and cipher offices;
f/ Specific allowances for a number of branches and occupations as prescribed by law;
g/ Preferential allowance for officials engaged in revolutionary activities before 1945;
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2. Other incomes generated in Vietnam, including:
a/ Working trip allowance;
b/ Food ration expenses for a number of special branches and occupations according to the State-prescribed regime;
c/ Social supports for social policy benefi-ciaries and other subsidies from the State budget;
d/ Insurance indemnities for participants in life and property insurance regimes;
e/ Severance supports and job-loss supports according to the State-prescribed regimes;
f/ Supports for those who are transferred to work at production and/or business establish-ments, including lump-sum regional transfer supports;
g/ Pecuniary rewards for technical innova-tions, inventions, international prizes and national prizes organized by the Vietnamese State;
h/ Pecuniary rewards accompanying the State-conferred titles, such as: Professor, People’s Teacher, Labor Hero, People’s Armed Forces Hero and other State-conferred titles; pecuniary rewards or other preferential treatment regimes from the State budget;
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3. Incomes of individual business household owners, which are subject to enterprise income tax.
TAX CALCULATION BASES AND TAX RATE TABLES
Article 5.- Bases for tax calculation are the taxable incomes and the tax rates.
1. Taxable regular incomes:
a/ For Vietnamese citizens:
- For Vietnamese citizens and other individuals permanently residing in Vietnam: Taxable regular income is the total income earned by each individual and calculated on a monthly average in a year, which is over VND 5 million. Particularly, singers, circus artists, dancers, footballers and professional athletes shall enjoy a deduction of 25% from their incomes when determining their taxable incomes;
- For Vietnamese citizens who work both at home and abroad, their taxable average monthly incomes shall be determined by the total incomes generated at home and abroad divided by 12 months.
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- For foreigners residing in Vietnam and Vietnamese citizens working or laboring abroad, the taxable regular income is the total of incomes generated in Vietnam and abroad and calculated on a monthly average in a year, which is over VND 8 million.
In cases where the declared monthly average income generated abroad is lower than that generated in Vietnam and this cannot be proved, the monthly average income in Vietnam shall serve as basis for calculating the income generated during the overseas stay period.
The conventional tax calculation month has 30 days.
- For foreigners not residing in Vietnam, their taxable income is the total income generated in Vietnam, paid for jobs performed in Vietnam, regardless of whether they receive such income in Vietnam or abroad.
Foreigners shall be regarded as residing in Vietnam if they stay in Vietnam for 183 days or more in the period of 12 months as from the date of their arrivals in Vietnam; and regarded as not residing in Vietnam if they stay in Vietnam for less than 183 days in the same period.
2. Taxable irregular incomes:
a/ Incomes from technology transfers with the value of over VND 15 million for each contract, regardless of the number of payment times;
b/ Lottery prizes in any form, including sale promotion prizes, with the value of over VND 15 million for each time of prize winning and reception.
1. Tax rates applicable to regular incomes:
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Calculation unit: VND 1,000
Grade
Monthly average income/person
Tax rate (%)
1
Up to 5,000
0
2
Between over 5,000 and 15,000
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3
Between over 15,000 and 25,000
20
4
Between over 25,000 and 40,000
30
5
Over 40,000
40
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Calculation unit: VND 1,000
Grade
Monthly average income/person
Tax rate (%)
1
Up to 8,000
0
2
Between over 8,000 and 20,000
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3
Between over 20,000 and 50,000
20
4
Between over 50,000 and 80,000
30
5
Over 80,000
40
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d/ For Vietnamese citizens who earn in a tax calculation year their incomes both at home and abroad, the monthly average income generated at home shall be subject to the tax rate table specified at Point a, Clause 1 of this Article, while the income amount generated abroad shall be subject to the tax rate table specified at Point b, Clause 1 of this Article.
2. Tax rates applicable to irregular incomes shall be determined on the basis of the total taxable income:
a/ The tax rate of 5% shall apply to incomes from technology transfer;
b/ The tax rate of 10% shall apply to incomes being lottery prizes or sale promotion prizes.
TAX DECLARATION, PAYMENT AND FINAL SETTLEMENT
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1. To register, declare, withhold and remit income tax in full and on time into the State budget; make integrated tax declaration and calculation tables, and submit to the tax agencies the lists of income tax payers;
2. To guide tax payers in receiving income tax declaration forms, making income tax declarations, payment and final settlement with the tax agencies;
3. To keep books and records related to the income tax declaration, calculation and payment, and observe the periodical reporting regime and report on tax final settlement with the tax agencies;
4. To calculate tax, withhold tax money, calculate remuneration amounts to be enjoyed and remit tax into the State budget;
5. To give income tax receipts to tax-paying individuals; to manage, use and settle tax receipts according to the prescribed regime;
6. To withhold tax money and enjoy a remuneration of 0.5% of tax amount on regular incomes, or 1% of tax amount on irregular incomes, before remitting tax into the State budget.
Foreigners being income tax payers shall, before leaving Vietnam, have to produce income tax payment receipts.
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Article 15.- Income tax exemption or reduction shall be considered for:l
1. Cases where tax payers suffer damage or losses caused to their property, incomes and lives by natural calamities, enemy sabotage or accidents. The level of tax exemption or reduction to be considered shall correspond to the damage or loss extents but must not exceed the payable tax amount;
2. In special cases where the tax payment by individuals affects the national economic, political and/or social interests, the Finance Ministry shall propose the Prime Minister to decide on tax exemption or reduction on a case-by-case basis.
The Finance Ministry shall prescribe the procedures for income tax exemption or reduction provided for in this Article.
HANDLING OF VIOLATIONS AND COMMENDATION
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COMPLAINTS AND STATUTE OF LIMITATIONS
Complaints must be sent to the tax agencies directly managing them or issuing handling decisions within 30 days after the receipt of tax money-withholding notices, tax notices, collection orders or handling decisions.
Pending the settlement of their complaints, complainants shall still have to pay in full and on time the notified tax and fine amounts.
Complaint-receiving agencies shall have to consider and settle complaints within 15 days after receiving them. For complicated cases, that time limit may be extended but must not exceed 30 days after the receipt of complaints. For cases falling beyond their settling competence, they must transfer dossiers thereof or report thereon to competent agencies for settlement and notify such to the complainants within 10 days after receiving complaints.
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The income tax declaration and calculation made before July 1, 2004 shall comply with the provisions of the Government’s Decree No. 78/2001/ND-CP of October 23, 2001. As from July 1, 2004, such activities shall comply with the provisions of this Decree.
Article 25.- The Finance Ministry guides the implementation of this Decree.
The ministers, the heads of the ministerial-level agencies, the heads of the Government-attached agencies and the presidents of the People’s Committees of the provinces and centrally-run cities shall have to implement this Decree.
ON BEHALF OF THE GOVERNMENT
PRIME MINISTER
Phan Van Khai
- 1 Circular No. 81/2004/TT-BTC of August 13, 2004 guiding the implementation of The Governments Decree No.147/2004/ND-CP of July 23, 2004 detailing the implementation of the ordinance on income tax on high-income earners
- 2 Circular No. 05/2002/TT-BTC of January 17th, 2002, on income tax of high income earners providing guidelines for implementation of Decree 78/2001/ND-CP of the Government dated 23 October 2001 on implementation of the ordinance on income tax of high income earners.
- 3 Ordinance No. 35/2001/PL-UBTVQH10, on income tax on high-income earners, passed by the Standing Committee of National Assembly.