10 types of income subject to taxation

According to Article 3 of the Personal Income Tax LawTaxable income subject to personal income tax, excluding income exempt from tax as stipulated in Article 4 of this Law, includes:

1. Income from business

a) Income from the production and sale of goods and services

b) Income from independent professional activities of individuals holding licenses or professional certificates as prescribed by law.

Income from business activities as stipulated in this clause does not include income of individual business owners with annual revenue of 100 million VND or less.

2. Income from salaries and wages

a) Salaries, wages, and other payments of a similar nature.

b) Allowances and subsidies, excluding: allowances and subsidies prescribed by law on preferential treatment for meritorious individuals; national defense and security allowances; hazardous and dangerous allowances for industries, occupations, or jobs in workplaces with hazardous or dangerous elements; regional allowances as prescribed by law; allowances for unforeseen hardship, allowances for work accidents and occupational diseases, one-time allowances for childbirth or adoption…

3. Income from capital investment

a) Interest on loans

b) Dividend

c) Income from capital investments in other forms, excluding income from interest on government bonds.

4. Income from capital gains

a) Income from the transfer of capital shares in economic organizations

b) Income from the transfer of securities

c) Income from the transfer of capital in other forms.

5. Income from the transfer of real estate

a) Income from the transfer of land use rights and assets attached to the land

b) Income from the transfer of ownership or use rights of housing

c) Income from the transfer of land lease rights and water surface lease rights

d) Other income received from the transfer of real estate in any form.

6. Income from lottery winnings

a) Winning the lottery

b) Winning prizes in promotional activities

c) Winnings in forms of gambling

d) Winning prizes in games, contests with prizes, and other forms of prize winning.

7. Income from royalties

a) Income from the transfer or licensing of intellectual property objects

b) Income from technology transfer.

8. Income from franchising

9. Income from inheritance in the form of securities, capital shares in economic organizations and businesses, real estate, and other assets requiring registration of ownership or use.

10. Income from receiving gifts in the form of securities, capital shares in economic organizations and businesses, real estate, and other assets requiring registration of ownership or use.

2. The following are 16 types of income that are exempt from tax.

According to Article 4 of the Personal Income Tax Law, Tax-exempt income includes:

1. Income from the transfer of real estate between spouses; biological parents and their children; adoptive parents and their adopted children; father-in-law and mother-in-law and daughter-in-law; father-in-law and mother-in-law and son-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; and siblings.

2. Income from the transfer of housing, land use rights, and assets attached to residential land by individuals in cases where the individual owns only one house and one plot of land.

3. Income from the value of land use rights granted to individuals by the State.

4. Income from inheritance or gifts of real estate between spouses; biological parents and their children; adoptive parents and their adopted children; father-in-law and mother-in-law and daughter-in-law; father-in-law and mother-in-law and son-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; and siblings.

5. Income of households and individuals directly engaged in agricultural, forestry, salt production, aquaculture, and fishing activities that have not been processed into other products or have only undergone basic processing.

6. Income from the conversion of agricultural land allocated by the State to households and individuals for production.

7. Income from interest on deposits at credit institutions, interest from life insurance contracts.

8. Income from remittances

9. The portion of wages for night work and overtime work shall be paid at a higher rate than the wages for daytime work and work during regular hours as stipulated by law.

10. Pension payments are made monthly by the Social Insurance Fund; pension payments are also made monthly by voluntary retirement funds.

11. Income from scholarships, including:

a) Scholarships received from the state budget

b) Scholarships received from domestic and foreign organizations under their scholarship support programs.

12. Income from compensation under life and non-life insurance contracts, compensation for work-related accidents, state compensation, and other compensation as prescribed by law.

13. Income received from charitable funds established or recognized by competent state authorities, operating for charitable and humanitarian purposes, and not for profit.

14. Income received from foreign aid for charitable and humanitarian purposes, in the form of government and non-governmental organizations, subject to approval by competent state agencies.

15. Income from salaries and wages of Vietnamese seafarers working for foreign shipping companies or Vietnamese shipping companies engaged in international transport.

16. Income of individuals who are ship owners, individuals who have the right to use ships, and individuals who work on ships from activities providing goods and services directly serving offshore fishing and aquaculture operations.

Therefore, when taxable income is generated and is not exempt from tax, the income earner must pay personal income tax as prescribed.