Personal income tax (PIT) in 2019 is the amount of money that individuals with incomes above a prescribed tax threshold must deduct from their salary or other sources of income to pay into the state budget after deducting applicable allowances.
Personal income tax applies to resident individuals, and taxable income includes income earned both within and outside the territory of Vietnam, regardless of where the income is paid.
Furthermore, for non-resident individuals, taxable income is income arising in Vietnam, regardless of where the income is paid and received.
Tax rate:
The personal income tax rate on income from salaries and wages of resident individuals is applied according to the progressive tax rate schedule as stipulated in Article 22 of the Personal Income Tax Law, specifically as follows:
| Tax bracket | Taxable income per year (million VND) | Taxable income per month (million VND) | Tax rate (%) |
|
1
|
Go to 60 | Go to 5 | 5 |
|
2
|
On 60 to 120 | Up to 10 | 10 |
|
3
|
On 120 to 216 | On 10 to 18 | 15 |
|
4
|
On 216 to 384 | On 18 to 32 | 20 |
|
5
|
On 384 to 624 | On 32 to 52 | 25 |
|
6
|
On 624 to 960 | On 2 to 80 | 30 |
|
7
|
On 960 | On 80 | 35 |
The taxable income subject to this Tax Schedule is income of resident individuals Taxable income from salaries and wages after deducting personal allowances, mandatory insurance contributions, and charitable, humanitarian, and educational contributions.
Total Income Tax = Total Taxable Income – Personal Deductions – Mandatory Insurance Contributions – Charitable, Humanitarian, and Educational Contributions
Personal income tax deductions
1. Personal deductions for dependents.
For taxpayers 9 million VND/month, 108 million VND/year.
Personal deductions for the taxpayer:
- Taxpayers with multiple sources of income from salaries, wages, and business activities can choose to claim personal deductions for themselves at only one location at a time (calculated on a monthly basis).
- For foreigners residing in Vietnam, the personal allowance is calculated from January or from the month of arrival in Vietnam (in the case of an individual's first presence in Vietnam) until the month the employment contract ends and they leave Vietnam within the tax year (calculated in full by month).
- If, during the tax year, an individual has not claimed any personal deductions or has claimed deductions for less than 12 months, they are entitled to claim the full 12 months of deductions when filing their tax return as per regulations.
2. Personal deductions for dependents
For each dependent: 3,6 million VND/month.
Personal deductions for dependents:
- Taxpayers are entitled to a personal allowance for dependents if they are registered for tax and have been issued a tax identification number.
- When taxpayers register for dependent deductions, the tax authorities will issue a tax identification number for the dependent and the dependent deduction will be provisionally calculated for the year from the date of registration. For dependents who have already been registered for dependent deductions before the effective date of this Circular, the deduction will continue until a tax identification number is issued.
- If a taxpayer has not claimed the dependent deduction for a dependent in the tax year, they are entitled to claim it from the month the obligation to support arises when the taxpayer files their tax return and registers for the dependent deduction. For other dependents as guided in section d.4, point d, clause 1 of this Article, the deadline for registering the dependent deduction is no later than December 31st of the tax year; after this deadline, the dependent deduction will not be claimed for that tax year.
- Each dependent can only be claimed as a tax deduction once by one taxpayer in a tax year. If multiple taxpayers share a dependent they are responsible for supporting, they must agree among themselves to register the dependent as a dependent with one taxpayer.
3. Deductions for insurance contributions and voluntary retirement fund contributions.
- Insurance contributions include: social insurance, health insurance, unemployment insurance, and professional liability insurance for certain occupations that are required to participate in mandatory insurance.
- Contributions to voluntary retirement funds, purchase of voluntary retirement insurance.
Contributions to voluntary retirement funds and voluntary retirement insurance are deductible from taxable income based on actual income, but not exceeding one (01) million VND/month for employees participating in voluntary retirement products as guided by the Ministry of Finance, including both the amount paid by the employer for the employee and the amount paid by the employee themselves (if any), even in cases of participating in multiple funds. The basis for determining deductible income is a copy of the payment receipt (or fee payment) issued by the voluntary retirement fund or insurance company.
4. Deductions for charitable, humanitarian, and educational contributions.
Charitable, humanitarian, and educational contributions made in any given year are deductible from taxable income in that tax year; any remaining undeducted amount cannot be deducted from taxable income in the following tax year.
The maximum deduction shall not exceed the taxable income from salaries, wages, and business income of the tax year in which the charitable and humanitarian contributions and educational support are made.
