NEWS

Increase the personal allowance for taxpayers to VND 11 million/month from July 1, 2020.

EXPERTIS
04/06/2020

On June 2, 2020, the Standing Committee of the National Assembly issued a decision to increase the rate. The personal allowance will be increased from 9 million VND/month to 11 million VND/month, and the allowance for dependents will be increased from 3,6 million VND/month to 4,4 million VND/month.

Resolution 954 on adjusting the personal income tax deduction for dependents.

This resolution takes effect from the date 01 month 7 year 2020 , and Applicable from the tax periodYes year 2020.

The personal allowance stipulated in Clause 1, Article 19 of the 2007 Personal Income Tax Law (amended and supplemented by the 2012 amended Personal Income Tax Law) is adjusted as follows:

– The personal tax deduction is VND 11 million/month (VND 132 million/year). Currently, this deduction is 9 million VND/month (108 million VND/year).

- The deduction level for each dependent is 4,4 million / month. Currently, this deduction amount is 3,6 million VND per month.

With the increase in personal tax deductions to 11 million VND/month, it doesn't mean that individual only spends within the 11 million VND range; this only means... This is the amount that can be deducted before calculating tax.After deducting social insurance contributions (including health insurance and unemployment insurance) from salaries and wages, as well as personal allowances and charitable/humanitarian contributions, the remaining amount is the income used as the basis for calculating personal income tax.

Accordingly, the income thresholds for tax exemption will be raised to VND 11 million/month (no dependents); VND 15,4 million/month (with 1 dependent); and VND 19,8 million/month (with 2 dependents). Thus, a large proportion of those currently paying personal income tax at level 1 (accounting for up to 44% of personal income tax payers) will move to the tax-exempt category. Those with incomes below VND 15 million/month and with dependents will not have to pay tax.

Personal income tax rates remain based on a progressive tax scale, with the lowest rate being 5% and the highest being 35%. The remaining amount after personal income tax is the taxpayer's responsibility.

Cases where tax has been provisionally paid based on the personal allowance as stipulated in Personal Income Tax LawThe personal allowance starts from 9 million VND/month and the allowance for dependents starts from 3,6 million VND/month.The revenue figure has been recalculated.Yes income cIndividuals must pay the personal allowance as stipulated in this Resolution when settling their personal income tax.ăm 2020.