THE GOVERNMENT
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SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
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No. 129/2013/ND-CP

Hanoi, October 16, 2013

DECREE

ON PENALTIES FOR ADMINISTRATIVE VIOLATIONS PERTAINING TO TAXATION AND ENFORCEMENT OF ADMINISTRATIVE DECISIONS ON TAXATION

Pursuant to the Law on Government organization dated December 25, 2001;
Pursuant to the Law on Handling administrative violations dated June 20, 2012;
Pursuant to the Law on Tax administration dated November 29, 2006;
Pursuant to the Law on the amendments to the Law on Tax administration dated November 20, 2012;
At the request of the Minister of Finance;
The Government promulgates a Decree on penalties for violations pertaining to taxation and enforcement of administrative decisions on taxation,
Chapter 1.

ADMINISTRATIVE PENALTIES FOR VIOLATIONS PERTAINING TO TAXATION

SECTION 1. GENERAL PROVISIONS
Article 1. Scope of regulation and objects of administrative penalties for violations pertaining to taxation
1. Scope of regulation:
This Chapter deals with the violations pertaining to taxation, penalties, remedial measures, the power to impose penalties and implement decisions on administrative penalties for violations pertaining to taxation.
Administrative violations pertaining to taxation include violations against the Law on Tax administration, the Law on the amendments to the Law on Tax administration (hereinafter referred to as the Law on Tax administration); taxes, land rents, water surface rents, land levy; revenues from mineral extractions and other government revenues collected by tax authorities as prescribed by law.
This Decree does not apply to administrative violations pertaining to fees, charges, invoices, and administrative violations pertaining to taxation on exported and imported goods.
If International Agreements to which Vietnam is a signatory prescribes penalties for administrative violations pertaining to taxation differently from this Decree, such International Agreements shall apply.
2. Objects of penalties for administrative violations pertaining to taxation
a) The taxpayers that commit administrative violations pertaining to taxation;
b) The credit institutions defined by the Law on credit institutions (hereinafter referred to as credit institutions) that commit administrative violations pertaining to taxation;
c) Relevant organizations and individuals;
Article 2. Statute of limitation, time limit for imposition of penalties for administrative violations pertaining to taxation
1. For violations against tax procedures the time limit for issuing the decision on penalties is 02 years from the day on which the violation is committed. The day on which the violation is committed is the day succeeding the deadline for tax procedure according to the Law on Tax administration. For electronic tax procedure, the day on which the violation is committed is the day succeeding the deadline for procedure prescribed by a competent authority.
2. For tax evasion that are not liable to criminal prosecutions, understatement of tax payable or overstatement of tax refund, the time limit for issuing the decision on penalties is 05 years from the day on which the violation is committed.
The day on which the aforesaid violation is committed is the day succeeding the deadline for submitting the tax statement on which tax is overstated, evaded, falsified, or the day succeeding the date of the decision on tax refund, tax exemption or tax reduction.
3. Where an individual is charged or prosecuted, or a decision to bring the individual to criminal proceedings is issued, then a decision to suspend the investigation or the case is issued, but signs of administrative violations pertaining to taxation are found, the agency that issues the decision to suspend the investigation or suspend the case shall send the decision together with the case documents to the agency competent to impose penalties for administrative violations pertaining to taxation within 03 days from the day on which the decision on suspension is issued. In this case, the statute of limitations shall comply with Clause 1 and Clause 2 of this Article. The period during which the case is examined is included to the time limit for imposing penalties for administrative violations.
4. Time limit for collecting tax arrears
After the deadline for imposing penalties for administrative violations pertaining to taxation, the taxpayer is exempt from penalties but still have to pay the outstanding tax and late payment interest over the previous 10 years from the day on which the violation is discovered. If the taxpayer does not apply for tax registration, he shall pay the outstanding tax and late payment interest over the entire period before the violation is discovered.
Article 3. Penalties for administrative violations pertaining to taxation
1. Warnings.
A warning shall be given if the violation is not severe, under mitigating circumstances, and must receive a warning as prescribed.
2. Fines
a) For violations against tax procedures:
A fine of up to 200 million VND shall be incurred by an organization that violates tax procedure. The maximum fine incurred by an individual that violates tax procedure is 1/2 the fine incurred by an organization according to the Law on Handling administrative violations.
The fines mentioned in Articles 5, 6, 7, 8 and 9 of this Decree are applied to organizations. The fines incurred by individuals are 1/2 of those. Households shall incur the same level of fines as individuals.
When imposing a fine for a violation against tax procedure, it is the average level of the fine bracket for such violation. For every aggravating circumstance or mitigating circumstance, the average level shall be respectively increased or decreased by 20%.
A mitigating circumstance shall cancel out an aggravating circumstance and vice versa. The fine must not be reduced below the minimum level of the fine bracket, and must not be increased over the maximum level of the fine bracket.
b) For understatement of tax payable or overstatement of tax refund: a fine of 20% of the outstanding tax or tax refund shall be imposed, regardless the taxpayer is an organization or an individual.
c) For tax evasion: a fine of 1 – 3 times of the evaded tax. The fines mentioned in Article 11 of this Decree are applied to organizations. The fines incurred by individuals are 1/2 of those.
d) A fine in proportion to the amount that is not withdrawn and transferred to government budget shall be imposed for the violations mentioned in Article 12 of this Decree.
Article 4. Cases in which penalties for administrative violations pertaining to taxation are exempt
1. The cases mentioned in Article 11 of the Law on Handling administrative violations
2. The taxpayer has corrected the misstatement and paid tax sufficiently before the tax authority issues a decision on tax inspection at the taxpayer’s premises.
SECTION 2. ADMINISTRATIVE VIOLATIONS PERTAINING TO TAXATION, PENALTIES, AND REMEDIAL MEASURES
Article 5. Penalties for late submission of the application for tax registration, late notification of changes in the application for tax registration
1. A warning shall be imposed for submitting the application for tax registration or notifying changes in the application for tax registration to the tax authority 01 – 10 days behind schedules with mitigating circumstances.
2. A fine of from 400,000 VND to 1,000,000 VND shall be imposed for submitting the application for tax registration or notifying changes in the application for tax registration to the tax authority 01 – 30 days behind schedule (except for the case mentioned in Clause 1 of this Article).
3. A fine of from 800,000 VND to 2,000,000 VND shall be imposed for one of the violations below:
a) Submitting the application for tax registration or notifying changes in the application for tax registration more than 30 days behind schedule.
b) Failing to notify changes in the application for tax registration.
c) Failing to submit the application for tax registration without incurring tax.
Article 6. Penalties for providing insufficient information in the tax statement
If the incorrect or insufficient provision of information in the tax statement mentioned in Article 31 of the Law on Tax administration (unless the taxpayer is permitted to make a supplementary statement) is discovered after the deadline for submitting the tax statement:
1. A fine of from 400,000 VND to 1,000,000 VND shall be imposed for making a tax statement with insufficient or incorrect information on the list of sale invoices of purchased and sold goods/services, or on other documents related to tax obligations.
2. A fine of from 600,000 VND to 1,500,000 VND shall be imposed for making a tax statement with insufficient or incorrect information on invoices and other documents related to tax obligations.
3. A fine of from 600,000 VND to 2,500,000 VND shall be imposed for making a tax statement with insufficient or incorrect information on the provisional tax statement or final tax statement.
4. A fine of from 1,200,000 VND to 3,000,000 VND shall be imposed for one of the violations below:
a) The violations mentioned in Clause 5 Article 10 and Clause 7 Article 11 of this Decree.
b) Making understatement of tax payable in the quarterly tax statement before the deadline for submitting the final tax statement.
Article 7. Penalties for late submission of the tax statement
1. A warning shall be given for late submission of the tax statement 01 – 05 days behind schedule under mitigating circumstances.
2. A fine of from 400,000 VND to 1,000,000 VND shall be imposed for late submission of the application for tax registration 01 – 10 days behind schedule (except for the case mentioned in Clause 1 of this Article).
3. A fine of from 800,000 VND to 2,000,000 VND shall be imposed for late submission of the application for tax registration 10 – 20 days behind schedule.
4. A fine of from 1,200,000 VND to 3,000,000 VND shall be imposed for late submission of the application for tax registration 20 – 30 days behind schedule.
5. A fine of from 1,600,000 VND to 4,000,000 VND shall be imposed for late submission of the application for tax registration 30 – 40 days behind schedule.
6. A fine of from 2,000,000 VND to 5,000,000 VND shall be imposed for one of the violations below:
a) Submitting the tax statement 40 – 60 days behind schedule.
b) Submitting the tax statement 90 days behind schedule without incurring tax.
c) Failing to submit the application for tax registration without incurring tax.
d) Submitting the quarterly provisional tax statement 90 days behind schedule before the deadline for submitting the final tax statement.
7. The deadline for submitting the tax statement mentioned in this Article is the extended deadline mentioned in Article 33 of the Law on Tax administration.
8. The fines mentioned in this Article shall not apply to the cases in which the deadline for submitting the tax statement or paying tax is extended as prescribed by legislation on tax administration.
9. Apart from incurring the penalties mentioned in Clauses 1, 2, 3, 4, 5, 6 of this Article, the taxpayer shall pay a late payment interest if the late submission of the tax statement leads to late payment of tax as prescribed by law.
Article 8. Penalties for violations against regulations on providing information related to the determination of tax obligations
The violations of the regulations on providing information related to the determination of tax obligations but do not lead to insufficient tax payment or tax evasion shall incur the penalties below:
1. A fine of from 400,000 VND to 1,000,000 VND shall be imposed for one of the violations below:
a) Providing information, documents, and legal documents related to tax registration at the request of the tax authority 05 working days or more behind schedule.
b) Providing information, documents, and accounting books related to tax calculation at the request of tax authority 05 working days or more behind schedule.
c) Providing incorrect information, documents, and accounting books related to tax calculation at the request of the tax authority.
2. A fine of from 800,000 VND to 2,000,000 VND shall be imposed for one of the violations below:
a) Providing incorrect, insufficient information, documents, receipts, invoices, and accounting books related to tax calculation, the account numbers, deposit account balance to competent authorities on request.
b) Providing insufficient, incorrect data, information about the tax obligation that must be registered without reducing the tax obligation to government budget.
a) Not providing, providing incorrect, insufficient information and documents related to the deposit accounts at credit institutions, State Treasuries, and debts owed by third parties within 03 working days from the day on which the request of the tax authority is received.
Article 9. Penalties for violations against regulations on implementation of decisions on tax inspections, enforcement of administrative decisions on taxation.
1. A fine of from 800,000 VND to 2,000,000 VND shall be imposed for one of the violations below:
a) Refusing to receive the decision on inspection or enforcement of administrative decisions on taxation.
b) Failing to implement the decision on tax inspection within 03 working days from the deadline for implementation.
c) Denying, delaying, avoiding providing documents, invoices, receipts, accounting books related to tax obligation within 06 working hours since the receipt of the request from of the competent authority during the inspection at the taxpayer’s premises.
d) Denying, delaying, avoiding providing documents, invoices, receipts, accounting books related to tax obligation within 06 working hours since the receipt of the request of the competent authority during the inspection at the taxpayer’s premises.
2. A fine of from 2,000,000 VND to 5,000,000 VND shall be imposed for one of the violations below:
a) Failing to provide information, documents and accounting books related to tax calculation at the request of the competent authority during the inspection at the taxpayer’s premises.
b) Failing to implement or wrongly implementing the decision on sealing documents, safes, warehouses, materials, machinery, equipment, workshops being the basis for verifying tax calculation.
c) Breaking or changing the seal of the competent authority without permission.
d) Failing to sign the inspection record within 05 working days from the receipt of the inspection record.
dd) Failing to implement the conclusion on tax inspection, decision on enforcement of administrative decisions on taxation made by competent authorities.
Article 10. Penalties for understatement of tax payable or overstatement of refundable tax
1. The cases of understatement of tax payable and overstatement of refundable tax include:
a) The taxpayer understates the amount of tax payable or overstates the amount of tax refunded, exempted, or reduced, but the operations that incur tax are sufficiently recorded in accounting books, invoices and receipts.
b) The taxpayer mentioned in Point a Clause 1 of this Article has paid the outstanding tax to government budget when the understatement or overstatement is discovered by a competent authority before a record on administrative violations pertaining to taxation is made by the competent authority or record on tax inspection is made by the tax authority.
c) The false statement of the taxpayer has been confirmed and considered tax invasion by the tax inspector, but it is the offence of the taxpayer under mitigating circumstances, and the taxpayer has voluntarily pay tax to government budget before a decision on penalties is issued by the competent authority. In this case the tax authority shall make a record on insufficient tax statement.
d) Illegal invoices and receipts are used for recording values of purchased goods and services in order to reduce the amount of tax payable or increase the amount of tax refunded, exempted, or reduced, but the buyer proves that the sellers are responsible for the use of illegal invoices, and bookkeeping has been sufficiently done by the buyer.
2. The fines for the violations mentioned in Clause 1 of this Article is 20% of the outstanding tax, the excess refund, reduction, or exemption of tax as prescribed by legislation on taxation.
3. The tax authority shall calculate outstanding tax, the number of days of late payment, the late payment interest, fines, and issue a decision on penalties for administrative violations.
4. In the cases mentioned in Clause 1 of this Article, the outstanding tax and late payment interest shall be paid to government budget apart from the penalties mentioned in Clause 2 of this Article.
5. If the false statement made by the taxpayer does not lead to an increase in the amount of tax payable or a decrease in the amount of tax exempted or reduced, or tax refund has not been given, no penalty shall be imposed as prescribed in this Article, and Clause 4 Article 6 of this Decree shall apply.
Article 11. Penalties for tax evasion
The taxpayer that evades tax according to Article 108 of the Law on Tax administration, the fine shall be imposed on the amount of tax evaded as follows:
1. A fine equal to the amount of tax evaded shall be imposed if tax evasion is the first offence of the taxpayer and does not fall into the cases mentioned in Article 10 of this Decree, or it is the second offence with at least 02 mitigating circumstances when the taxpayer commits one of the violations below:
a) Failing to submit the application for tax registration, failing to submit the tax statement or submit the tax statement after 90 days from the deadline for submitting the tax statement mentioned in Clauses 1, 2, 3, and 5 Article 32 of the Law on Tax administration, or from the extended deadline for submitting the tax statement mentioned in Article 33 of the Law on Tax administration, except for the cases mentioned in Clause 6 Article 7 of this Decree.
b) Using illegal or invalid invoices and documents for making the tax statement that leads to a decrease in the amount of tax payable or an increase in the amount of tax refunded, exempted, or reduced.
c) Making false documents about the destruction of goods that leads to a decrease in the amount of tax payable or an increase in the amount of tax refunded, exempted, or reduced.
d) Issuing sale invoices that contain incorrect quantities or values to understate tax.
dd) Failing to record the revenues related to tax calculation in accounting books; failing to make statements or making incorrect statements that lead to a decrease in the amount of tax payable or an increase in the amount of tax refunded, exempted, or reduced.
e) Failing to issuing invoices when selling goods or services, or writing lower values of goods than the actual values on invoices that are discovered after the deadline for submitting the tax statement.
g) Using tax-free goods, goods eligible for tax exemption for improper purposes without reporting the change of their purposes and submit tax statement to the tax authority.
h) Falsifying the accounting books and documents that leads to a decrease in the amount of tax payable or an increase in the amount of tax exempted or reduced.
i) Destroying the accounting books and documents that leads to a decrease in the amount of tax payable or an increase in the amount of tax exempted or reduced.
k) Using illegal invoices and documents in other cases to miscalculate the amount of tax payable or refunded.
l) The taxpayer carries on his business during the suspension period.
2. A fine of equal to 1.5 times the tax evaded shall be imposed if the taxpayer commits one of the violations in Clause 1 of this Article for the first time under an aggravating circumstance, or commits it for the second time under a mitigating circumstance.
3. A fine of equal to 2 times the tax evaded shall be imposed if the taxpayer commits one of the violations in Clause 1 of this Article for the first time under aggravating circumstances, or commits it for the second time under a mitigating circumstance.
4. A fine of equal to 2.5 times the tax evaded shall be imposed if the taxpayer commits one of the violations in Clause 1 of this Article for the second time under an aggravating circumstance, or commits it for the third time without any mitigating circumstance.
5. A fine of equal to 3 times the tax evaded shall be imposed if the taxpayer commits one of the violations in Clause 1 of this Article for the second time under two aggravating circumstances or more, or commits it for the third time under an aggravating circumstance, or commit it for the fourth time onwards.
6. Apart from the penalties for tax evasion mentioned in Clauses 1, 2, 3, 4, 5 of this Article, the evaded tax shall be paid to government budget. the late payment interest on the evaded tax is exempt.
The tax evaded is the amount of tax payable to government budget as prescribed by law, which is found and specified by the competent authority in the inspection record.
7. If the violations mentioned in Points b, c, d, dd, e, g, h, i, k Clause 1 of this Article are discovered before the deadline for submitting the tax statement, or discovered after such deadline but the amount of tax payable is not reduced, or tax refund is not given, or the amount of tax refunded or reduced is not increased, only the violations pertaining to tax procedure mentioned in Clause 4 Article 6 of this Decree shall be penalized.
Article 12. Penalties for administrative violations committed by credit institutions
The credit institution that fails to transfer tax, fines, interest on late payment of tax, interest on late payment of fines from the taxpayer’s account to the state account under the decision on enforcement made by the tax authority shall incur penalties if at that time, the account balance of the taxpayer is ample to pay such amounts. Within 10 days from the deadline for making the transfer as prescribed in Clause 2 Article 28 of this Decree, the tax authority shall make a record and issue a decision to penalize the credit institution. The fine is proportional to the amount of money that is not transferred to government budget under the decision on enforcement.
The credit institution is exempt from penalties in the case mentioned in Point a Clause 1 Article 114 of the Law on Tax administration. In this case, the tax authority still take measures for sufficiently collecting tax, interest of late payment of tax, fine, and interest on late payment of fine from the taxpayer.
Article 13. Penalties for administrative violations committed by relevant organizations and individuals
1. A fine of from 2,500,000 VND to 5,000,000 VND shall be incurred by any individual, or a fine of from 5,000,000 VND to 10,000,000 VND shall be incurred by any organization that collaborates, conceals the tax evasion of the taxpayer, fails to implement the decision on enforcement, (except for the failure to transfer money from the taxpayer’s account prescribed in Article 12 of this Decree). A criminal prosecution shall be initiated if signs of criminal offences are found.
2. Any organization or individual that fails to provide information or provides insufficient information about tax payable by the taxpayer, his account at credit institutions or State Treasuries shall incur the penalties mentioned in Clause 1 of this Article.
3. The party the guarantee the fulfillment of tax obligation shall pay tax, interest on late payment of tax, fines, and interest on late payment of fines on the taxpayer behalf’s in accordance with the guarantee agreements if the taxpayer fails to pay them to government budget.
The guarantor fails to pay the outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines (if any) on the taxpayer’s behalf when the taxpayer fails pay them by the deadline imposed by the tax authority, the guarantor shall pay an interest on the deferred payment of tax at 0.07% per day, and an interest on the deferred payment of fine at 0.05% per day, and be subject to enforcement measures prescribed in Clause 3 Article 18 and Article 19 of this Decree,. The procedure for taking enforcement measures are similar to those applied to taxpayers.
SECTION 3. THE POWER TO IMPOSE PENALTIES, EXEMPT, REDUCE FINES FOR ADMINISTRATIVE VIOLATIONS PERTAINING TO TAXATION
Article 14. The power to impose penalties for administrative violations pertaining to taxation of tax authorities
1. Duty officials of tax authorities are entitled to:
a) Give warnings.
b) Impose fines of up to 1,000,000 for the violations pertaining to tax procedure prescribed in this Decree.
2. The leader of the tax team is entitled to:
a) Give warnings.
b) Impose fines of up to 5,000,000 for the violations pertaining to tax procedure prescribed in this Decree.
3. Directors of Sub-departments of taxation, within the locality under their management, are entitled to:
a) Give warnings.
b) Impose fines of up to 5,000,000 for the violations mentioned in Articles 5, 6, 7, 8, 9 and 13 of this Decree.
c) Impose fines for the violations mentioned in Articles 10, 11, and 12 of this Decree.
d) Take the remedial measures mentioned in Clause 4 Article 10 and Clause 6 Article 11 of this Decree.
4. Directors of Departments of taxation, within the locality under their management, are entitled to:
a) Give warnings.
b) Impose fines of up to 140,000,000 for the violations pertaining to tax procedure prescribed in Articles 5, 6, 7, 8, 9 and 13 of this Decree.
c) Impose fines for the violations mentioned in Articles 10, 11, and 12 of this Decree.
d) Take the remedial measures mentioned in Clause 4 Article 10 and Clause 6 Article 11 of this Decree.
5. The Director of the General Department of Taxation is entitled to:
a) Give warnings.
b) Impose fines of up to 200,000,000 for the violations pertaining to tax procedure prescribed in Articles 5, 6, 7, 8, 9 and 13 of this Decree.
c) Impose fines for the violations mentioned in Articles 10, 11, and 13 of this Decree.
d) Take the remedial measures mentioned in Clause 4 Article 10 and Clause 6 Article 11 of this Decree.
6. The power to impose penalties for violations pertaining to tax procedure of the persons mentioned in Clauses 1, 2, 3, 4, and 5 of this Article is applied to violations committed by organizations. The level of fine they may impose on individuals is 1/2 of that applied to organizations. The power to impose penalties for understatement of the amount of tax payable or overstatement of the amount of tax refunded, or tax evasion shall comply with Clause 2 Article 109 of the Law on Tax administration.
Article 15. The power to impose penalties for administrative violations pertaining to taxation of Presidents of the People’s Committees
Article 15. The power to impose penalties for administrative violations pertaining to taxation of Presidents of the People’s Committees shall comply with legislation on handling administrative violations.
Article 16. Exemption, reduction of fines for administrative violations pertaining to taxation; exemption and reduction procedure
1. The individual that carries a fine from 3,000,000 for administrative violations pertaining to taxation is entitled to request a reduction or exemption of the fine if they face special or unexpected economic difficulties due to natural disasters, conflagration, calamities, accidents, epidemics, or fatal diseases.
The maximum reduction is the remaining fine in the decision on penalties and shall not exceed the value of damaged assets, goods, and treatment cost.
2. An application for fine exemption or reduction consists of:
a) A written request for fine exemption or reduction, specifying:
– The reasons for requesting the exemption or reduction;
– The values of damaged assets and goods due to natural disasters, conflagration, calamities, accidents, epidemics, the cost of treatment for fatal diseases;
– The amount of fine incurred.
b) If the damage to assets or disease treatment cost is covered by an insurer, the application must be enclosed with a notarized photocopy of the certification of insurance payout for damage or treatment cost made by the insurer.
c) A certification made by the People’s Committee of the commune where the taxpayer resides or where damaged assets are situated. If the individual suffers from a fatal disease, it is required to have a certification of the medical facility and documents proving the treatment cost.
3. The procedure and power to decide fine exemption or reduction shall comply with Clause 2 Article 77 of the Law on Handling administrative violations.
4. No reduction of exemption shall be given if the decision on penalties for administrative violations pertaining to taxation has been implemented or the time limit for resolving complaints has passed as prescribed by law.
Chapter 2.

ENFORCEMENT OF ADMINISTRATIVE DECISIONS ON TAXATION

SECTION 1. GENERAL PROVISIONS
Article 17. Scope of regulation and subjects of application
1. Scope of regulation:
This Chapter deals with the cases of enforcement, measures for enforcement of administrative decisions on taxation, principles, power, procedure for taking measures for enforcement of administrative decisions on taxation (except for suspension of customs procedure for exported and imported goods).
The enforcement mentioned in this Article is applied to administrative decisions on taxation, including: decision on penalties for administrative violations pertaining to taxation, decision on remedial measures, decisions on damage compensation, and other administrative decisions on taxation as prescribed by law, notification on tax imposition, notification of outstanding tax, notification of interest on late payment of tax.
2. Subjects of application
a) The organizations and individuals subject to enforcement of administrative decisions on taxation as prescribed by the Law on Tax administration.
b) Tax authorities and tax officials.
c) The persons entitled and obliged to enforce administrative decisions on taxation.
d) State agencies, organizations and individuals related to the enforcement of administrative decisions on taxation.
Article 18. Cases of enforcement of administrative decisions on taxation.
1. The cases in which taxpayers are subject to enforcement of administrative decisions on taxation:
a) The taxpayer owes tax and interest on late payment of tax over 90 days from the deadline for paying tax or the extended deadline for paying tax.
b) The taxpayer that owes tax, interest on late payment of tax and fines is suspected of concealing goods or making a getaway.
c) The taxpayer fails to comply with the decision on penalties within 10 days from the day on which the decision is received. If the taxpayer fails to implement the decision on penalties within the time limit that is longer than 10 days, the decision shall be enforced (unless the decision on penalties is delayed or suspended).
2. The credit institution fails to comply with the decision on administrative penalties for violations pertaining to taxation according to the Law on Tax administration and the Law on Handling administrative violations.
3. If the payment of tax, interest on late payment of tax, fines, and interest on late payment of fines is guaranteed and the taxpayer fails to make such payment to government budget by the deadline, the guarantor shall make such payment on the taxpayer’s behalf. If those amounts are not sufficiently paid after 90 days from the deadline, the guarantor shall be subject to enforcement in accordance with the Law on Tax administration and the Law on Handling administrative violations.
4. State Treasury fails to transfer money from the account of the entity subject to enforcement (hereinafter referred to as subject) to government budget under the decision on administrative penalties for violations pertaining to taxation issued by the tax authority.
5. Relevant organizations and individuals fail to comply with decision on administrative penalties for violations pertaining to taxation issued by competent authorities.
6. Where the tax authority issues a decision to allow the taxpayer to pay outstanding tax and fines in installments according to the Decrees elaborating the implementation of the Law on Tax administration, the Law on the amendments to the Law on Tax administration, and Article 79 of the Law on Handling administrative violations, enforcement measures shall not be taken during the payment term.
Article 19. Enforcement measures
The measures for enforcing administrative decisions on taxation include:
1. Withdraw money from the subject’s accounts at State Treasuries and credit institutions; request account blockade.
2. Deduct part of the salary or income.
3. Invalidate invoices.
4. Distrain assets, sell distrained assets at auctions to recover outstanding tax, interest on late payment of tax, fines, interest on late payment of fines.
5. Collect money or other assets of the subject that are held by other organizations or individuals.
6. Revoke the Certificate of Business registration, Certificate of Enterprise registration, license for establishment and operation, or practice certificate.
7. The application for the enforcement measures mentioned in Clauses 1, 2, 3, 4, 5 and 6 is specified in Sections 2, 3, 4, 5, 6, and 7 of this expenses. If a decision on taking the next measure has been issued but the conditions for taking the previous measure are available, the issuer of the decision on enforcement is entitled to take the previous measure to sufficiently collect tax and fines.
If the taxpayer that owes outstanding tax, interest on late payment of tax, fines, or interest on late payment of fines is suspected of making a getaway or concealing his assets, the person competent to issue the enforcement decision shall take appropriate enforcement measures to ensure the repayment of tax debt.
The Ministry of Finance shall specify the order and time limit for each enforcement measure, the procedure for identifying taxpayers suspected of making a getaway or concealing their assets.
Article 20. Sources of money and distrained assets of the organizations enforced to implement administrative decisions on taxation
The sources of money and distrained assets of the organizations enforced to implement administrative decisions on taxation shall comply with legislation on penalties for administrative violations and relevant laws.
Article 21. The power to decide enforcement of administrative decisions on taxation
The persons below have the power to issue decisions on enforcement of administrative decisions on taxation mentioned in Article 19 of this Decree, and are responsible for organizing the enforcement:
1. Directors of Sub-departments of taxations, Directors of Departments of Taxation, the Director of the General Department of Taxation have the power to decide enforcement of administrative decisions on taxation and take the enforcement measures mentioned in Clauses 1, 2, 3, 4, 5, Article 19 of this Decree.
2. Presidents of the People’s Committees of districts and provinces have the power to decide the enforcement of decision on penalties for administrative violations pertaining to taxation under their management.
3. If the enforcement measures in Clause 6 Article 19 of this Decree are taken, the tax authority shall request the agency that issued the Business certificates, Certificate of Business registration, license for establishment, or practice certificate to revoke such certificate or license.
Article 22. The power to decide enforcement of administrative decisions on taxation
1. The persons mentioned in Article 21 of this Decree have the power to issue decision on enforcement of administrative decisions on taxation they issue or their inferiors issue without adequate resources to carry out and request the superior agency in writing to issue the decision on enforcement..
2. The Directors of Departments of Taxation shall issue decisions on if the Director of the Sub-department of taxation but the subject is under the management of multiple sub-departments of taxation in the same province.
3. The Director of the General Department of Taxation shall issue decisions on enforcement if the subject is under the management of multiple Departments of Taxation.
Article 23. Responsibility to implement decisions on enforcement
1. The person that issues the decision on enforcement of administrative decisions on taxation is responsible for organizing the implementation of the decision on enforcement.
The person that issues the decision on enforcement of administrative decisions on taxation shall immediately send the decision on enforcement to relevant organizations and individuals, and organize the enforcement of the decisions on penalties they and their inferiors issue.
2. The organization or individual that receives the decision on enforcement shall implement it and incur the cost of enforcement.
3. The People’s Committee of the commune where the subject is situated shall direct relevant agencies to cooperate with the tax authority in the enforcement of administrative decisions on taxation.
4. The police are responsible for the order, safety, and shall cooperate with the tax authority during the enforcement at the request of the person that issues the decision on enforcement.
5. The organizations and individuals related to the subject shall cooperate in the enforcement at the request of the person that issues the decision on enforcement.
Article 24. Time limits for implementing decisions on enforcement
1. A decision on enforcement of administrative decisions on taxation takes effect within 01 year from its issuance date. The decisions on enforcement of administrative decisions on taxation by transferring money from the subject’s account shall take effect within 30 days from its issuance date.
2. If the subject deliberately avoids or delays the implementation of the decision on enforcement, the time limit shall begin again when the avoidance or delay is stopped.
3. The measures for enforcement of administrative decisions on taxation mentioned in Clause 1 of this Article are terminated when the enforced tax, interest on late payment of tax, fines, interest on late payment of fines are paid to government budget. The basis for terminating the decision on tax enforcement is the documents proving the sufficient payment of tax, interest on late payment of tax, fines, interest on late payment of fines to government budget that are certified by State Treasuries, tax collectors, or the credit institutions that transfer money from the subject’s accounts.
SECTION 2. ENFORCEMENT BY WITHDRAWING MONEY FROM TAXPAYER’S ACCOUNTS; REQUEST FOR ACCOUNT BLOCKADE
Article 25. Entities having their accounts withdrawn
The organizations and individuals that fail to comply with the decisions on penalties, decisions on remedial measures, administrative decisions on taxation, or fails to pay for the enforcement cost shall have their accounts at credit institutions and State Treasury withdrawn.
Article 26. Verifying information about subject’s accounts
1. The taxpayer shall notify the tax authority of the account numbers and the credit institutions and State Treasuries where their accounts are opened.
2. The person entitled to issue the decision to withdraw money from the subject’s accounts at credit institutions and State Treasuries are entitled to request credit institutions and State Treasuries in writing to provide information about the subject’s account numbers and balance.
The person entitled to issue the decision on enforcement is responsible for the confidentiality of the information about the subject’s accounts, which is provided by credit institutions and State Treasuries.
Article 27. Decision on enforcement by withdrawing money from accounts
1. The decision on enforcement by withdrawing money from accounts must specify its issuance date, its basis, full name and workplace of the decision issuer, the amount of money being withdrawn (written on the decision on administrative penalties and the cost of enforcement until the end of the 5-day time limit before the enforcement); the reasons for withdrawal; full name, tax codes, account numbers of the subject, names and addresses of the credit institutions where the accounts are opened; state account numbers; names, addresses of State Treasuries where state accounts are opened, method of transfer; deadline for implementation; signature and seal of the issuer of the decision on enforcement.
2. If the subject’s accounts must be blocked, the decision on enforcement must specify whether part or the whole account is blocked, which is equal to the amount of money being withdrawn from the account to enforce the administrative decisions.
3. The decision on enforcement by withdrawing money from accounts shall be sent to the organization or individual whose money is withdrawn, the State Treasuries and credit institutions where the accounts are opened, and relevant agencies at least 05 days before the enforcement.
Article 28. Responsibilities of State Treasuries and credit institutions where the subject’saccounts are opened
1. Provide necessary information about the numbers and balance of the subject’s accounts opened at their unit within 03 working days from the receipt of the request from the issuer of the decision on enforcement.
2. Transfer money to the state account at a State Treasury written in the decision on enforcement within 05 days from the day on which the decision on enforcement is received, and notify the transfer to the agency that issued the decision on enforcement and the subject.
3. If the account balance is lower than the amount payable, it is still transferred to the state account written in the decision on enforcement. The subject shall be notified of the transfer. The transfer shall be made without the consent of the subject.
4. Part or the whole account of the subject shall be blocked upon the receipt of the decision on enforcement (if the blockade is required by the decision on enforcement).
5. Notify the agency that issued the decision on enforcement of the expiration of the decision on enforcement while the subject’s account balance is not sufficient.
6. If the money in the subject’s account is not transfer to government budget under the decision on enforcement, penalties for administrative violations pertaining to taxation shall be imposed as prescribed in Article 12 of this Decree.
Article 29. Procedure for collecting money by withdrawing money from accounts
Money in the subject’s accounts shall be withdrawn based on the receipts. Receipts shall be used for transferring money withdrawn from the accounts to relevant parties.
The Ministry of Finance shall specify the time and procedure for taking the enforcement measure prescribed in this Section.
SECTION 3. ENFORCEMENT BY DEDUCTING PART OF SALARIES OR INCOMES
Article 30. Entities that have part of their salaries or incomes deducted.
The enforcement by deducting part of salaries or incomes is applied to the subjects that earn salaries or incomes at an organization as prescribed by law.
Article 31. Decision on deducting part of an individual’s salary or income
1. The decision on deducting part of an individual’s salary or income must specify its issuance date, name and address of the organization that manage the individual’s salary or income; the amount of deducted income (written on the decision on penalties for administrative violations and enforcement cost until the end of the 5-day time limit before the enforcement), the reasons for deduction, name and address of the State Treasury to which money is transferred, the method of transfer, time of transfer; signature and seal of the decision issuer.
2. The decision on enforcement shall be sent to the individual or the organization that manages his salary or income, and relevant organizations at least 05 days before the enforcement.
Article 32. Level of deduction of part of an individual’s salary or income
1. Only part of the salary, wage, or income equal to the amount of money written in the administrative decision on taxation made shall be deducted.
2. The deduction is not lower than 10% and not over 30% of total salary and monthly allowance of the individual. Deduction from other incomes shall depend on the actual incomes, but not to exceed 50% of the total income.
Article 33. Obligations of the employer that manages the individual’s salary, wage or income
The organization that manages the individual’s salary, wage or income (hereinafter referred to as income manager) is obliged to:
1. Transfer part of the salary or income of the subject to government budget in accordance with the decision on enforcement from the latest salary or income payment until tax, interest on late payment of tax, fines, and interest on late payment of fines are sufficiently paid according to the decision on enforcement, notify the transfer to the issuer of the decision on enforcement and the subject;
2. Transfer part of the subject’s salary or income of the individual to government budget in accordance with the decision on enforcement, and notify the issuer of the decision on enforcement;
3. If the subject’s labor contract is terminated while tax, interest on late payment of tax, fines, and interest on late payment of fines are not sufficiently deducted from the salary, the employer shall notify the issuer of the decision on enforcement within 05 working days from the termination date of the labor contract;
4. The income managers that deliberately avoid implementing decision on enforcement shall incur administrative penalties as prescribed in Article 13 of this Decree.
SECTION 4. ENFORCEMENT BY INVALIDATING INVOICES
Article 34. Entities that have their invoices invalidated
Invoices shall be invalidated when all conditions below are satisfied:
1. The tax authority fails to take the enforcement measures mentioned in Clause 1 and Clause 2 Article 19 of this Decree, or tax, interest on late payment of tax, fines, and interest on late payment of fines are not sufficiently collected by the deadline imposed by the Ministry of Finance, or in the case mentioned in Clause 7 Article 19 of this Decree, or at the request of the customs according to the Decrees on penalties for administrative violations and enforcement of current provisions on customs.
2. The invoices are purchased from Departments of Taxation, or printed, ordered by the organization or individual; the electronic invoices of which the issuance has been announced.
Article 35. Decision on invoice invalidation
1. A decision on invoice invalidation must specify: the date of the decision, basis for the decision, full name, position and workplace of the decision issuer; full name, residence address and office address of the subject, reasons for invoice invalidation, enforcement duration, the agency organizing the implementation of the decision on enforcement, cooperating agencies, signature of the decision issuer, seal of the agency that issues the decision.
2. The notice of invoice invalidation must specify: the date of the notice, the basis for the notice, full name, position, and workplace of the notice issuer, full name, residence address and office address of the subject, tax code (if any); reasons for invoice invalidation, numbers of invalidated invoices.
Article 36. Procedure for invoice invalidation
1. The head of the tax authority shall notify the subject at least 03 working days before issuing the notice of invoice invalidation.
2. When taking this enforcement measure, the tax authority must issue a decision on enforcement and announce the numbers of invalidation invoices on the media.
3. The tax authority shall announce the termination of this enforcement measure when the subject sufficiently pays the outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines to government budget (unless the time limit for implementing the decision on enforcement is over according to Clause 1 Article 24 of this Decree).
4. Where the customs authority requests the tax authority issues a decision on enforcement by invoice invalidation, the tax authority shall follow the procedure mentioned in Clauses 1, 2, and 3 of this Article and send it to the customs authority. The customs authority shall immediately notify the tax authority when sufficient outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines are collected for the tax authority to announce the termination of this enforcement measure.
The Ministry of Finance shall specify the procedure for taking this enforcement measure.
SECTION 5. ENFORCEMENT BY DISTRAINING ASSETS AND SELLING DISTRAINED ASSETS AT AUCTION
Article 37. Entities having their assets distrained for sale at auction
Organizations and individuals that have their assets distrained for sale at auction when they fail to voluntarily implement the administrative decisions on taxation or fail to pay for the enforcement costs, including:
1. Freelance workers without salary or income managers.
2. The organizations and individuals without accounts at credit institutions or of which account balance is not sufficient to deduct.
3. The organizations and individuals that are not subject to the enforcement measures mentioned in Clauses 1, 2, and 3, Article 19 of this Decree, or fines, interest on late payment of tax, fines and interest on late payment of fines are not sufficiently collected after taking such measures, or in the cases in Clause 7 Article 19 of this Decree.
4. Assets shall not be distrained if the taxpayer is an individual undergoing medical treatment at a legitimate medical facility.
Article 38. The assets below shall not be distrained
1. For individuals:
a) The only house of the subject and his family.
b) Drugs, food serving essential needs of the subject and his family.
c) Necessary working instruments as the primary or only means of subsistence of the subject and his family.
d) Clothes and primary appliances of the subject and his family.
dd) Objects of worship; relics, medals, certificates of merit.
2. For businesses:
a) Drugs, equipment, instruments and assets that belong to medical facilities, unless they are for sale; food, instruments and assets serving mid-shift meals of workers.
b) Kindergartens, schools and the equipment, instruments that belong to such facilities, provided they are not for sale.
c) Equipment, instruments and tools for assurance of occupational safety, fire safety, and prevention of environmental pollution.
d) Infrastructure serving public interests, national defense and security.
dd) Materials, finished products, semi-finished products being harmful chemicals banned from sale.
e) Materials and semi-finished products in a closed production line.
3. For state agencies, political organizations, socio-political organizations, socio-professional organizations (hereinafter referred to as agencies and organizations) that are funded by government budget , the assets bought with government budget shall not be distrained. The agency or organization shall request competent authorities in writing to provide financial supports to implement the decision on enforcement.
If the agency or organization earns incomes from other legitimate operations, the assets bought with such incomes shall be distrained, except for:
a) Drugs, equipment, instruments and assets that belong to medical facilities, unless they are for sale; food, instruments and assets serving mid-shift meals of officials.
b) Kindergartens, schools and the equipment, instruments that belong to such facilities, provided they are not for sale.
c) Equipment, instruments and tools for assurance of occupational safety, fire safety, and prevention of environmental pollution.
d) Office premises.
Article 39. Decision on enforcement by asset distraint
1. The decision on asset distraint must specify its issuance date, basis for decision, full name, position and workplace of the decision issuer; full name, residence address, office address of the asset owner; the amount of fines, location of distraint, signature of the decision issuer, seal of the agency that issues the decision.
2. The asset distraint must be notified to the asset owner, the People’s Committees of the commune where the individual resides or the organization is situated at least 05 days before the enforcement, unless the notification would obstruct the distraint.
Article 40. Procedure for asset distraint
1. Assets shall be distraint in daylight and during working hours of the locality.
2. The person that issues the decision on enforcement or the person assigned to implement the decision on enforcement shall organize the distraint.
3. The subject or an adult in his family, the representative of the organization that has its assets distrained, the representative of the local government, and witnesses must be present during the distraint.
The individual or adult in his family is deliberately absent, the asset distraint shall be carried out at the presence of the representative of the local governments and the witnesses.
4. The subject is entitled to decide which assets to be distrained first. The person that organizes the distraint must accept such request if it does not affect the distraint.
If the subject does not decide which assets to be distrained first, the assets under private ownership shall be distrained first.
5. The assets under a co-ownership of the subject and other people shall only be distrained if the subject has no private assets or his private assets are not sufficient to implement the decision on enforcement. If assets are under dispute, they shall still be distrained. The co-owners of such assets shall be provided with information about their rights to file lawsuits.
The agency that carries out the distraint shall notify the co-owners of the time and location of distraint. If no lawsuit is filed after 03 months from the date of distraint, the distrained assets shall be sole at auction as prescribed by legislation on asset auction.
6. If the subject fails to sufficiently pay outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines within 30 days from the date of distraint, the tax authority is entitled to sell the distrained assets at auction to collect such amounts.
Article 41. Record on asset distraint
1. The asset distraint must be recorded in writing. The record on asset distraint must specify the time and location of asset distraint, the full name and position of the distraint organizer; the representative of the organization that has its assets distrained, the individual that has his asset distrained or his representative; the witnesses; the representative of the local governments (or the workplace of the individual); names, condition, and characteristics of all distrained assets.
2. The distraint organizer, the representative of the organization that has its assets distrained, the individual that has his asset distrained or his representative; the witnesses, the representative of the local governments (or the workplace of the individual) shall sign on the record. If one of them is absent or refuses to sign on the record, the absence or refusal and its reasons must be written in the record.
3. The record on distraint shall be made into 02 copies. 01 copy is kept by the agency that issues the decision on enforcement, 01 copy is sent to the individual or organization that has their assets distrained right after the record is made.
Article 42. Transfer of distrained assets
1. The distraint organizer shall select one of the following methods to preserve the distrained assets:
a) Request the subject or his family, the asset manager or user to preserve them.
b) Request one of the co-owner to preserve the assets if they are under a co-ownership
c) Request a capable organization or individual to preserve assets.
2. Assets being jewels gold, silver, precious metals, jewels, foreign currencies, shall be managed by State Treasuries; Assets being industrial explosives, gadgets, historical or cultural items, national treasures, relics, valuable forestry products shall be managed by specialized agencies.
3. When transferring distrained assets, the distraint organizer shall make a record specifying: the date of transfer, full name of the organizer, representative of the subject, the person requested to preserve assets; the witnesses; quantity and condition (quality) of assets; rights and obligations of the person assigned to preserve assets.
The distraint organizer, the person assigned to preserve assets, the representative of the subject, and the witnesses shall sign on the record. If one of them is absent or refuses to sign on the record, the absence or refusal and its reasons must be written in the record.
Each copy of the record shall be kept by the distraint organizer, the person assigned to preserve assets, the representative of the subject, and the witnesses.
4. The person assigned to preserve assets shall have the preservation cost covered, except for the persons mentioned in Point a Clause 1 of this Article.
5. if assets are damaged, swapped, lost, or destroyed, the person assigned to preserve assets shall provide compensation and incur penalties as prescribed in this Decree or face a criminal prosecution as prescribed by criminal law.
Article 43. Valuation of distrained assets
1. The distrained assets shall be valuated at the office of the organization or house of the individual that has their assets distrained, or where distrained assets are kept (unless a Valuation council must be established).
2. Distrained assets shall be valuated under an agreement between the organizer and the representative of the subject (and the co-owner if distrained assets are under a co-ownership). The time limit for reaching an agreement on prices is 05 working days from the date of distraint.
If an agreement on the price of the distrained asset that is valued under 1,000,000 VND or quickly degenerates cannot be reached, the issuer of the decision on enforcement shall impose the price.
3. If the distrained asset valued at 1,000,000 VND or more is hard to be valuated or the parties fail to reach an agreement on the price, the issuer of the decision on enforcement shall request the competent authority to establish a Valuation council within 15 days from the date of distraint. The issuer of the decision on enforcement is the president of the council, the representatives of relevant finance agencies and specialized agencies are members.
Within 07 working days from the date of establishment, the Valuation council shall carry out the valuation. The representative of the organization or individual may offer opinions about the valuation, but the final decision shall be made by the Valuation council.
Assets shall be valuated based on current market prices at that time. The assets of which prices are under the management of the state shall be valuated based on the prices imposed by the state.
4. The asset valuation must be recorded in writing, specifying the time and location of valuation, participants in the valuation, names and values of the valuated assets, signatures of the participants and asset owners.
Article 44. The power to establish the Valuation council
1. The President of the People’s Committees of the district shall decide the establishment of valuation councils if the administrative enforcement is within the competence of the government of the district or commune.
2. The President of the People’s Committees of the province shall decide the establishment of valuation councils if the administrative enforcement is within the competence of the provincial government.
3. The establishment of the Valuation council at central agencies shall be decided by relevant Ministers, after reaching an agreement with the Minister of Finance and relevant Ministries.
Article 45. Tasks of the Valuation council
1. Study and suggest the organization and contents of the valuation council’s meeting.
2. Prepare necessary documents for the valuation.
3. Carry out the valuation.
4. Make the valuation record.
Article 46. Transferring assets distrained for sale at auction
1. Within 03 days from the day on which the decision on distraint is issued, the organizer shall sign an auction contract with a professional auction organizer to sell assets at auction.
2. The transfer of distrained assets to the auction organizer must be recorded in writing. The record must specify: the date of transfer, the transferor, the transferee and their signatures; the quantity and condition of assets. The asset transfer dossier consists of: the decision on asset distraint, documents related to the legitimate ownership and rights to use (if any); the valuation record and transfer record.
3. If the distrained assets are so bulky that the auction organizer cannot keep, a preservation contract may be signed with the place where the assets are kept after the transfer is completed. The preservation cost shall be defrayed by the money collected from the auction.
4. After the distrained assets are transferred to the auction organizer, the procedure for auction shall comply with legislation on property auction.
5. If the assets are under a co-ownership, the co-owners shall be favored at the auction.
6. If the money collected from the auction is more than the sum of amount written in the decision on penalties and the enforcement cost, the difference shall be returned to the subject within 10 days from the date of auction.
Article 47. Transferring the asset ownership
1. The buyer of distrained assets has the ownership of such assets recognized and protected by law.
2. A competent state authority shall carry out the procedure for transferring the ownership to the buyer as prescribed by law.
3. An ownership transfer dossier consists of:
a) A copy of the decision on distraining assets for sale at auction.
b) The auction record.
c) Other papers related to the assets (if any).
SECTION 6. ENFORCEMENT BY COLLECTING THE SUBJECT’S MONEY OR ASSETS THAT ARE HELD BY ANOTHER ORGANIZATION OR INDIVIDUAL
Article 48. The scope of collecting the subject’s money or assets that are held by a third party
The subject’s money or assets that are held by a third party shall be collected when all the conditions below are satisfied:
1. The tax authority fails to take the enforcement measures mentioned in Clauses 1, 2, 3, and 4 Article 19 of this Decree, or such measures have been taken but the outstanding tax, interest on late payment of tax, fines and interest on late payment of fines are not sufficiently collected, or in the cases mentioned in Clause 7 Article 19 of this Decree.
2. The tax authority has evidence that a third party owes a debt to the subject or is holding the subject’s assets or money.
Article 49. Rules for collecting the subject’s money or assets that are held by the third party
1. The third party owes a due debt to the subject, or is holding the subject’s assets or money.
2. If the subject’s money or assets is held by a third party being a subject of secured transactions or bankruptcy, the money and assets shall be collected from the third party in accordance with legislation on bankruptcy and secured transactions.
3. The amount of money paid to government budget by the third party on behalf of the subject is considered a payment on behalf of the subject.
The competent authority shall notify the subject and relevant agencies of such payment
Article 50. Procedure for collecting the subject’s money/assets held by the third party
1. The tax authority shall request the third party, which is holding the subject’s money/assets, in writing to provide information about such money/assets or the debt owed to the subject. The third party shall submit a written explanation to the tax authority within 05 working days from the day on which the request of the tax authority is received if it fails to comply with the request.
2. Based on the information provided by the third party, the tax authority shall issue a decision to collect the subject’s money/asset that are held by the third party, or claim the debt owed to the subject.
The decision on enforcement must be immediately sent to the subject and the third party. The tax authority shall request the third party in writing to implement the decision on enforcement. The third party shall pay the outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines on behalf of the subject, or transfer the subject’s assets to the tax authority for distraint. The asset distraint shall comply with Section 5 of this Chapter.
The tax authority shall implement the decision on enforcement in accordance with Article 24 of this Decree.
Article 51. Obligations of the third party
1. Provide the tax authority with information about the debt owed to the subject or the subject’s money/assets they are holding, specifying the amount of money, the deadline for repaying debt, categories, quantity and condition of assets.
2. Do not transfer money/asset to the subject when receiving the written request of the tax authority until money is paid to government budget or assets are transferred to the tax authority for sale at auction.
3. The third party shall submit a written explanation to the tax authority within 05 working days from the day on which the request of the tax authority is received if it fails to comply with the request.
4. The third party that fails to pay tax on the subject’s behalf within 15 days from the receipt of the request from the tax authority shall face the enforcement measures mentioned in Clause 1 Article 93 of the Law on Tax administration.
SECTION 7. ENFORCEMENT BY REVOKING THE CERTIFICATE OF BUSINESS REGISTRATION, CERTIFICATE OF ENTERPRISE REGISTRATION, LICENSE FOR ESTABLISHMENT AND OPERATION, OR PRACTICE CERTIFICATE
Article 52. The entities having their Certificates of Business registration, Certificates of Business registration, licenses for establishment and operation or practices certificates revoked
1. This enforcement measure shall be taken if the outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines are not sufficiently collected after the tax authority takes the enforcement measures in Clauses 1, 2, 3, 4, 5 Article 19 of this Decree, or in the case mentioned in Clause 7 Article 19 of this Decree.
2. When taking this enforcement measure, the competent state management authorities must make an announcement on the media.
Article 53. Procedure for revoking the Certificate of Business registration, Certificate of Enterprise registration, license for establishment and operation, or practice certificate
When this enforcement measure is taken, the agency that issued the Certificate of Business registration, Certificate of Enterprise registration, license for establishment and operation, or practice certificate shall be requested in wiring by the tax authority to revoke the Certificate of Business registration, Certificate of Enterprise registration, license for establishment and operation, or practice certificate within 03 days from the day on which this measure is taken.
Within 10 days from the receipt of the request sent by the, the certificate issuer shall issue a decision to revoke the Certificate of Business registration, Certificate of Enterprise registration, license for establishment and operation, or practice certificate, or notify the tax authority if they are not revoked.
Chapter 3.

IMPLEMENTATION

Article 54. Effect
1. This Decree takes effect on December 15, 2013.
2. The Government’s Decree No. 98/2007/ND-CP dated June 7, 2007 and the Government’s Decree No. 13/2009/ND-CP dated February 13, 2009 on penalties for violations pertaining to taxation and enforcement of administrative decisions on taxation are annulled.
3. The regulations on penalties, delay, exemption, reduction of fines, and other regulations on penalties for administrative violations pertaining to taxation that are favorable for the violations pertaining to taxation that are committed before this Decree takes effect and discovered afterwards shall be applied.
If the penalized entity files a complaint against a decision on penalties for administrative violations pertaining to taxation that is issued and implemented before this Decree takes effect, the case shall be resolved in accordance with law when the violation is committed.
Article 55. Guidance on implementation
The Ministry of Finance shall provide guidance, organize the implementation of this Decree, and cooperate with other state agencies, political organizations, socio-political organizations, social organizations, socio-professional organizations in disseminating and supervising the implementation of this Decree.
Article 56. Responsibility for the implementation
Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Presidents of the People’s Committees of central-affiliated cities and provinces, relevant organizations and individuals are responsible for the implementation of this Decree./.
 

The post Decree No.129/2013/NĐ-CP of October 16, 2013, on penalties for administrative violations pertaining to taxation and enforcement of administrative decisions on taxation appeared first on MP Law Firm.

MINISTRY OF FINANCE
——-

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
—————

No. 111/2013/TT-BTC

Hanoi, August 15, 2013

CIRCULAR

ON THE IMPLEMENTATION OF THE LAW ON PERSONAL INCOME TAX, THE LAW ON THE AMENDMENTS TO THE LAW ON PERSONAL INCOME TAX, AND THE GOVERNMENT’S DECREE NO. 65/2013/NĐ-CP ELABORATING A NUMBER OF ARTICLES OF THE LAW ON PERSONAL INCOME TAX AND THE LAW ON THE AMENDMENTS TO THE LAW ON PERSONAL INCOME TAX

Pursuant to the Law on Personal income tax No. 04/2007/QH12 dated November 21, 2007;
Pursuant to the Law on the amendments to the Law on Personal income tax No. 26/2012/QH13 dated November 22, 2012;
Pursuant to the Law on Tax administration No. 78/2006/QH11 dated November 29, 2006;
Pursuant to the Law on the amendments to the Law on Tax administration No. 21/2012/QH13 dated November 20, 2012;
Pursuant to the Government’s Decree No. 65/2013/NĐ-CP dated June 27, 2013 elaborating a number of articles of the Law on Personal income tax and the Law on the amendments to the Law on Personal income tax;
Pursuant to the Government’s Decree No. 83/2013/NĐ-CP dated June 22, 2013 elaborating a number of articles of the Law on Tax administration and the Law on the amendments to the Law on Tax administration;
Pursuant to the Government’s Decree No. 118/2008/NĐ-CP dated November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
At the request of the Director of the General Department of Taxation;
The Minister of Finance provides guidance on the implementation of the Law on Personal income tax, the Law on the amendments to the Law on Personal income tax, and the Government’s Decree No. 65/2013/NĐ-CP elaborating a number of articles of the Law on Personal income tax and the Law on the amendments to the Law on Personal income tax:
Chapter 1.

GENERAL PROVISIONS

Article 1. Taxpayers
Taxpayers are residents and non-residents according to Article 2 of the Government’s Decree No.65/2013/NĐ-CP elaborating a number of articles of the Law on Personal income tax and the Law on the amendments to the Law on Personal income tax (hereinafter referred to as the Decree No.65/2013/NĐ-CP) and earn taxable incomes according to Article 3 of the Law on Personal income tax and Article 3 of the Decree No. 65/2013/NĐ-CP
Determination of taxable incomes earned by taxpayers:
Taxable incomes earned by residents are the incomes earned within or outside Vietnam’s territory, regardless of locations or payment and receipt.
Taxable incomes earned by non-residents are the incomes earned within Vietnam’s territory, regardless of the location of payment and receipt.
1. A resident is a person that meets one of the conditions below:
a) The person has been present in Vietnam for 183 days or longer in a calendar year, or for 12 consecutive months from the day on which that person arrives at Vietnam (the date of arrival and date of departure are considered 01 day). The date of arrival and date of departure depends on the certification of the immigration agency on the passport (or laissez-passers) when that person enters and leaves Vietnam. If the person enters and leaves Vietnam within one day, it is considered a day of residence.
A person in Vietnam defined in this Point is the presence of that person in Vietnam’s territory.
b) The person has a regular residence in Vietnam in one of two cases below:
b.1) The person has a regular residence according to legislation on residence:
b.1.1) For Vietnamese citizen: the regular residence is the place where that person regularly, stably, and indefinitely lives and has been registered as permanent residence as prescribed by legislation on residence.
b.1.2) For foreigners: the regular residence is the permanent written in the permanent residence card, or the temporary residence when applying for the temporary residence card issued by competent authorities affiliated to the Ministry of Public Security.
b.2) The person rents a house in Vietnam according to legislation on housing under a contract that lasts 183 days or longer in the tax year, in particular:
b.2.1) The person has no regular residence as guided in Point b.1 Clause 1 of this Article, but has rented the house for totally 183 days in the tax year is also considered a resident, even that person rents houses in various areas.
b.2.2) The rented houses include hotels, guesthouses, motels, offices, etc. whether they are rented by the person or their employer.
If the person has no regular residence in Vietnam according to this Clause but actually is present in Vietnam for fewer than 183 days in the tax year, and fails to prove his or her residence in any country, that person shall be considered a resident of Vietnam.
The residency in another country shall be proved by the Certificate of residence. If the person belongs to a country or territory that signs tax agreements with Vietnam and does not issue the Certificate of residence, that person shall present a photocopy of the passport to prove the period of residence.
2. Non-residents are the persons that fail to meet the conditions in Clause 1 of this Article.
3. Taxpayers in some specific cases are identified as follows:
a) For the person that earns incomes from business:
a.1) If only one person is registered in the Certificate of Business, the taxpayer is person whose name is registered in the Certificate of Business registration.
a.2) If multiple people are registered in the Certificate of Business registration and participate in the business, the taxpayers are the persons whose names are registered in the Certificate of Business registration.
a.3) If multiple members of a household participate in the business but only one person is registered in the Certificate of Business registration, the taxpayer is the person whose name is registered in the Certificate of Business registration.
a.4) If the person or household does business without the Certificate of Business registration (or practice certificate), the taxpayer is the person doing business.
a.5) When leasing a house, the right to use land, water surface, and other property without business registration, the taxpayer is the person that owns the house, the right to use land, water surface and other property. If the house, the right to use land, water surface, and other property is under the ownership of multiple persons, the taxpayers are all the owners.
b) Other individuals that earn taxable incomes.
b.1) When transferring real estate under a co-ownership, taxpayers are the co-owners of such real estate.
b.2) If the person delegated to manage real estate has the right to transfer real estate or similar rights to those the real estate owner, the taxpayer is the delegating person.
b.3) If the person that transfers the ownership, the right to use protected entities according to the Law on Intellectual property and the Law on Technology transfers is the co-owner or co-author, the taxpayer is co-owner and co-author that earn incomes from such transfer.
b.4) If multiple persons participate in a franchise according to the Law on Commerce, the taxpayers are all persons that earn incomes from the franchise.
4. The taxpayers defined in Clause 1 and Clause 2 of this Article include:
a) The persons that hold Vietnamese nationality, including the persons sent to work or study overseas, and earn taxable incomes.
b) The persons that do not hold Vietnamese nationality but earn taxable income, including: foreigners working in Vietnam, foreigners that are not present in Vietnam but earn taxable incomes from Vietnam.
Article 2. Taxable incomes
According to Article 3 of the Law on Personal income tax and Article 3 of the Decree No.65/2013/NĐ-CP the incomes subjects to personal income tax (hereinafter referred to as taxable incomes) include:
1. Incomes from business
Incomes from business are incomes earned from the production and sale, in particular:
a) Incomes from production and sale of goods and services that belong to all industries such as: production, goods sale, construction, construction, restaurants, service provision including lease of houses, right to use land, water surface, and other property.
b) Incomes from freelance works of individuals in the fields that are licensed or certificated as prescribed by law.
c) Incomes from agriculture, forestry, salt production, and fishery that are not eligible for tax exemption according to Point e Clause 1 Article 3 of this Circular.
2. Incomes from wages and remunerations.
Incomes from wages and remunerations (hereinafter referred to as wages) are incomes paid to workers from employers, including:
a) Wages, remunerations, and the other amounts paid as wages or remunerations in cash or not in cash.
b) Allowances and benefits, except for:
b.1) Monthly benefits, lump-sum benefits and allowances according to legislation on incentives for contributors.
b.2) Monthly allowances and lump-sump allowances for the persons that participate in the resistance movements, national defense, fulfillment of international tasks, and discharged volunteers.
b.3) Benefits for national defense and security; subsidies for the armed forces.
b.4) Benefits for dangerous or harmful works.
b.5) Benefits for workers in disadvantaged areas.
b.6) Irregular allowances for difficulties, occupational accident benefits, occupational illness benefits, lump-sum allowances for childbirth or adoption, maternity leave benefits, post-maternity recovery benefits, benefits for reduction in work ability, lump-sum pension, monthly widow’s pension, severance pay, redundancy pay, unemployment benefits, and other benefits according to the Labor Code and the Law on Social insurance.
b.7) Benefits for beneficiaries of social security.
b.8) Benefits for senior officers.
b.9) Lump-sum benefits for the persons reassigned to the areas facing extreme economic and social difficulties, lump-sum supports for officers working for sovereignty over sea and islands as prescribed by law. Lump-sum moving allowances for foreigners that move and reside in Vietnam and Vietnamese people that go to work abroad.
b.10) Benefits for medical workers in villages.
b.11) Occupational benefits.
The allowances and benefits that are not included in taxable incomes as guided in Point b Clause 2 of this Article must be defined by competent authorities.
If the documents on the levels of allowances and benefits are applicable to the public sector, other economic sectors and businesses shall make calculate allowances and benefits based on such documents.
If the actual benefits and allowances received are in excess of the levels stated above, the excess shall be included in taxable incomes.
Lump-sum moving allowances for foreigners that reside in Vietnam and Vietnamese people working overseas shall be deducted in accordance with the labor contract or collective bargaining agreement.
c) Remunerations in the forms of agent commission, brokerage commission, payments for participation in science and technology researches, payments for participation in projects and schemes, royalties according to legislation on royalties, payments for teaching, payments for participation in artistic performance, sports, payments for advertising, payments for other services, and other remunerations.
d) Payments for participation in business associations, Boards of Directors, Control Boards, project management boards, management councils, professional associations, and other organizations.
dd) Other benefits in cash or not in cash apart from wages paid to the taxpayer by the employer in any shape or form:
dd.1) Payments for housing, electricity, water supply and ancillary services (if any).
If the person stays at the workplace, the taxable income depends on the house rent or depreciation expense, payments for electricity, water supply, and other services according to the ratio of area that person uses to the total area of the workplace.
The house rent paid by the employer shall be included in the taxable income according to the actual number of households, but shall not exceed 15% of the total taxable income (excluding house rent) earned at the workplace.
dd.2) The life insurance premiums, other optional insurance premiums, contributions to the voluntary pension fund paid or made by the employer on the worker’s behalf.
dd.3) Membership fees and other expenditure on services serving individuals such as: healthcare, entertainments, sports, recreation, in particular:
dd.3.1) Membership fees (such as membership card of golf course, tennis course, cultural, artistic, sports clubs, etc.) – if the card specifies the user or group of users. If the card is shared without specific users, the fees are not included in taxable incomes.
dd.3.2) Expenditures on other services individuals such as: healthcare, entertainments, sports, recreation, etc. – if the names of the recipients are specified. If the recipient is the collective of workers, not any specific person, it is not included in taxable income.
dd.4) Flat expenditures on stationery, business trips, phone calls, costumes, etc. that are in excess of the limits prescribed by the State. Flat expenditures are not included in taxable income in the cases below:
dd.4.1) For the officials and workers in public service agencies, communist party’s agencies, associations: the flat expenditure shall apply guiding documents promulgated by the Ministry of Finance.
dd.4.2) For the workers working in businesses and representative offices: the flat expenditure shall conform to the income that incurs corporate income tax and guiding documents of the Law on Enterprise income tax.
dd.4.3. For the workers in international organizations and representative offices of foreign organizations: the flat expenditure shall comply with regulations of such international organizations and representative offices of foreign organizations.
dd.5) The expenditure on shuttling workers is not included in taxable incomes earned by workers; if the person is shuttled personally, it shall be included in the taxable incomes earned by the shuttled person.
dd.6) The payments for refresher courses for workers, which suit their professions or accords with plans of the employer, shall not be included in the incomes earned by workers.
dd.7) Other benefits.
Other paid to workers by the employers such as: payments during leave period or public holidays; payment for counseling, tax declaration services for a particular person or group of people; payment for domestic servants such as driver, cook, and other domestic servants that work under contracts, etc.
e) Rewards in cash or not in cash in any shape or form, including rewards in the form of securities, except for:
e.1) Prize money associated with the titles awarded by the State, including the prize money associated with honorary titles as prescribed by law:
e.1.1) Prize money associated with honorary titles awarded by Ministries, central and provincial agencies and associations, excellent employee titles.
e.1.2) Prize money associated with the awards.
e.1.3) Prize money associated with the titles awarded by the State.
e.1.4) Prize money associated with the awards presented by associations and organizations belonging to central and local political organizations, socio-political organizations, social organizations, social organizations that conforms with there charters and the Law on Emulation and commendation.
e.1.5) Prize money associated with the Ho Chi Minh Prize and National Prize.
e.1.6) Prize money associated with medals or badges.
e.1.7) Prize money associated with certificates of merit
The powers to decide the commendation and prize money associated with the titles and awards above must be conformable with the Law on Emulation and commendation.
e.2) Prize money associated with national prizes and international prizes recognized by Vietnam.
e.3) Rewards for technical innovations and inventions recognized by competent authorities.
e.4) Rewards for reporting violations of law to competent authorities.
g) The incomes below are not included in taxable incomes:
g.1) Supports provided by the employer for medical examination and treatment of fatal diseases suffered by workers and their families.
g.1.1) Family of the worker in this case include: children, legitimate adopted children, illegitimate children, stepchildren, spouse, parents, parents-in-law; stepparents, legitimate adoptive parents.
g.1.2) The support that is not included in taxable income is the actual paid amount according to hospital bills, but must not exceed the hospital fee paid by the worker and his or her family after deducted the amount paid by the insurer.
g.1.3) The employer that provide supports shall keep the copies of the hospital bills that are certified by the employer (if the worker and his or her family pay for the remaining amount after the insurer directly pay the medical facility), the copies of the health insurance payment certified by the employer (if the worker and his or her family pays the entire hospital fee and then receive insurance money from the insurer) together with the papers proving the provision of supports for workers and their families who suffer from fatal diseases.
g.2) The amount received according to regulations on using vehicles of state agencies, public service agencies, communist party’s organizations, and associations.
g.3) The amount received according to the regulations on public housing.
g.4) Other payments received, apart from wages, for participation in consultation, appraisal, and inspection of legislative documents, Resolutions, political reports, inspectorates, serving votes, citizens; for costumes and other tasks directly serving the operation of the Office of the National Assembly, the Ethnic Communities Council, committees of the National Assembly, the delegations of the National Assembly, the Central Office, the departments of the Communist Party, City/Province Committees and their departments.
g.5) Payment for mid-shift meals, lunch of workers provided by employers that provide mid-shift meals, lunch for their workers in the form of cooking, buying catering services, giving luncheon vouchers.
If the employer pays cash for their workers’ meals instead of providing mid-shift meals or lunch, such money is not included in the taxable income if it is conformable with the guidance of the Ministry of Labor, War Invalids and Social Affairs. If the payment is higher than the limit imposed by the Ministry of Labor, War Invalids and Social Affairs, the excess shall be included in taxable incomes.
The expenditures of state-owned enterprises, public service agencies, communist party’s agencies, associations shall not exceed the limits imposed by the Ministry of Labor, War Invalids and Social Affairs. For non-public enterprises and organizations, the expenditures shall be decided by the head and the union president, and shall not exceed the limits imposed on state-owned enterprises.
g.6) The payment for round-trip air tickets made by the employer for foreign workers in Vietnam or Vietnamese workers overseas to go home once a year.
The basis for determining the payment for air tickets is the labor contracts and the prices of air tickets from Vietnam to the other country and vice versa.
g.7) The tuition fees for children of foreign workers in Vietnam to study in Vietnam, for children of Vietnamese workers overseas to study overseas from preschool to high school, which is paid by the employer on their behalf.
g.8) The amounts received from sponsors are not included in the taxable income if the sponsorship beneficiary is a member of the sponsoring organization; the sponsorship is funded by government budget or managed in accordance with regulations of the State; from composting literary and artistic works, scientific research, accomplishment of political objectives of the State, or other activities that conforms with their charters.
g.9) The payments paid by the employer for dispatching, reassigning foreign workers in Vietnam in accordance with labor contracts and international work schedules of some industries such as petroleum, mineral extraction.
The basis of determination is the labor contract and the payments for air tickets from Vietnam to the home country of the foreign worker and vice versa.
Example 1: Mr. X is a foreigner dispatched by contractor Y to an oil rig on the continental shelf of Vietnam. According to the labor contract, the work cycle of Mr. X on this oil rig is 28 consecutive working days and 28 days off. The payments made by contractor Y for the air tickets for Mr. X to fly from his country to Vietnam and vice versa for every time of changing shift, the helicopter that take Mr. X from the mainland to the oil rig and vice verse, the residence expense while Mr. X is waiting for the helicopter shall net be included in the taxable income of Mr. X.
3. Incomes from capital investment
Incomes from capital investment are personal income in the form of:
a) Interest on the loans given to other organizations, enterprises, business households, business individuals and groups of business individuals according to loan contracts or agreements, except for the interests paid by credit institutions and branches of foreign banks according to Point g.1 Clause 1 Article 3 of this Circular.
b) The dividends earned from capital contribution to purchase of shares.
c) Profits from capital contributions to limited liability companies (including single-member limited liability companies), partnerships, cooperatives, joint-ventures, business cooperation contracts, and other forms of business according to the Law on Enterprises and the Law on Cooperatives; profits from capital contribution in the establishment of credit institutions according to the Law on credit institutions, capital contributions to securities investment fund and other investment funds that are established and operated within the law.
d) The added value of capital contribution received when the enterprise is dissolved, converted, divided, split, merged, amalgamation, or upon capital withdrawal.
dd) Incomes from interest on bonds, treasury bills, and other valuable papers issued by Vietnamese organizations, except for the incomes defined in Point g.1 and g.3 Clause 1 Article 3 of this Circular.
e) The incomes from capital investment in other forms, including capital contribution in kind, by reputation, rights to use land, patents.
g) Incomes from dividends paid in bonds, incomes from reinvested profit.
4. Incomes from capital transfer.
Incomes from capital transfer are personal income in the form of:
c) Profits from capital contributions to limited liability companies (including single-member limited liability companies), partnerships, cooperatives, business cooperation contracts, people’s credit funds, economic organizations, and other organizations.
b) Incomes from securities transfer, including: incomes from transferring shares, call options on shares, bonds, treasury bills, fund certificates, and other securities according to the Law on Securities; incomes from transferring shares of the persons in the joint-stock company according to the Law on Enterprises.
c) Incomes from other forms of capital transfer.
5. Incomes from real estate transfer
Incomes from real estate transfer:
a) Incomes from transferring rights to use land.
b) Incomes from transferring rights to use land and property on the land. Property on the land includes:
b.1) Houses, including future houses.
b.2) Infrastructure and constructions on the land, including future constructions.
b.3) Other property on land includes agriculture, forestry and fishery products (such as plants and animals).
c) Incomes from transferring ownership of houses, including future houses.
d) Incomes from transferring rights to use land, rights to rent water surface.
dd) Incomes from capital investment by real estate to establish enterprises or increase capital of enterprises as prescribed by law.
e) Incomes from delegating the management of real estate, if the person delegated to manage real estate has the right to transfer real estate or similar rights to the real estate owner.
g) Other incomes from real estate transfer in any shape or form.
The regulations on future houses and constructions in Clause 5 of this Article shall comply with legislation on real estate trading.
6. Incomes from winning prizes
Incomes from wining prizes are amounts of money or items received by the person in the form of:
a) Winning lottery prizes.
b) Wining prizes from promotion programs when buying products or services according to the Law on Commerce.
c) Winning prizes from the types of betting permitted by law.
d) Winning prizes in the casino permitted by law.
dd) Winning prizes from the games with prizes and the like held by economic organizations, administrative agencies, associations, other organizations and individuals.
7. Incomes from copyright
Incomes from copyright are incomes from the transfer of ownership, rights to use the subjects of intellectual property rights according to the Law on Intellectual property, incomes from technology transfers according to the Law on Technology transfers. In particular:
a) The subjects of intellectual property rights are specified in Article 3 of the Law on Intellectual property and relevant guiding documents:
a.1) Subjects of copyright include literary, artistic, and scientific works; subjects of rights relevant to copyright include: video recordings, sound recordings of broadcasted programs, program-carrying satellite signals.
a.2) Subjects of industrial property rights include inventions, industrial designs, integrated circuit designs, business secrets, makes, trade marks, and geographical indications.
a.3) Subjects of rights to plant varieties being propagating materials and harvested materials.
b) Subjects of technology transfers according to Article 7 of the Law on Technology transfers:
b.1) Transfer of technical know-hows.
b.2) Transfer of technological knowledge in the form of technological plans, technological processes, technical solutions, formulae, specifications, drawings, technical diagrams, computer programs, information.
b.3) Transfer of solutions for rationalizing production and technological innovation.
Incomes from transfer of aforesaid subjects of intellectual property rights and technology transfers include re-transfer.
8. Incomes from franchising
Franchise is a commercial operation in which the franchiser allows and requests the franchisee to sell goods and services under the conditions set out by the franchiser in the franchise contract.
Incomes from franchising are the incomes the person earned from the aforesaid franchise contracts, including re-franchise according to legislation on franchise.
9. Incomes from inheritance
Incomes from inheritance are the incomes the person receives under a will or in accordance with legislation on inheritance, in particular:
a) Inherited securities: shares, call options on shares, bonds, treasury bills, fund certificates, and other securities according to the Law on Securities; shares of the person in the joint-stock company according to the Law on Enterprises.
b) Inherited capital in economic organizations and businesses: capital contribution to limited liability companies, cooperatives, partnerships, business cooperation contracts; capital in private enterprises and businesses of the person; capital in associations and funds established within the law, or the entire business if the private enterprise or business is under the ownership of the person.
c) Inherited real estate: rights to use land, rights to use land and property thereon; ownership of houses, including future houses, infrastructure and constructions on land, including future constructions; rights to rent land or water surface; other incomes from inheritance being real estate in any shape or form, except for incomes from the inherited real estate mentioned in Point d Clause 1 Article 3 of this Circular.
d) The ownership and use rights of other inherited assets (cars, motorbikes, ships, barges, speedboats, towboats, yachts, airplanes, hunting guns, sporting guns) must be registered with state agencies.
10. Incomes from receipt of gifts
Incomes from receipt of gifts are incomes the person receives from organizations and individuals at home and overseas, in particular:
a) Gifts being securities: shares, call options on shares, bonds, treasury bills, fund certificates, and other securities according to the Law on Securities; shares of the person in the joint-stock company according to the Law on Enterprises.
b) Gifts being capital in economic organizations and businesses: capital contribution to limited liability companies, cooperatives, partnerships, business cooperation contracts; capital in private enterprises and businesses of the person; capital in associations and funds established within the law, or the entire business if the private enterprise or business is under the ownership of the person.
c) Gift being real estate: rights to use land, rights to use land and property thereon; ownership of houses, including future houses, infrastructure and constructions on land, including future constructions; rights to rent land or water surface; other incomes from inheritance being real estate in any shape or form, except for incomes from the gifts being real estate mentioned in Point d Clause 1 Article 3 of this Circular.
d) The ownership and use rights of gifts being other assets (cars, motorbikes, ships, barges, speedboats, towboats, yachts, airplanes, hunting guns, sporting guns) must be registered with state agencies.
Article 3. Tax-free incomes
1. According to Article 4 of the Law on Personal income tax and Article 4 of the Decree No.65/2013/NĐ-CP tax-free incomes include:
a) Incomes from real estate transfer (including future houses and constructions according to legislation on real estate trading) between husband and wife, parents and children; adoptive parents and adopted children; parents-in-law and children-in-law; grandparents and grand children, and among siblings.
The real estate (including future houses and constructions according to legislation on real estate trading) that is established by either spouse during the marriage, considered marital property, divided under agreements or judgment of the court when they divorce shall be tax-free.
b) Incomes from transferring houses, rights to use land and property on land of the person if only one house or right to use of only one land plot in Vietnam is transfer.
b.1) The person that transfers the house and right to use land that is tax-free as prescribed in Point b Clause 1 of this Article must meet all conditions below:
b.1.1) Only one house or one land plot (whether with or without property thereon) is transferred, in particular:
b.1.1.1) The house ownership and right to use land shall be determined based on the certificate of rights to use land, ownership of house and other property on land.
b.1.1.2) If the house ownership or rights to use land are shared, the person that has no ownership of houses or rights to use land in other areas shall be eligible for tax exemption, the person that has ownership of houses or rights to use land in other areas is not eligible for tax exemption.
b.1.1.3) If the house or rights to use land is the marital property and only property of the husband and wife, the person that has no other private house or land is eligible for tax exemption, the person that has another private house or land is not eligible for tax exemption.
b.1.2) The house or rights to use land has been possessed for at least 183 days before they are transferred.
The time for determine the house ownership land use right is the date of the certificate of land use right, ownership of house and other property on land.
b.1.3) Transferring the entire house or residential land.
If the individual has or share the ownership of the only house or land use right and transfers part of it, the transferred part is not tax-free.
b.2) The only house and residential land that is tax-free shall be declared by the person that transfers real estate. If false declaration is discovered, the person has to pay tax arrears and incur penalties for violations against the laws on taxation.
b.3) Transfer of future houses and constructions that are not exempt from personal income tax according to Point b Clause 1 of this Article.
c) Incomes from the person’s rights to use land allocated by the State that is eligible for land levy exemption or reduction.
The person that transfers the area of land eligible for exemption or reduction of land levies shall declare and pay tax on the incomes from real estate transfer according to Article 12 of this Circular.
a) Incomes from inherited real estate (including future houses and constructions according to legislation on real estate trading) between husband and wife, parents and children; adoptive parents and adopted children; parents-in-law and children-in-law; grandparents and grand children, and among siblings.
dd) Incomes from conversion of agricultural land, which is allocated by the State, to rationalize agricultural production without changing land purposes of the household or person engaged in agricultural production.
e) Incomes of households and persons engaged in agriculture, forestry, salt production, and fishery.
Households and persons engaged in production as guided in this Point must:
e.1) Has legitimate rights to use, lease land and water surface to engage in agriculture, forestry, salt production, and fishery.
Has a lease contract must be presented if the land or water surface is leased from another organization or person (unless the household or person is assigned to plant, take care of, manage, and protect forests by forestry companies). The household or person that do fishing must have the Certificate of ownership of ships or contract to rent ships used for fishing (except for fishing by trawling nets and other methods of fishery prohibited by law).
e.2) Resides in the locality where the agriculture, forestry, salt production or fishery takes place.
The aforesaid locality is a district, town, or city affiliated to a province (hereinafter referred to as district), or a district adjacent to the area where the production takes place.
Incomes from fishing do not depend on residence.
e) Raw agriculture, forestry products, salt, and fishery products are the products that are just cleaned, dried, husked, cut, salted, frozen, and put into ordinary storage.
g) Incomes from interest on deposits at credit institutions and branches of foreign banks, interest on life insurance contracts; incomes from interest on Government bonds.
g.1) The tax-free interest on deposits mentioned in this Point is the income from the interest on deposits in VND, gold, or foreign currencies at credit institutions and branches of foreign banks established and operated in accordance with the Law on credit institutions in the form of demand deposits, term deposits, savings, certificates of deposit, promissory notes, treasury bills, and other forms of deposits that the depositor should receive both principal and interest.
The basis for identifying tax-free incomes from deposits is the savings book (or saving card) certificates of deposit, exchange bills, treasury bills, and other papers that the depositor should receive both principal and interest.
g.2) Interest on life insurance contracts is the interest the person receives under the life insurance contracts with insurers.
The basis for identifying tax-free income from interest on life insurance contracts is the notes of interest payment from the insurance contracts.
g.3) Interest on Government bonds is the interest the person receives from purchasing Government bonds issued by the Ministry of Finance.
The basis for identifying tax-free income from interest on Government bonds is the face values, interest rates, and terms on the Government bonds.
h) Income from remittances are is the amount of money the person receives from their relatives being Vietnamese people residing abroad, Vietnamese people that work or study abroad.
The basis for identifying tax-free income from remittances is the papers proving that those amounts are sent from abroad and the payment notes issued by the money-transferring organization (if any).
i) Incomes from the additional payments for working at night or working overtime in excess of wages according to the Labor Code. In particular:
i.1) The tax-free additional payments for working at night or working overtime is identified based on the actual total payment for working at night or overtime minus (-) the payment for an ordinary working day.
Example 2: The wages of Mr. A on an ordinary working day is 40,000 VND/hour.
– When working overtime on an working day, he is paid 60,000 VND/hour, thus the tax-free income is:
60,000 VND/hour – 40,000 VND/ hour = 20,000 VND/ hour
– When working overtime on an holiday, he is paid 80,000 VND/hour, thus the tax-free income is:
80,000 VND/hour – 40,000 VND/ hour = 40,000 VND/ hour
i.2) The organization or person that pays incomes (hereinafter referred to as income payer) shall make a table specifying the hours of night work, extra hours, additional payments for working at nights and overtime. This table shall be presented by the income payer at the request of the tax authority.
k) Pensions paid by Social Insurance Fund according to the Law on Social insurance; monthly pensions from the voluntary pension fund.
The pensions paid from abroad to the people living and working in Vietnam are tax-free.
m) Incomes from scholarships, including:
m.1) Scholarships funded by government budget, including scholarships given by the Ministry of Education and Training, Services of Education and Training, public schools, and other scholarships funded by government budget.
m.2) Scholarships given by Vietnamese and foreign organizations (including payment for living expenses).
The scholarship giver must keep the decisions on giving scholarships and notes of scholarship payments. Where the person directly receives scholarships from foreign organizations, the person must keep the documents proving the incomes from such scholarships.
n) Incomes from indemnities under the contract for life insurance, non-life insurance, or health insurance; compensation for occupational accidents; compensation and support according to legislation on compensation, support, and relocation; compensations provided by the State and other compensations prescribed by law. In particular:
n.1) Incomes from indemnities under the contract for life insurance, non-life insurance, or health insurance are the money the life insurer, non-life insurer, or health insurer provided for the insured according to the concluded insurance contracts. The basis for identifying such indemnity is the written decision on indemnity made by the insurer or the court and the notes of indemnity payment.
n.2) The income from the compensation for an occupational accident are the money the worker receives from his or her employer or the social insurance fund after suffering from an accident at work. The basis for identifying such compensation is the written decision on compensation made by the employer or the court and the notes of compensation payment.
n.3) Incomes from compensations and supports according to legislation on compensation, support, and relocation are the compensations and supports provided by the State when withdrawing land, including incomes from the compensations and supports provided by economic organizations as prescribed.
The basis for identifying incomes from aforesaid compensations and supports is the decisions on land withdrawal, compensations, and relocation made by competent authorities, and notes of compensation payment.
n.4) Incomes from compensations provided by the State and other compensations prescribed by legislation on compensations provided by the State are the compensations for the wrongful decisions on penalties for administrative violations made by competent persons or competent authorities which infringe the interests of the person; incomes from compensation for the miscarriage of justice during criminal proceedings. The basis for identifying such compensations is the decision made by competent authorities that the organization or individual that makes the wrongful decision to provide compensations and the notes of compensation payment.
p) Incomes from non-profit charitable trusts accredited by competent authorities, which aim for charity, humanitarianism, and study encouragement.
The aforesaid charitable trusts must be established and operated in accordance with the Government’s Decree No. 30/2012/NĐ-CP dated April 12, 2012 on the organization and operation of social trusts and charitable trusts.
The basis for identifying tax-free incomes from the charitable trust in this Point are the written decisions on giving money and notes of support in cash or in kind made by the charitable trusts.
q) Incomes from foreign aids for charitable and humanitarian purposes, whether governmental or non-governmental, that are approved by competent authorities.
The basis for identifying the tax-free income in this Point is written approval for receipt of aids made bye competent authorities.
2. The procedure and application for tax exemption in the cases in Points a, b, c, d, dd Clause 1 of this Article shall comply with guiding documents on tax administration.
Article 4. Tax reduction
According to Article 5 of the Law on Personal income tax and Article 5 of the Decree No.65/2013/NĐ-CP the taxpayers facing difficulties in paying tax due to natural disasters, accidents, or fatal diseases shall receive a tax reduction in proportion to the damage. The reduction shall not exceed the tax payable. In particular:
1. Determination of reduced tax:
a) Tax reduction shall be considered in the tax year. The taxpayer shall receive tax reduction for the tax year in which the taxpayer suffers from natural disaster, fire, accident, or fatal disease.
b) The tax payable used for calculating tax reduction is the total personal income tax payable in the tax year, including:
b.1) The paid or withheld personal income tax on incomes from capital investment, incomes from capital transfer, incomes from real estate transfer, incomes from winning prizes, incomes from royalties, incomes from franchising, incomes from inheritance, and incomes from gifts.
b.2) The personal income tax payable on incomes from business and incomes from wages, remunerations.
c) The basis for calculating the damage eligible for tax reduction is the total expenditure for repairing damage minus the indemnities provided by insurers (if any) or compensations provided by the organization or individual that caused the accident (if any).
d) The reduced tax is determined as follows:
d.1) If the tax payable in the tax year is higher than the damage level, the reduced tax is equal to the damage level.
d.2) If the tax payable in the tax year is lower than the damage level, the reduced tax is equal to the tax payable.
2. The procedure and application for tax reduction shall comply with guiding documents on tax administration.
Article 5. Converting taxable income into VND.
1. Taxable incomes are calculated in VND. The taxable incomes received in foreign currencies must be converted into VND at the average exchange rate on the inter-bank foreign exchange market when the incomes are earned.
The foreign currencies without rates of exchange into VND shall be converted into a foreign currency that has a rate of exchange into VND.
2. Non-cash taxable incomes must be converted into VND at the market prices of such products/services or the similar products/services when the incomes are earned.
Article 6. Tax period
1. For residents:
a) Annual tax declaration: applicable to incomes from business and incomes from wages, remunerations.
The tax period is the calendar year if the person is present in Vietnam for 183 days or more in the calendar year.
If the person has been present in Vietnam for fewer than 183 days in a calendar year, but has been in Vietnam for 183 days for 12 consecutive months from the date of arrival, the first tax period is the 12 consecutive months from the date of arrival. In the second year, the tax period is the calendar year.
Example 3: Mr. B is a foreigner who first comes to Vietnam on April 29, 2013. in 2014 up to December 31, Mr. B has stayed in Vietnam for 130 days. In 2015 up to April 19, Mr. B has stayed in Vietnam for 65 days. The first tax period of Mr. B begins on April 20/2014 and ends on April 19, 2015. The second tax period begins on January 01, 2015 and ends on December 31, 2015.
b) Declaring tax when an income is earned: applicable to incomes from capital investment, incomes from capital transfer, incomes from real estate transfer, incomes from winning prizes, incomes from royalties, incomes from franchising, incomes from inheritance, and incomes from gifts.
c) Tax on incomes from transferring securities shall be declared annually or when it is incurred.
2. For non-residents:
Non-residents shall declare tax whenever an income is earned.
Where the business person does not have a fixed business location such as a shop or counter, the tax period is similar to that applicable to residents earning incomes from business.
Chapter 2.

BASIS FOR CALCULATING TAX INCURERD BY RESIDENTS

Article 7. Basis for calculating tax on taxable incomes from business, wages
The basis for calculating tax on incomes from business, wages is the assessable income and tax rate, in particular:
1. Assessable income equals taxable income as guided in Article 8 of this Circular minus (-) the following deductions:
a) Personal deductions guided in Clause 1 Article 9 of this Circular.
b) Insurance premiums and payment to the voluntary pension fund as guided in Clause 2 Article 9 of this Circular.
c) Charitable, humanitarian, and study encouragement contributions (hereinafter referred to as charitable donations) as guided in Clause 3 Article 9 of this Circular.
2. Tax rate
The rate of personal income tax on incomes from business, wages shall apply the progressive tax table in Article 22 of the Law on Personal income tax, in particular:

3. Tax calculation
Personal income tax on incomes from business, wages is the total tax on each level of income. The tax on each level of income equals the assessable income of that level multiplied by (x) the corresponding tax rate of that level.
For convenience, the abridged method in Appendix 01/PL-TNCN to this Circular may be applied.
Example 4: Mrs. C earns an income of 40 million VND from wages and remuneration in the month, and pay 7% of wages for social insurance premium, 1.5% of wages for health insurance premium. Mrs. C has 2 children under the age of 18, and makes no charitable donations. The preliminary personal income tax incurred by Mrs. C in the month is calculated as follows:
– Taxable income of Mrs. C is 40 million VND.
– Mrs. C is eligible for the deductions below:
+ Personal deduction: 9 million VND
+ Deductions for 02 dependants (02 children):
3.6 million VND x 2 = 7.2 million VND
+ Social insurance, health insurance:
40 million VND × (7% + 1.5%) = 3.4 million VND
Total deduction:
9 million VND + 7.2 million VND + 3.4 million VND = 19.6 million VND
– Assessable income of Mrs. C:
40 million VND – 19.6 million VND = 20.4 million VND
– Tax payable:
Method 1: using the progressive tax table:
+ Level 1: assessable income up to 5 million VND, 5% tax:
5 million VND × 5% = 0.25 million VND
+ Level 1: assessable income from over 5 million VND to 10 million VND, 10% tax:
(10 million VND – 5 million VND) × 10% = 0.5 million VND
+ Level 3: assessable income from over 10 million VND to 18 million VND, 15% tax:
(18 million VND – 10 million VND) × 15% = 1.2 million VND
+ Level 4: assessable income from over 18 million VND to 32 million VND, 20% tax:
(20.4 million VND – 18 million VND) × 20% = 0.48 million VND
– Total preliminary tax payable by Mrs. C in the month:
0.25 million VND + 0.5 million VND + 1.2 million VND + 0.48 million VND = 2.43 million VND
Method 2: Using the abridged method:
+ The assessable income in the month 20.4 million VND is the assessable income in level 4. The personal income tax payable:
20.4 million VND × 20% – 1.65 million VND = 2.43 million VND
4. Converting tax-exclusive incomes into assessable income.
If the wages paid to the worker as guided Clause 2 Article 2 of this Circular are exclusive of tax, they must be converted into assessable income in accordance with Appendix No. 02/PL-TNCN to this Circular. In particular:
a) The income converted into assessable income is the actual income plus (+) benefits paid by the employer on behalf of the worker (if any) minus (-) the deductions. If the amounts paid on behalf of the workers include the house rent, the house rent shall be included in the converted income, but shall not exceed 15% of the total taxable income incurred at the work place (not including house rent).
Formula for calculating converted income:

Where:
– Actual income is the tax-exclusive wages the worker receives every month.
– The amounts paid on the worker’s behalf, the benefits in cash or in kind paid to the worker by the employer as guided in Point dd Clause 2 Article 2 of this Circular.
– Deductions include personal deductions, insurance premiums, contributions to the voluntary pension fund, and charitable donations as guided in Article 9 of this Circular.
Example 5: In 2014, according to the labor contract between Mr. D and company X, Mr. D receives a monthly salary of 31.5 million VND. Apart from that, company X pays for the sports club membership of 1 million VND/month on behalf of Mr. D. Mr. D has to pay 1.5 million VND/month for compulsory insurance. Company X is responsible for paying personal income tax on behalf of Mr. D. In the year Mr. D only has a personal deduction for himself, no dependents, and does not make charitable donations.
The monthly personal income tax payable by Mr. D:
– Converted income:
31.5 million VND + 1 million VND – (9 million VND + 1.5 million VND) = 22 million VND
– Assessable income (according to Appendix No. 02/PL-TNCN):
(22 million VND – 1.65 million VND)/0.8 = 25.4375 million VND
– Personal income tax payable by Mr. D (according to Appendix No. 01/PL-TNCN):
25.4375 million VND × 20% – 1.65 million VND = 3.4375 million VND
Example 6: Company X also pays 6 million VND/month in house rent on behalf of Mr. D. The monthly personal income tax payable by Mr. D:
Step 1: Calculate the house rent paid on Mr. D’s behalf that is included in converted income
– Converted income (exclusive of house rent):
31.5 million VND + 1 million VND – (9 million VND + 1.5 million VND) = 22 million VND
– Assessable income (according to Appendix No. 02/PL-TNCN):
(22 million VND – 1.65 million VND)/0.8 = 25.4375 million VND
– Taxable income (exclusive of house rent):
25.4375 million VND + 9 million VND + 1.5 million VND = 35.9375 million VND/month
– 15% of total taxable income (exclusive of house rent):
35.9375 million VND × 15% = 5.390 million VND/month
Thus the house rent included in the converted income is 5.390 million VND/month
Step 2: Calculate assessable income
– Converted income:
31.5 million VND + 1 million VND + 5.390 million VND – (9 million VND + 1.5 million VND) = 27.39 million VND/month
– Assessable income (converted in accordance with Appendix No. 02/PL-TNCN):
(27.39 million VND – 3.25 million VND)/0.75 = 32.187 million VND/month
– Personal income tax payable:
32.187 million VND × 25% – 3.25 million VND = 4.797 million VND/month
– Monthly taxable income incurred by Mr. D:
31.5 million VND + 1 million VND + 5.390 million VND + 4.797 million VND = 42.687 million VND/month
Or:
32.187 million VND + 9 million VND + 1.5 million VND = 42.687 million VND/month.
b) If the person is required to settle tax, the taxable income in the year is the sum of taxable income of each month based on the converted assessable income. If the person earns tax-exclusive incomes from multiple organizations, the taxable income in the year is the sum of taxable income of each month paid by each organization in the year.
Example 7: Mr. D in example 6 above has a contract and earn an income of 12 million VND/month at company Y from January 2014 to May 2014 apart from the incomes earned at company X. Company Y also pays personal income tax on behalf of Mr. D.
Final personal income tax incurred by Mr. D in 2014:
– Taxable income in the year earned by Mr. D at company X:
42.687 million VND x 12 months = 512.244 million VND
– At company Y:
+ Monthly assessable income (converted in accordance with Appendix No. 02/PL-TNCN):
(12 million VND – 0.75 million VND)/0.85 = 13.235 million VND
+ Taxable income in the year earned at company Y:
13.235 million VND x 5 months = 66.175 million VND
– Total taxable income earned by Mr. D in 2014:
512.244 million VND + 66. 175 million VND = 578.419 million VND
– Monthly assessable income:
(578.419 million VND : 12 months) – (9 million VND + 1.5 million VND) = 37.702 million VND
– Personal income tax payable in the year:
(37.702 million VND × 25% – 3.25 million VND) × 12 months = 74.105 million VND.
5. The basis for calculating tax on incomes lottery agents, insurance agents, network marketing is the assessable income and the personal income tax withholding rate. In particular:
a) Assessable income is the taxable income from lottery agents, insurance agents, network marketing, including: commissions of agents, rewards in any shape or form, supports, and other amounts the person receives from lottery companies, insurers and network marketing companies.
b) Taxable income shall be calculated when the income is paid to the person by the lottery company, insurer, or network marketing company.
c) Personal income tax withholding rate:
c.1) The lottery company shall withhold personal income tax on the monthly assessable income earned by the person as follows:
Unit: 1,000 VND

c.2) The insurer or network marketing company shall withhold personal income tax on the monthly assessable income earned by the person as follows:
Unit: 1,000 VND

6. The basis for calculating accrued insurance premiums and accrued contributions to the voluntary pension fund is the accrued premiums for life insurance and other optional insurance, accrued contribution to the voluntary pension fund that is paid or made by the employer on behalf of the worker, and the withholding rate of 10%.
Before providing insurance money and pension for the person, the insurer and the voluntary pension fund shall withhold 10% tax on the accrued insurance premiums and accrued contribution to the voluntary pension fund that is paid or made by the employer on behalf of the worker from July 01, 2013.
The insurer and the voluntary pension fund shall separately monitor the premiums for life insurance and other optional insurance, accrued contribution to the voluntary pension fund that are paid or made by the employer on behalf of the worker as the basis for calculating personal income tax.
Article 8. Calculating taxable incomes from business and incomes from wages
1. Incomes from business
Assessable income from business equal revenue minus rational expenses related to the generation of taxable income in the tax period.
Taxable income from business is calculated as follows:
a) For the person doing business without totally complying with legislation on accounting and invoicing.
a.1) The business person that complies with legislation on bookkeeping, invoicing and fails to calculate revenue, expenses, and taxable income, (hereinafter referred to as flat-tax payer)
a.1.1) The taxable income incurred by a flat-tax payer is calculated as follows:

Where:
– The flat revenue is determined based on the declaration made by the business person, database of the tax authority, result of investigation into actual revenue carried out by the tax authority, and opinions of the Tax Advisory Council of the commune or ward.
– The proportion of taxable income is specified in Point a.4 Clause 1 of this Article.
a.1.2) For the businessperson paying flat tax using invoices.
a.1.2.1) The flat-tax payer that uses invoice books shall pay personal income tax on the excess, apart from the tax on flat revenue, if the revenue in the quarter on the invoices is higher than the flat revenue.
a.1.2.1) The flat-tax payer that uses invoices sold separately by the tax authority shall declare and pay 10% personal income tax on the taxable income earned at a time.
The taxable income earned at a time is calculated as follows:

Where:
– Revenue that incurs taxable income earned
– The proportion of taxable income is specified in Point a.4 Clause 1 of this Article.
a.1.2.3) If the flat-tax payer that uses invoice books requests a refund of personal income tax, the assessable revenue in the year is calculated as follows:
– If the revenue on invoices of the whole year is lower than the flat revenue, the assessable revenue of the year is the flat revenue.
– If the revenue on invoices of the whole year is higher than the flat revenue, the assessable revenue of the year is the revenue on invoices.
a.2) If the business person is only able to calculate the revenue, not expense, the taxable income is calculated as follows:

Where:
– The calculation of the revenue for calculating taxable income in the tax period is guided in Point b.1 Clause 1 of this Article.
– The proportion of taxable income is specified in Point a.4 Clause 1 of this Article.
– Other taxable incomes are the incomes earned during the business, including: fines for contract violations, fines for late payment, bank interests during payment process; interests on deferred payments or instalment sales, profits on the sales of fixed assets, money from sale of scrap, refuse, and other taxable income.
a.3) For nomadic business persons and non-business persons that need invoices to sell goods and services.
Nomadic business persons and non-business persons that need invoices to sell goods and services shall declare and pay 10% personal income tax on the taxable income earned at a time.
The taxable income earned at a time is calculated similarly to the income earned by the flat-tax payer that uses invoices sold separately by the tax authority shall as guided in Point a.1.2.2 Clause 1 of this Article.
a.4) Proportion of taxable income
The proportion of taxable income to revenue is applicable to the business persons that fail to totally comply with legislation on accounting, invoicing, nomadic business persons, and non-business persons:

If a person engages in multiple trades, the proportion of the primary operation shall apply. If a person engages in multiple trades without being able to identify the primary operation, the proportion of “other business activities” shall apply.
b) The taxable income earned by the business person that properly does accounting and invoicing is calculated as follows:

b.1) Revenue for calculating taxable income in the tax period
The revenue for calculating taxable income from business every payments for goods sale, processing, commissions, goods and service provision received during the tax period, including subsidies, surcharges, extra pays the business person receives, whether collected or not yet collected, and determined based on accounting books.
b.1.1) The time to calculate revenue for calculating taxable income:
b.1.1.1) For goods sale, it is the time when the ownership of goods or rights to use goods are transferred, or when the sale invoice is issued.
b.1.1.2) For service provision, it is the time the services are completely provided for the customer or when the service invoice is issued. For the lease of houses, rights to use land, water surface, and other assets, it is the effective date of the lease contract.
If the invoice is issued before the ownership of goods is transferred (or before the services are completely provided), the time to calculate revenue is when the invoice is issued, and vice versa.
b.1.2) The revenue for calculating taxable income in some cases are determined as follows:
b.1.2.1) The revenue from instalment sales is determined based on the sale prices of goods paid in a lump sum, exclusive of instalment interest.
b.1.2.2) The revenue from deferred payments for goods are the money earned from the sale of goods or services paid in a lump-sum, exclusive of interest on deferred payments.
If the payment under the instalment or deferral sale contract stretches over multiple tax periods, the revenue is the amount receivables from the buyer in the tax period, exclusive of interest on instalment or deferred payment according to the contractual term.
The calculation of expense when calculating taxable income from instalment sales and deferred payments must be consistent with the revenue.
b.1.2.3) When goods and services are used for exchange, donation, equipment, or rewarding workers, the revenue is calculated based on the sale prices of similar goods and services on the market at those times.
b.1.2.4) Where goods and services created by the business person to serve his or her own business, the revenue is the cost of production of such goods and services.
b.1.2.5) For goods processing, the revenue is the total amount of money earned from the processing, including the remuneration, payment for fuel, machines, ancillary materials, and other payments for goods processing.
b.1.2.6) The revenue from the sale of goods deposited by other business persons is the commission received under the agent or deposit contracts.
b.1.2.7) The revenue from leasing out assets is determined based on the contracted, whether paid or unpaid.
Where the lessee pays the rent for many years in advance, the revenue for calculating taxable income shall be distributed over the number of years being paid, or revenue from the lump-sum payment.
b.1.2.8) The revenue from construction and installation is the value of the building work or work item, or the value of the part handed over. If the construction, installation is exclusive of materials, machinery and equipment, the assessable revenue is the money earned from the construction, installation without the value of raw materials, machinery and equipment.
If the construction, installation in inclusive of materials, machinery and equipment, the assessable revenue is the money earned from the construction, installation inclusive of the value of raw materials, machinery and equipment.
b.1.2.9) Revenue from transport services are the entire revenue from transporting passengers, luggage, and goods that is earned during the tax period.
b.2) Rational deductible expenses
Rational deductible expenses are actual expenses that are related to the business and have sufficient invoices as prescribed by law. In particular:
b.2.1) Expenditures on wages, allowances, benefits, and other payments to workers under labor contracts, service contracts or collective bargaining agreement according to the Labor Code.
The expenditures on wages do not include wages of the business household owner or the members whose names are stated in the Certificate of Business registration of the business group.
The expenditure on costumes of workers shall not exceed 5,000,000 VND/person/year. The maximum deductible expenditure on costumes both in cash and in kind shall not exceed shall not exceed 5,000,000/person/year. For special industries, this expenditure shall be specified by the Ministry of Finance.
b.2.2) Expenditure on materials, fuel, energy, and goods used for the production and sale of goods and services related to the generation of revenue and taxable income in the period shall be calculated by the business person or households based on their rational consumption levels and actual prices.
Where the consumption levels of some materials, fuel, or goods have been imposed by the State, such levels shall apply.
All loss of materials, assets, capital, and goods shall not be included in the rational expense, except for the uncompensated loss caused by natural disaster, fire, epidemics, and force majeure.
Where some supplies and goods used for both personal consumption and business, only the proportion used for business is included in expense.
b.2.3) Depreciation, expenditures on maintenance of fixed assets used for production or sale of goods and services. In particular:
b.2.3.1) The depreciation of fixed assets shall be included in rational expense when the conditions below are satisfied:
– The fixed assets are used for production and business.
– There are sufficient invoices and papers proving such fixed assets are under the ownership of the business person.
– The fixed assets are monitored and managed in the accounting book of the business person in accordance with the current management and accounting regime.
The depreciation of cars with 09 seats or fewer shall not be included in rational expense.
b.2.3.2) The depreciation of fixed assets shall be included in rational expense in accordance with the regulations on managing, using and depreciating fixed assets.
b.2.3.3) The fixed assets that are fully depreciated but still used for production or business shall not be deprecated any longer.
The depreciation of fixed assets used for both business and other purposes shall be included in rational expense based on the proportion of their use for business.
b.2.4) Interest the loans serving production and sale of goods and services that is related to the generation of revenue and taxable income.
The rate of interest on loan is the actual interest rate in loan contracts with credit institutions, branches of foreign banks or economic organizations. Where the loan is are not given by a credit institution, branch of a foreign bank or economic organization, the interest on loans is determined according to the loan contract and shall not exceed 1.5 times the fundamental interest rate announced by the State bank of Vietnam when the loan is taken.
The aforesaid interest does not include the interest on the loan taken to make capital contribution to the establishment of a business.
b.2.5) Administrative expense, including:
b.2.5.1) Expenditure on electricity, water supply, telephone, stationery, audit, legal services, designing, insurance on assets, technical services, and other external services.
b.2.5.2) Expenditures on the acquisition of assets that are not fixed assets such as expenditure on the purchase and use of technical documents, patents, licenses for technology transfer, trade marks shall be gradually distributed to the operating expense.
b.2.5.3) Rents for fixed assets according to lease contracts. If the rent for lease contract for many years is paid in a lump sum, it shall be gradually distributed to the production, operating expense over the years during which such fixed assets are used.
b.2.5.4) Expenditures on other external services and outsourced services serving the production and sale of goods and services with invoices.
b.2.5.5) Expenditure on the sale of goods and services, including: expenditure on preservation, packaging, transportation, loading, storage, and warranty of products.
b.2.6) Taxes, fees, charges, land rents payable that are related to the production and sale of goods and services (except for the input VAT, personal income tax that are withheld, other taxes, fees, charges and other receipts that are not included in expense as prescribed by law), including:
b.2.6.1) License tax, export tax, import tax, excise duty, resource tax, levy on agricultural land, levy on non-agricultural land, environmental protection tax, land rent, water surface rent.
b.2.6.2) VAT that may be included in expense as prescribed by law.
b.2.6.3) The fees and charges paid by the business to government budget according to legislation on fees and charges.
b.2.7) Allowances for business trips of workers (not including payments for transport and accommodation) shall not exceed twice the limits imposed by the Ministry of Finance that are applicable to officials and civil servants.
The payments for transport and accommodation of the worker on a business trip may be included in deductible expense when calculating taxable income if they have sufficient and valid invoices. If the business person provides a flat allowance for transport and accommodation for the worker, it shall be included in deductible expense according to regulations of the Ministry of Finance applicable to officials and civil servants.
b.2.8) Other expenditures related to the generation of revenue and taxable income that have valid invoices.
b.3) Other taxable incomes
Other taxable incomes are the incomes earned during the business, including: fines for contract violations, fines for late payment, bank interests during payment process; interests on instalment plans, profits on the sales of fixed assets, money from sale of scrap, refuse, and other taxable income.
c) For the group of business persons
If multiple people have their names stated in a Certificate of Business registration, including the case in which multiple people have their names stated in a certificate of rights to use land, ownership of house and other property on land when the building or premises are leased out (hereinafter referred to as group of business persons) the taxable income earned by each person shall be distributed using one of the methods below after the taxable income from business is calculated according to Point a and Point b Clause 1 of this Article:
c.1) According to the proportion of capital contribution of each person in the Certificate of Business registration.
c.2) According to agreements among the persons.
c.3) According to the average income per person if the Certificate of Business registration does not specify the proportions of capital contributions or agreement on income distribution among the persons.
Based on the taxable income of every person participating in the business calculated as stated above, each individual shall make deductions as guided in Article 9 of this Circular to calculate their assessable income and personal income tax payable.
2. Taxable income from wages
a) The taxable income from wages equals the sum of wages, remunerations and other incomes considered wages received by the taxpayer in the tax period as guided in Clause 2 Article 2 of this Circular.
b) Time to calculate taxable income:
Taxable income from wages and remuneration shall be calculated when the income is paid to the taxpayer.
The taxable income from accrued insurance premium guided in Point dd.2 Clause 2 Article 2 of this Circular shall be calculated when the insurer or the voluntary pension fund pays the insurance money.
3. The taxable income of a person that earns incomes from both business and wages is the sum of taxable income from business and wages.
Article 9. Deductions
The deductions guided in this Article are the amounts deducted from the taxable income of the person before calculating taxable income from wages, remunerations, and business. In particular:
1. Personal deductions
According to Article 19 of the Law on Personal income tax, Clause 4 Article 1 of the Law on the amendments to the Law on Personal income tax, and Article 12 of the Decree No. 65/2013/NĐ-CP:
a) Personal deduction is the amount of money deducted from the taxable income before calculating tax on incomes from business, or wages earned by the resident taxpayer.
If the resident earns income from both business and wages, one deduction from the total income from business and wages shall be made.
b) Levels of personal deductions
b.1) Deduction for the taxpayer: 9 million VND/month, 108 million VND/year.
b.2) Deduction for each dependant: 3.6 million VND/month.
c) Calculating deduction
c.1) Personal deduction for the taxpayer:
c.1.1) The taxpayer that has multiple sources of income from wages and business shall calculate the personal deduction for himself in a place at a time (considered a full month).
c.1.2) The foreigner being a resident in Vietnam shall make personal deduction from January (or the month of arrival if the person comes to Vietnam for the first time) until the month in which the labor contract expires and that person leaves Vietnam in the tax year (considered a full month).
Example 8: Mr. E is a foreigner that comes to work in Vietnam continuously from March 01, 2014. On November 15, 2014, the labor contract expires and Mr. E goes home. Mr. E is present in Vietnam for 183 days from March 01, 2014 until the date of departure. Thus in 2014, Mr. E is a resident and may make a personal deduction from January until the end of November 2014.
Example 9: Mrs. G is a foreigner who comes to Vietnam for the first time on September 21, 2013. On June 15, 2014, the labor contract expires and Mrs. G leaves Vietnam. Mrs. G is present in Vietnam for 187 days during the period from September 21, 2013 to June 15, 2013. Thus in the first tax year (from September 21, 2013 to September 20, 2014), Mrs. G is considered a resident in Vietnam and may make a personal deduction from September 2013 until the end of June 2014.
c.1.3) If the person has not made personal deduction or the deduction does not cover 12 months in the tax year, the person may make deduction for 12 months before settling tax.
c.2) Deduction for dependants
c.2.1) The taxpayer may make deductions for his or her dependants if the taxpayer has applied for tax registration and been issued with the tax code.
c.2.2) When registering deductions for dependants, the taxpayer shall be issued with tax codes for dependants and make preliminary deductions in the year from the registration date. The dependants that are registered before this Circular takes effect are still eligible for deductions until being issued with tax codes.
c.2.3) If the taxpayer has not made deductions for dependants in the tax year, the deductions for dependants shall be made from the month in which the custody is given when the taxpayer settles tax and registers deductions for dependants. Deductions for other dependants, who are defined in Point d.4 Clause of this Article, must be registered by December 31 of the tax year, otherwise the deduction for the whole tax year shall not be made.
c.2.4) The deduction for a dependant shall apply to only one taxpayer in the tax year. Where multiple taxpayers have the same dependant to provide for, they shall reach an agreement on the person that makes the deduction for such dependant.
d) Dependants include:
d.1) Children, legitimate adopted children, illegitimate children, stepchildren, in particular:
d.1.1) Children under 18 years of age.
Example 10: A child of Mr. H born on July 25, 2014 is considered a dependant from July 2014.
d.1.2) Children from 18 years of age and over that are disabled and incapable of work.
d.1.3) Children studying in Vietnam or overseas in universities, college, vocational schools, including children from 18 years of age and over in high schools (including the period awaiting university enrolment result from June to September in 12^th grade) that have no income or the average monthly income in the year from all sources ≤ 1,000,000 VND.
d.2) The taxpayer’s spouse that meet the conditions in Point dd Clause 1 of this Article.
d.3) The taxpayer’s parents, parents-in-law, stepparents, legitimate adoptive parents that meet the conditions in Point dd Clause 1 of this Article.
d.4) Other dependants that the taxpayer has to provide for, who meet the conditions in Point dd Clause 1 of this Article, including:
d.4.1) The taxpayer’s brothers and sisters.
d.4.2) The taxpayer’s grandparents, aunts, uncles.
d.4.3) The taxpayer’s nieces and nephews.
d.4.4) Other people to provide for as prescribed by law.
dd) A person that meet the conditions below shall be considered a dependant mentioned in Point d.2, d.3, d.4 Clause 1 of this Article:
đ.1) The person of working age must meet all conditions below:
dd.1.1) The person is disabled and incapable of work.
dd.1.2) The person has no income or his average monthly income from all sources does not exceed 1,000,000 VND.
dd.2) The people outside working age that have no income or their average monthly income from all sources does not exceed 1,000,000 VND.
a) The disabled that are incapable of work mentioned in Point dd.1.1 Clause 1of this Article are the people regulated by legislation on the disabled and ill people incapable of works (sufferers from AIDS, cancer, chronic kidney failure, etc.)
g) Documents proving dependants
g.1) Children:
g.1.1) For children under 18 years of age: photocopies of the Certificates of birth and ID cards (if any).
g.1.2) For children from 18 years of age and over that are disabled and incapable of work:
g.1.2.1) Photocopies of the Certificates of birth and ID cards (if any).
g.1.2.2) Photocopies of Certificates of disability according to legislation on the disabled.
g.1.3) For children in school mentioned in Point d.1.3 Clause 1 of this Article:
g.1.3.1) Photocopies of the Certificates of Birth.
g.1.3.2) Photocopy of the student’s cards or declarations certified by the schools, or other papers proving the study at such schools.
g.1.4) For adopted children, illegitimate children, stepchildren: apart from the aforesaid papers, other papers proving the relationship are required, such as photocopies of the decisions on certification of adoption made by competent authorities.
g.2) For spouse:
– A photocopy of the ID card
– A photocopy of the household book (which proves the husband and wife relationship) or a photocopy of the Certificate of marriage.
If the spouse is of working age, other papers proving the dependant’s incapability of work are required, apart from the aforesaid papers, such as the Certificate of disability according to legislation on the disabled that are incapable of works, a photocopy of the medical record of the ill person incapable of work (sufferer from AIDS, cancer, chronic kidney failure, etc.)
g.3) For parents, parents-in-law, stepparents, legitimate adoptive parents:
– Photocopies of ID cards
– Papers proving the relationship between the dependants and the taxpayer such as a photocopy of the household book (if their names are in the same household book), certificates of birth, decisions on certification of adoptions made by competent authorities.
If they are of working age, other papers proving the dependants’ incapability of work are required, apart from the aforesaid papers, such as Certificates of disability according to legislation on the disabled that are incapable of works, photocopies of the medical records of the ill persons incapable of work (sufferers from AIDS, cancer, chronic kidney failure, etc.)
g.4) For other people mentioned in Point d.4 Clause 1 of this Article, the proving documents include:
g.4.1) photocopies of Certificates of birth or ID cards.
g.4.2) Other legitimate papers to determine the custody as prescribed by law.
If the dependants are of working age, other papers proving the dependant’s incapability of work is required, apart from the aforesaid papers, such as the Certificate of disability according to legislation on the disabled that are incapable of works, a photocopy of the medical record of the ill person incapable of work (sufferer from AIDS, cancer, chronic kidney failure, etc.)
The legitimate papers mentioned in Point g.4.2 Clause 1 of this Article are any legal document that proves the relationship between the taxpayer and the dependant, such as:
– Photocopies of the papers proving the custody (if any).
– A photocopy of the household book (if their names are in the same household book).
– A photocopy of the certificate of temporary residence of the dependent (if their names are not in the same household book).
– A declaration that the dependant is living with the taxpayer, which made by the taxpayer according to the forms provided in documents on tax administration and certified by the People’s Committee of the commune where the taxpayer resides.
– A declaration that the dependant is residing locally and living alone, which is made by the taxpayer according to the forms provided in documents on tax administration and certified by the People’s Committee of the commune where the taxpayer resides.
g.5) If the resident is a foreigner, equivalent legal documents proving the dependant are required.
g.6) Where the taxpayer working in economic organizations, public services agencies has specified his dependants being his parents, spouse, children, and other dependants in his or her résumé, the documents proving the dependants are the documents mentioned in Point g.1, g.2, g.3, g.4, g.5 Clause 1 of this Article, or only the dependant registration form certified by the head of the unit on the left.
The head of the unit is only responsible for the names of dependants, their years of birth and relationship with the taxpayer. The taxpayer is responsible for other information.
h) Declaration of deduction for dependants
h.1) The taxpayer that earns 09 million VND/month or less from business or wages might not register dependants.
h.2) The taxpayer that earns over 09 million VND/month from business and wages shall follow the procedure below to make deductions for dependants:
h.2.1) For taxpayers that earn incomes from wages:
h.2.1.1) Registration of dependants
h.2.1.1.1) First registration of dependants:
The taxpayer that earns income from wages shall submit 02 applications for dependant registration (using the form provided in guiding documents on tax administration) to the income payer as the basis for calculating deductions for dependants.
The income payer shall keep 01 application and submit 01 application to the local tax authority when submitting the personal income tax declaration of that person in accordance with the Law on Tax administration.
The person that directly declares tax at the tax authority shall submit 01 application for dependant registration (using the form provided in guiding documents on tax administration) to the tax authority that monitors the income payer when submitting his declaration of personal income tax in accordance with the Law on Tax administration.
h.2.1.1.2) Registering changes of dependants:
Where the number of dependants are changed (increased or decreased), the taxpayer shall make an additional declaration using the form provided in guiding documents on tax administration, and submit it to the income payer (or to the tax authority if the taxpayer declares tax directly at the tax authority).
h.2.1.2) Documents and deadline for submitting documents proving the dependants:
– h.2.1.2) Documents and deadline for submitting documents proving the dependants:
The income payer shall keep the documents proving the dependants and present them when the tax authority carries out tax inspections.
– The documents proving the dependants shall be submitted within 03 months from the day on which the application for dependant registration is submitted (including the registration of change of dependants).
If the taxpayer fails to submit documents proving dependants by the aforesaid deadline, no deductions for dependants shall be made and the tax payable shall be adjusted.
h.2.2) Where the taxpayer earns incomes from business
h.2.2.1) Registration of dependants
h.2.2.1.1) The business person that pays tax according to declarations shall submit an application for dependant registration, using the form provided in guiding documents on tax administration, to the local tax authority together with the provisional tax declaration. Where the number of dependants are changed (increased or decreased), the taxpayer shall make an additional declaration of the change using the form provided in guiding documents on tax administration, and submit it to the local tax authority.
h.2.2.1.2) The business person that pays flat tax shall declare deductions for dependants in the flat tax declaration.
h.2.2.2) The documents proving the dependants shall be submitted within 03 months from the day on which the declaration of deductions is made (including the change in number of deductions or commencement of the business).
h.2.2.3) If the taxpayer fails to submit documents proving dependants by the aforesaid deadline, no deductions for dependants shall be made and the tax payable shall be adjusted. The taxpayer that pays flat tax shall adjust the flat tax.
i) The taxpayer shall register and submit proving documents for a dependant once throughout the deduction period. Where the taxpayer changes the workplace or business location, the application for dependant registration and proving documents shall be similarly submitted as guided in Point h.2.1.1.1 Clause 1 of this Article.
2. Deductions for insurance premiums and contributions to the voluntary pension fund
a) Insurance premiums include premiums for social insurance, health insurance, unemployment insurance and professional liability insurance, which is compulsory for some professions.
b) Contributions to the voluntary pension fund
The contributions to the voluntary pension fund are deducted from the taxable income, but the deduction shall not exceed 01 million VND/month (12 million VND/year) when the worker participates in voluntary pension plans guided by the Ministry of Finance, even the worker participates in multiple pension funds. The basis for determining deductible income is photocopies of payment bills given by the voluntary pension fund.
Example 11: Mr. Y contributes to the voluntary pension fund by concluding insurance contracts with insurers or other enterprises allowed to provide voluntary pension plans. If such voluntary pension plans are conformable with regulations of the Ministry of Finance and approved by the Ministry of Finance, Mr. Y shall have the amounts below deducted from his taxable income:
– If his contribution to the voluntary pension fund is 800,000 VND/month, which is equivalent to 9,600,000 VND/year, the deduction from his taxable income shall be 9,600,000 VND/year.
– If his contribution to the voluntary pension fund is 2,000,000 VND/month which is equivalent to 24,000,000 VND/year, the deduction from his taxable income shall be 12,000,000 VND/year.
c) Where the foreigner being a resident in Vietnam, the Vietnamese person being a resident but works overseas earns incomes from business or wages overseas and pay compulsory insurance premiums required by the country where the person holds the nationality or works that are similar to that in Vietnam such as social insurance, health insurance, unemployment insurance, professional liability insurance, and other compulsory insurance, such insurance premiums may be deducted from the taxable income from business and wages when calculating personal income tax.
Foreigners and Vietnamese people who pay the aforesaid insurance premiums overseas shall have them provisionally deducted from the income in the year (if supporting documents are provided). Deductions shall be officially made when they settle tax. If no supporting documents are provided for immediate deduction, a lump-sum deduction shall be made when settling tax.
d) Insurance premiums and contributions to the voluntary pension fund in the year shall be deducted from the taxable income earned in that year.
dd) The documents proving the aforesaid deductible insurance premiums are photocopies of payment receipts issued by the insurers or written certification made by the income payer that the insurance premiums are withheld or paid (if they are paid by the income payer on behalf of the worker).
3. Deductible charitable donations.
a) The charitable donations shall be deducted from the taxable income from business and wages before calculating the tax incurred by a resident taxpayer, in particular:
a.1) Donations to the establishments that take care of disadvantaged children, the disabled, and the homeless elderly people.
The establishments that take care of disadvantaged children, the disabled, and the homeless elderly people must be established and operated in accordance with the Government’s Decree No. 68/2008/NĐ-CP dated May 30, 2008 on the conditions and procedure for establishing, the structure, operation, and dissolution of social protection organizations, the Government’s Decree No. 81/2012/NĐ-CP dated October 08, 2012 on amendments to the Government’s Decree No.68/2008/NĐ-CP dated May 30, 2008 on the conditions and procedure for establishing, the structure, operation, and dissolution of social protection organizations, and the Government’s Decree No. 109/2002/NĐ-CP dated December 27, 2002 on amendments to the Government’s Decree No. 195/CP dated December 31, 1994 elaborating and providing guidance on the implementation of a number of articles the Labor Code on hours or work and rest.
The documents proving the donations to the establishments that take care of disadvantaged children, the disabled, and the homeless elderly people are valid notes of receipts of such establishments.
a.2) The contributions to charitable, humanitarian and study encouragement funds established and operated in accordance with the Government’s Decree No. 30/2012/NĐ-CP dated April 12, 2012 on the organization and operation of non-profit social funds, charitable funds, and other documents related to the management and use of sponsorships.
The documents proving charitable donations are valid notes of received made by the central or provincial organizations and funds.
b) The charitable donations made in a tax year shall be deducted from the taxable income earned in that tax year. The donations that are not completely deducted shall be deducted from the taxable income earned in the next tax year. The maximum deduction shall not exceed the assessable income from wages and business earned in the tax year in which the charitable donations are made.
Article 10. Basis for calculating tax on incomes from capital investment.
The basis for calculating tax on incomes from capital investment is the assessable income and tax rates.
1. Assessable income
Assessable income from capital investment is the taxable income earned by the individual according to Clause 3 Article 2 of this Circular.
2. The tax rate on the income from capital investment is 5% according to the whole income tax table.
3. Time to calculate the assessable income
The assessable income from capital investment shall be calculated when the taxpayer is paid by the income payer.
The times to calculate assessable income in some cases:
a) The income from additional value of capital contribution guided in Point d Clause 3 Article 2 of this Circular shall be calculated when the person actually receives the income when the enterprise is dissolved, converted, divided, merged, amalgamated, or when the capital is withdrawn.
b) The income from reinvested profit as guided in Point g Clause 2 Article 2 of this Circular shall be calculated when the person transfers or withdraws capital.
c) The income from dividend in shares guided in Point g Clause 3 of this Article 3 shall be calculated when the person transfers his shares.
d) Where the individual receives an income from outward investment in any shape or form, the assessable income shall be calculated when the person receives the income.
4. Tax calculation

Article 11. Basis for calculating tax on incomes from capital transfer
1. For income from transferring contributed capital
The basis for calculating tax on incomes from transferring contributed capital is assessable income and the tax rate.
a) The assessable income from transferring contributed capital equals the transfer price minus the purchase price of the transferred capital and rational expenses related to the generation of the income from transferring capital.
Where the enterprise do bookkeeping in foreign currencies and the contributed capital is transferred in foreign currencies, the transfer price and purchase price of the capital are also expressed as foreign currencies. Where the enterprise do bookkeeping in VND and the contributed capital is transferred in foreign currencies, the transfer price shall be expressed VND according to the average exchange rage on the inter-bank foreign exchange market announced by the State bank of Vietnam when the transfer is made.
a.1) Transfer price
Transfer price is the amount of money the individual receives under the capital transfer contract.
If the transfer contract does not specify the price or the price stated in the contract is not conformable with the market price, the tax authority may impose a transfer price in accordance with legislation on tax administration.
a.2) Purchase price
The purchase price of the transferred capital is the value of contributed capital when the transfer is made.
The value of contributed capital at that time includes the value of the capital contributed to the establishment of the Decree, value of additional contributions, value of purchased capital, and value of capital from reinvested profit. In particular:
a.2.1) For capital contributed to the establishment of the enterprise, it is the value of capital when the contribution is made. The value of contributed capital is determined based on accounting books and invoices.
a.2.2) For additional capital contribution, it is the value of the additional capital contribution when the additional contribution is made. The value of additional capital contribution is determined based on accounting books and invoices.
a.2.3) For purchased capital, it is its value when the purchase is made. The purchase price is determined based on the contract to buy capital contribution. If the contract to buy capital contribution does not specify the price or the price stated in the contract is not conformable with the market price, the tax authority may impose a purchase price in accordance with legislation on tax administration.
a.2.4) For the capital from reinvested profit, it is the value of the reinvested profit.
a.3) Deductible expenses when calculating taxable income from capital transfer are rational expenses that are related to the generation of income from capital transfer with valid invoices as prescribed. In particular:
a.3.1) The expenditures on legal procedures necessary for the transfer.
a.3.2) The fees and charges paid to the government budget when following the transfer procedure.
a.3.3) Other expenditures related to the capital transfer.
b) Tax rate
The rate of personal income tax on the income from transferring contributed capital is 20% according to the whole income tax table.
c) Time to calculate the assessable income
Assessable income shall be calculated when the capital transfer contract takes effect. Where making contribution from another capital contribution, the assessable income from transferring capital shall be calculated when the person transfers or withdraws capital.
d) Tax calculation

2. For income from transferring securities
The basis for calculating tax on incomes from transferring securities is assessable income and the tax rate.
a) Assessable income
The assessable income from transferring securities is the sale price of securities minus the purchase price and rational expense related to the transfer.
a.1) Sale price of securities:
a.1.1) The sale price of securities of a public company that are traded at the Stock Exchange is the transaction price at the Stock Exchange. The transaction price is based on the order matching result of prices from transactions at the Stock Exchange.
a.1.2) The sale price of securities of a public company that are not traded at the Stock Exchange but only transferred via the system of the Vietnam Securities Depository is the price stated in the securities transfer contract.
a.1.3) The sale price of securities that do not fall into the cases above is the actual transfer price stated in the transfer contract or the price in the accounting book of the latest unit that transfers securities before the transfer is made.
If the transfer contract does not specify the sale price or the sale price stated in the contract is not conformable with the market price, the tax authority may impose a sale price in accordance with legislation on tax administration.
a.2) Purchase price of securities:
a.2.1) The purchase price of securities of a public company that are traded at the Stock Exchange is the transaction price at the Stock Exchange. The transaction price is based on the order matching result of prices from transactions at the Stock Exchange.
a.2.2) The purchase price of securities of a public company that are not traded at the Stock Exchange but only transferred via the system of the Vietnam Securities Depository is the price stated in the securities transfer contract.
a.2.3) The purchase price of the securities that are purchased at auction is the price written in the announcement of auction winner made by the auction holder and the payment note.
a.2.4) The purchase price of the securities that do not fall into the cases above is the actual transfer price stated in the transfer contract or the price in the accounting book of the latest unit that transfers securities before the transfer is made.
If the transfer contract does not specify the purchase price or the purchase price stated in the contract is not conformable with the market price, the tax authority may impose a purchase price in accordance with legislation on tax administration.
a.3) Deductible expenses when calculating taxable income from transferring securities are rational expenses that are related to securities transfer with valid invoices as prescribed, including:
a.3.1) The expenditures on legal procedures necessary for the transfer.
a.3.2) The fees and charges paid by the transferor when following the transfer procedure.
a.3.3) The charge for securities depository prescribed by the Ministry of Finance and note of receipts of the securities company.
a.3.4) The charge for investment entrustment, fees for management of securities investment portfolio based on the notes of receipts of the entrusted unit.
a.3.5) Charge for securities transfer brokerage.
a.3.6) Charge for investment counseling services and information provision.
a.3.7) Charge for account transfer and ownership transfer via the Vietnam Securities Depository (if any).
a.3.8) Other expenditures with valid supporting documents.
b) Tax rate and tax calculation
b.1) When applying the tax rate of 20%
b.1.1) Application rules
The person that transfers securities shall apply the tax rate of 20% if he has obtained tax registration and a tax code when settling tax, and able to calculate the assessable income from each type of securities as guided in Point a Clause 2 Article 11 of this Circular.
The purchase price of securities is calculated by the average total purchase price of each type of securities sold in the period as follows:

b.1.2) Tax calculation

When settling tax, the person that applies the tax rate of 20% may deduct the tax provisionally paid at the rate of 0.1% in the tax year.
b.2) When applying the tax rate of 0.1%
The person that transfers securities shall provisionally pay a 0.1% tax on the securities transfer price at a time, including the case in which the 20% tax rate applies.
Tax calculation:

c) Time to calculate the assessable income
Time to calculate assessable income from transferring securities:
c.1) For securities of a public company that are traded at the Stock Exchange, it is the time the taxpayer receives the income from securities transfer.
c.2) For securities of a public company that are not traded at the Stock Exchange but only transferred via the system of the Vietnam Securities Depository, it is the time the ownership is transferred at the Vietnam Securities Depository.
c.3) For the securities that do not fall into the cases above, it is the time the securities transfer contract takes effect.
c.4) When making capital contribution by securities without paying tax when making capital contribution, the time to calculate income from transferring securities to make capital contribution is the time the person transfers, withdraws capital.
d) When receiving shares paid as dividend.
When receiving shares paid as dividend, the person might delay paying personal income tax when receiving shares. When transferring such shares, the person shall pay personal income tax on the income from capital investment and the income transferring securities, in particular:
d.1) The basis for determining the personal income tax payable on the income from capital investment is the value of dividend in the accounting book or the quantity of actual shares received multiplied by (x) the face value of such shares and the rate of personal income tax on the income from capital investment.
If the transfer price of the shares paid as dividend is lower than the nominal price, the personal income tax on capital investment shall be calculated at the market price when the transfer is made.
If the person transfers the same type of securities after receiving shares paid as dividend, the person shall declare and pay personal income tax on the all the shares paid as dividends.
d.2) The basis for calculating the personal income tax payable on the income form transferring securities is guided in Point b Clause 2 of this Article.
Example 12: Mr. K is a shareholder of joint-stock company X (listed at the Stock Exchange). In 2011, Mr. K receives 5,000 shares paid as dividend by company X (the face value of a share is 10,000 VND). In February 2014, Mr. K transfers 2,000 shares of company X at a price of 30,000 VND per share. In August 2014, Mr. K transfers 7,000 shares at a price of 20,000 VND per share.
When making the transfer, Mr. K has to pay personal income tax on the income from capital investment and the income from transferring securities, in particular:
* For the transfer in February 2014:
– The personal income tax on the income from capital investment:
(2,000 shares × 10,000 VND) × 5% = 1,000,000 VND
– The personal income tax (preliminary) on income from transferring securities:
(2,000 shares × 30,000 VND) × 0.1% = 60,000 VND
* For the transfer in August 2014:
– The personal income tax on the income from capital investment:
(3,000 shares × 10,000 VND) × 5% = 1.500,000 VND
– The personal income tax (preliminary) on income from transferring securities:
(7,000 shares × 20,000 VND) × 0.1% = 140,000 VND
Article 12. Basis for calculating tax on incomes from real estate transfer
The basis for calculating tax on incomes from transferring contributed capital is assessable income and tax rates.
1. Assessable income
a) The assessable income from transferring rights to use land without constructions thereon equals the transfer price minus (-) the cost price and rational expenses.
a.1) Transfer price
The transfer price of rights to use land is the price stated in the transfer contract when the transfer is made.
If the transfer price is not identifiable or the price stated in the transfer contract is lower than the land price imposed by the People’s Committee of the province when the transfer is made, the transfer price is based on the land price list made by the People’s Committee of the province.
a.2) Cost price:
The cost price of rights to use land in some cases is calculated as follows:
a.2.1) The cost price of the land allocated by the State that is subject to land levy is based on the notes of land levy receives made by the State.
a.2.2) The cost price of the land allocated by the State that is exempt from land levy or eligible for land levy reduction is based on the price imposed by the People’s Committee of the province when land is transfer.
a.2.3) The cost price of land of which the rights to use are transferred from other organizations and individuals is based on the price stated in the transfer contract when the transfer is received.
a.2.4) The cost price of rights to use land put up for auction is the successful bid.
a.2.5) The cost price of land of which the origin does not fall into the cases above is determined based on the documents proving the fulfillment of financial obligations to the state when the certificate of rights to use land, ownership of houses and other property on land is issued.
a.3) Rational expenses:
The deductible expenses when calculating incomes from transferring rights to use land are the expenses related to the transfer with valid invoices, including:
a.3.1) The fees and charges related to the grant of rights to use land that are paid to the government budget by the transferor.
a.3.2) The expenditure on land recovery and leveling (if any).
a.3.3) Other expenditures related to the transfer of rights to use land such as expenditures on legal procedure for transferring, expenditure on measurement services.
b) The assessable income from transferring rights to use land with constructions there on, including future constructions equals the transfer price minus (-) the cost price and rational expenses.
b.1) Transfer price
The transfer price is the price stated in the transfer contract when the transfer is made.
If the contract does not specify the transfer price or the transfer price stated in the contract is lower than the price imposed by the People’s Committee of the province, the transfer price shall be determined based on the list of land prices and the house prices made by the People’s Committee of the province when the transfer is made.
If house prices are not imposed by the People’s Committee of the province, the transfer price is based on the regulations imposed by the Ministry of Construction on house classification, standards and limits of fundamental construction, actual residual value of constructions on land.
For future constructions, it is based on the proportion of capital contribution to the total contract value multiplied by (x) the construction price imposed by the People’s Committee of the province.If the People’s Committee of the province has not imposed the unit price, the rate of construction investment announced by the Ministry of Construction, which is effective when the transfer is made, shall apply.
b.2) Cost price
The cost price is determined based on the price stated in the transfer contract when the purchase is made. If the real estate is not received from a transfer, the cost price is based on the documents proving the fulfillment of financial obligations to the State when the certificate of rights to use land, ownership of land and property on land is issued.
b.3) Rational expenses:
The deductible expenses when calculating incomes from transferring rights to use land are the expenses related to the transfer with valid invoices, including:
b.3.1) The fees and charges related to the grant of rights to use land that are paid to the government budget by the transferor.
b.3.2) The expenditure on land recovery and leveling.
b.3.3) The expenditure on building, upgrading, repairing infrastructure and constructions on land.
b.3.4) Other expenditures related to the real estate transfer such as expenditures on legal procedure for transferring, expenditure on measurement services.
c) Assessable income from transferring ownership of houses, including future houses.
The assessable income from transferring house ownership equals the sale price minus (-) the purchase price and rational expenses.
c.1) Sale price:
The sale price is the actual transfer price based on the market price and stated in the transfer contract.
If the house transfer price stated in the contract is lower than the house price imposed by the People’s Committee of the province when the transfer is made or the transfer contract does not specify the transfer price, the transfer price shall be determined based on price imposed by the People’s Committee.
c.2) Purchase price
The purchase price is determined based on the prices stated in the contract. If the house is not a transferred house or repurchased house, the purchase price is based on the documents proving the fulfillment of financial obligations to the State when the certificate of rights to use land, ownership of land and property on land is issued.
c.3) Rational expenses:
The deductible expenses are the expenses incurred during the transfer with valid invoices, including:
c.3.1) The fees and charges related to the grant of house use right that are paid to the government budget by the transferor.
c.3.2) The expenditure on repairing and upgrading the house.
c.3.3) Other expenditures related to the transfer.
d) Assessable income from transferring the rights to rent land/water surface
The assessable income from transferring the rights to rent land/water surface equals the sublease price minus (-) the initial rent and relevant expenses.
d.1) Sublease price:
The sublease rent equals the rent stated in the contract when transferring the rights to rent land/water surface.
If the sublease price in the contract is lower than the price imposed by the People’s Committee of the province when the sublease is taken, the sublease rent is based on the rent list made by the People’s Committee of the province.
d.2) Rent:
The rent is determined based on the lease contract.
d.3) Rational expenses:
The deductible expenses are the expenses incurred during the transfer with valid invoices, including:
d.3.1) The fees and charges related to the grant of rights to rent land/water surface that are paid to the government budget by the transferor;
d.3.2) The expenditure on land/water surface recovery;
d.3.3) Other expenditures related to the transfer of the rights to rent land/water surface.
2) Tax rate
The rate of tax on real estate transfer is 25% of the assessable income.
Where the taxpayer fails to determine the cost price or fails to provide documents to determine the cost price or purchase price or rent, and legal documents for determining relevant expenses as the basis for calculating the assessable income, the tax rate of 2% of the transfer price of sale price or sublease price shall apply.
3. Time to calculate the assessable income
The assessable income from real estate transfer shall be calculated when the person initiates the procedure for real estate transfer as prescribed by law.
4. Tax calculation
a) Where the assessable income is identifiable, the personal income tax on the income from real estate transfer shall be calculated as follows:

b) Where the taxpayer fails to determine the cost price or fails to provide documents to determine the cost price or purchase price or rent, and legal documents for determining relevant expenses as the basis for calculating the assessable income, the personal income tax shall be calculated as follows:

c) Where the transferred real estate in under a co-ownership, the tax liability incurred by each taxpayer is proportional to their portion of real estate ownership. The basis for determining the portion of ownership is legal documents such as the initial capital contribution agreements, the testament, or the decision on division made by the court, etc. If no legal documents are provided, the tax liability incurred by each taxpayer shall be evenly divided.
Article 13. Basis for calculating tax on incomes from royalties
The basis for calculating tax on incomes from royalties is the assessable income and tax rate.
1. Assessable income
The assessable income from royalties is the excess over 10 million VND of income according to the transfer contract, regardless of the number of payments the taxpayer receives when transferring the subjects of intellectual property rights or technology transfer.
If the transfer of the same subject of intellectual property rights or technology transfer to a transferee is made into multiple contracts, the assessable income is excess over 10 million VND of incomes from all transfer contracts.
If the subject of transfer in under a co-ownership, the assessable income shall be divided among the co-owners. The division ration depends on the Certificate of ownership or rights to use issued by competent authorities.
2. The rate of personal income tax on the income from royalties is 5% according to the whole income tax table.
3. Time to calculate the assessable income
The assessable income shall be calculated when the royalty is paid.
4. Tax calculation

Article 14. Basis for calculating tax on incomes from franchising
The basis for calculating tax on incomes from franchising is the assessable income and tax rate.
1. Assessable income
The assessable income from franchising is the excess over 10 million VND of income according to the transfer contract, regardless of the number of payments the taxpayer receives.
If the franchise for the same subject is made into multiple contract, the assessable income is the excess over 10 million VND of all franchise contracts.
2. Tax rate
The rate of personal income tax on the income from franchising is 5% according to the whole income tax table.
3. Time to calculate the assessable income
The assessable income from franchising shall be calculated when the payment for franchise is made between the franchiser and franchisee.
4. Tax calculation

Article 15. Basis for calculating tax on incomes from winning prizes
The basis for calculating tax on incomes from prizes is the assessable income and tax rate.
1. Assessable income
The assessable income from a prize is the excess over 10 million VND of the prize the taxpayer receives, regardless of the number of payments being made.
If a prize is won by multiple people, the assessable income shall be divided among the prizewinners. The prizewinners shall present legal evidence. If no legal evidence is provided, the prize is considered won by one person. Where a person win multiple prizes in a game, the assessable income is calculated based on the total value of prizes.
Assessable income from some games of chance:
a) The assessable income from a lottery prize is the excess over 10 million VND of 01 lottery prize without any deduction.
b) The assessable income from promotion prize in kind is the excess over 10 million VND of the prize that is converted into cash at the market price when the prize is given without any deduction.
c) Assessable income from betting, casino, and prizes from centers of games with prizes (hereinafter referred to as game centers):
c.1) Assessable income from betting is excess over 10 million VND of the prize that the player receives without any deduction.
c.2) Assessable income obtained from casinos and game centers are the excess over 10 million VND of the prize the player receives in a game. in particular:
c.2.1) The income from prize of a game is the difference between the amount cashed out and the amount cashed in by the player in a game.
The income from prize in foreign currencies must be converted into VND at an applicable exchange rate announced by the State bank when the income is earned.
c.2.2) The amount of cash paid and received in a game is determined as follows:
c.2.2.1) For the game is played using intermediary currencies (chips, tokens) according to the Financial management regulation on games with prizes promulgated by the Minister of Finance:
c.2.2.1.1) The cash-out received by the player in a game is the total value of tokens/chips exchanged for cash by the player during the game.
c.2.2.1.2) The cash paid by the player in a game is the total value of cash exchanged for tokens/chips by the player during the game.
The basis for determining the cash received and paid during a game is the exchange invoices (using the form provided in the Financial management regulation on games with prizes promulgated by the Minister of Finance) and other invoices according to current legislation on accounting.
Example 13: Mr. M has exchanged cash for chips 3 times since he gets in and gets out of the game center. The total value of 3 exchanges is 500 USD. Chips are exchanged for cash twice with a total value of 700 USD. Thus the income from prizes and assessable income earned by Mr. M is determined as follows:
– Income from winning prizes = 700 USD – 500 USD = 200 USD.
– Assessable income = 200 USD × USD/VND exchange rate – 10 million VND
c.2.2.2) For games using slot machines:
c.2.2.2.1) The cash-out received by the player in a game is the total value of cash taken from the machine after a game is over minus the jackpot (if any).
c.2.2.2.2) The cash paid by the player in a game is the total value of cash inserted in the machine from by the player during the game.
The income from jackpots, periodic prizes for lucky customers and similar prizes is the entire value of the prize without any deduction.
Example 14: Mr. N plays with a slot machine using cash. In a game, Mr. N has keys in totally 300 USD. After the game is over, Mr. N withdraws out 1,500 USD in cash from the machine. In that game, Mr. N also wins a jackpot being 1,000 USD (accrued in the cash out). Based on the cash-in and cash-out, the incomes from prizes and assessable incomes earned by Mr. N are calculated as follows:
– The income from the jackpot earned by Mr. B is the entire value of the jackpot:
+ Income from the prize = 1000 USD
+ Assessable income = 1000 USD × USD/VND exchange rate – 10 million VND.
– The income earned by Mr. B from winning prizes from the slot machine:
+ Income from winning prizes:
= 1500 USD – 1000 USD – 300 USD = 200 USD.
+ Assessable income:
= 200 USD x USD/VND exchange rate – 10 million VND.
c.2.3) If the taxable income is not identifiable as guided in Point c.2 Clause 1 of this Article, the prize provider or casino shall pay tax on the total cash-out at a fixed rate on behalf of the prizewinner. When applying the fixed rate of personal income tax, the prize provider or casino shall apply for a registration with the tax authority and announce that the prizes given to prizewinners are post-tax incomes. The fixed tax rate shall be guided by the Ministry of Finance.
c.2.4) A “game” is determined as follows:
– If the game is played using intermediary currencies, the game begins when the player enters the game center and ends when such player leaves the game center.
– For slot machines, the game begins when the player insert cashes in the machine (keys in/cashes in) and ends when the player withdraws cash from the machine (cashes out).
– When a jackpot, periodic prize for the lucky customer or prize in other forms is won, it is consider a separate game.
d) The income form prizes won in games with prizes or competitions is calculated when the every prize is received. The value of prize equals the excess over 10 million VND of prize money the player receives without any deductions.
2. The rate of personal income tax on the income from prizes is 10% according to the whole income tax table.
3. Time to calculate the assessable income
The assessable income from prizes shall be calculated when the prizewinner receives the prize.
4. Tax calculation:

Article 16. Basis for calculating tax on incomes from inheritance and gifts
The basis for calculating tax on incomes from inheritance and gifts is the assessable income and tax rate.
1. Assessable income
The assessable income from inheritance and gifts is the excess over 10 million VND of the inheritance or gifts received. The value of inheritance and gifts is determined as follows:
a) The value of inheritance and gifts being securities is the value of securities when the ownership transfer is registered. In particular:
a.1) The value of securities traded at the Stock Exchange is based on the reference price at the Stock Exchange when the securities ownership is registered.
a.2) The value of securities that do not fall into the case above is based on the latest book value provided by the corresponding issuer before the securities ownership is registered.
b) The assessable income from the inheritance and gifts being contributions to businesses is the value of the contributions based on their latest book values of the companies before the contribution ownership is registered.
c) The value of inheritance and gifts being real estate is determined as follows:
c.1) The value of rights to use land is based on the land price list made by the People’s Committee of the province before the person registers the rights to use real estate.
c.2) The value of houses and constructions on land is based on the regulations of competent authorities in charge of house classification, construction standards and limits imposed by competent authorities, residual value of the house or construction when the ownership is registered.
If the value is not identifiable, the prices imposed by the People’s Committee of the province shall apply.
d) For inheritance and gifts being other assets of which the ownership or rights to use must be registered with state agencies: the value of assets are based on the prices imposed by the People’s Committee of the province when the person registers the ownership or rights to use inheritance and gifts.
2. The rate of personal income tax on the income from inheritance and gifts is 10% according to the whole income tax table.
3. Time to calculate the assessable income
The assessable income from inheritance and gifts is calculated when the person registers the ownership or rights to use of inheritance and gift.
4. Tax payable:

Chapter 3.

BASIS FOR CALCULATING TAX INCURRED BY NON-RESIDENTS

Article 17. Incomes from business
The rate of personal income tax on incomes from business earned by a non-resident equals the revenue from business multiplied by (x) the tax rate.
1. Revenue:
The revenue from business earned by a non-resident is determined similarly to the revenue used for calculate tax on incomes earned by a president from business guided in Clause 1 Article 8 of this Circular.
2. Tax rate
The rates of personal income tax on incomes from business earned by non-residents in each field and industry:
a) 1% for goods sale.
b) 5% for service provision.
c) 2% for production, construction, construction, and other businesses.
Where the non-resident earns revenues from various fields but fails to separate the revenue from each field, the highest tax rate shall apply to the total revenue.
Article 18. Incomes from wages
1. The rate of personal income tax on incomes from wages earned by a non-resident equals the taxable income from wages multiplied by (x) 20% tax.
2. The taxable income from wages earned by a non-resident is similar to that of a resident guided in Clause 2 Article 8 of this Circular.
The taxable income from wages earned in by a non-resident that works both in Vietnam and overseas without being able to separate the income earned in Vietnam shall be calculated as follows:
a) Where the foreigner is not present in Vietnam:

Where: the number of working days in the year is calculated in accordance with the Labor Code of Vietnam.
b) Where the foreigner is present in Vietnam:

Other pre-tax taxable incomes earned in Vietnam mentioned in Point a and Point b above are other benefits in cash or not in cash apart from wages that are provided for the worker or paid on the worker’s behalf by the employer.
Article 19. Incomes from capital investment
The personal income tax on incomes from capital investment earned by a non-resident equals the total taxable income earned by the non-resident from capital investment in other organizations and individuals in Vietnam multiplied by (x) 5% tax.
The assessable income, time to calculate assessable income from capital investment earned by the non-resident are similar to those of a resident guided in Clause 1 and Clause 3 Article 10 of this Circular.
Article 20. Incomes from capital transfer
1. The personal income tax on the income from capital transfer earned by a non-resident equals the total amount of money the non-resident receives from the transfer of capital invested in organizations and individuals in Vietnam multiplied by (x) 0.1% tax, whether the transfer is made in Vietnam or overseas.
The total amount of money the non-resident receives from the transfer of capital invested in organizations and individuals in Vietnam is the capital transfer price without any deductions, including the cost price.
2. The transfer price in some cases:
a. When transferring contributed capital, the transfer price is similar to that of a resident guided in Point a.1 Clause 1 Article 11 of this Circular.
b. When transferring securities, the transfer price is similar to that of a resident guided in Point a.1 Clause 2 Article 11 of this Circular.
3. Time to calculate the assessable income:
b) The assessable income from transferring contributed capital earned by a non-resident shall be calculated when the capital transfer contract takes effect.
b) The time to calculate the assessable income from transferring securities earned by a non-resident is similar to that of a resident as guided in Point c Clause 2 Article 11 of this Circular.
Article 21. Incomes from real estate transfer
1. The personal income tax on the income from real estate transfer earned by a non-resident equals the transfer price multiplied by (x) 2% tax.
The aforesaid transfer price is the total amount the non-resident receives from the real estate transfer without any deductions, including the cost price.
2. The real estate transfer price of a non-resident is similar to that of a resident guided in Points a.1, b.1, c.1, d.1 Clause 1 Article 12 of this Circular.
3. The income from real estate transfer shall be calculated when the non-resident initiates the procedure for real estate transfer as prescribed by law.
Article 22. Incomes from royalties and franchise
1. Tax on incomes from royalties
a) The tax on incomes from royalties earned by a non-resident equals excess over 10 million VND of income from each contract to transfer the subjects of intellectual property rights, technology transfers in Vietnam multiplied by 5% tax.
The determination of incomes from royalties is guided in Point 1 Clause 13 of this Article.
b) The income from royalties shall be calculated when the non-resident receives the royalties from the payer.
2. Incomes from franchising
a) The tax on incomes from franchising earned by a non-resident equals the excess over 10 million VND of income from each franchise contract in Vietnam multiplied by 5% tax.
The determination of incomes from franchising is guided in Point 1 Clause 14 of this Article.
b) The assessable income from franchising shall be calculated when the payment for franchise is made between the franchiser and franchisee.
Article 23. Incomes from prizes, inheritance, and gifts
1. The personal income tax on incomes from prizes, inheritance, or gifts earned by a non-resident equals the assessable income calculated as guided in Clause 2 of this Article multiplied by (x) the 10% tax.
2. Assessable income
a) The assessable income from winning a prize earned by a non-resident is the excess over 10 million VND of the prize won in Vietnam.
The income from winning prizes earned by a non-resident is similar to that earned by a resident as guided in Clause 1 Article 15 of this Circular.
b) The taxable income from inheritance and gifts earned by a non-resident is the excess over 10 million VND of the inheritance or gift received in Vietnam.
The income from inheritance and gifts earned by a non-resident is similar to that earned by a resident as guided in Clause 1 Article 16 of this Circular.
3. Time to calculate the assessable income
a) The assessable income from prizes shall be calculated when the organization or person in Vietnam pays the prize money to the non-resident.
b) The assessable income from inheritance is calculated when the person registers the ownership or rights to use the assets in Vietnam.
c) The assessable income from gift is calculated when the person registers the ownership or rights to use the assets in Vietnam.
Chapter 4.

TAX REGISTRATION, TAX DEDUCTION, TAX DECLARATION, TAX SETTLEMENT, TAX REFUND

Article 24. Tax registration
1. The entities that must apply for tax registration
According to Article 27 of the Decree No. 65/2013/NĐ-CP the entities that are required to apply to personal income tax registration are:
a) Income payers, including:
a.1) Business organizations and individuals, including their branches, dependent units, affiliates that do bookkeeping separately and have separate legal entities.
a.2) State administrative agencies.
a.3) Political organizations, socio-political organizations, socio-professional organizations.
a.4) Public service agencies.
a.5) International organizations and foreign organizations.
a.6) Project management boards, representative offices of foreign organizations.
a.7) Other income payers.
b) Persons that earn taxable incomes include:
b.1) The persons that earn incomes from production or business, including freelancers; the person and households engaged in agricultural production that are not exempt from personal income tax. The persons that earn incomes from production or business who apply for the registration of personal income tax together with other taxes.
b.2) The wage earners, including foreigners working for foreign contractors and foreign sub-contractors in Vietnam.
b.3) The persons that transfer real estate.
b.4) The persons that earn other taxable incomes (if required).
c. The dependants eligible for personal deductions.
The entities mentioned in Point a, Point b and Point c Clause 1 of this Article shall not apply for a new tax registration if tax registration has been obtained and tax codes has been issued, The person that earns multiple taxable incomes shall apply for tax registration once. The tax code shall be used to make declare all kinds of incomes.
2. Tax registration application
The tax registration procedure and application are specified in guiding documents on tax administration.
3. Places to submit the tax registration application
a) The places where the application for tax registration are specified in guiding documents on tax administration.
b) The places to submit the application for tax registration in some particular cases:
b.1) The person that earns income from wages shall submit the application for tax registration to the income player or the local tax authority that monitors the income payer. The income payer shall aggregate and submit the applications for tax registration to the local tax authority.
b.2) The person that earns income from multiple sources: business, wages, other taxable incomes may submit the application for tax registration to the income payer or the local Sub-department of taxation.
b.3) The person that earns other taxable incomes may submit the application for tax registration at any tax authority.
4. Tax registration in some particular cases:
a) The representative of the group of business person shall apply for tax registration as guided in order to obtain the personal tax code. The tax code of the representative of the group of business person shall be used to declare tax, pay VAT, excise duty, license tax incurred by the whole group, and used to declare personal income tax incurred the representative himself. Other capital contributors in the group must apply for tax registration in order to obtain separate tax codes in the same way a business person does.
b) If the person that transfers real estate has not had a tax code, the tax authority shall automatically issue a tax code to the person based on the personal information in the real estate transfer dossier.
c) If a dependant for whom the taxpayer applies for a deduction has not had a tax code, the tax authority shall automatically issue the tax code to the dependant based on the dependant’s information in the application for deduction (the form is provided in guiding documents on tax administration) made by the taxpayer.
Article 25. Tax withholding and certificate of tax withheld at source
1. Tax withholding
Tax withholding is the income payer’s calculating and withholding the tax payable from the taxpayer’s income before paying the income to the tax payer.
a) Incomes earned by non-residents:
The organization or individual that pay taxable incomes to the non-resident shall withhold the personal income tax from the income before it is paid. The determination of tax being withheld is guided in Chapter III (from Article 17 to Article 33) of this Circular.
b) Incomes from wages
b.1) The income payer shall deduct tax from incomes of residents that sign labor contracts for 03 months or longer according to the progressive tax table, including the persons that sign such contracts at various places.
b.2) The income payer shall still withhold tax from the incomes earned residents that sign labor contracts for 03 months but resign before such labor contracts expire according to the progressive tax table.
b.3) The income payer shall withhold tax from the incomes earned by the foreigners working in Vietnam based on the duration of work in Vietnam written in the contract or letter of introduction according to the progressive tax table (if the person has worked in Vietnam for at least 183 days in the tax year) or the whole income tax table (if the person has worked in Vietnam for fewer than 183 days in the tax year).
b.4) The insurer, The voluntary pension fund shall withhold personal income tax from the accrued insurance premiums and contributions to the voluntary pension fund as guided in Clause 6 Article 7 of this Circular.
b.5) The determination of tax withheld from incomes from wages earned by residents is guided in Article 7 of this Circular; the determination of tax withheld from incomes from wages earned by non-residents is guided in Article 18 of this Circular.
c) Incomes from activities of insurance agents, lottery agents, and network marketing
The lottery companies, insurers and network marketing companies that pay incomes for the persons running lottery agents, insurance agents, or network marketing shall withhold personal income tax from their incomes before paying. The determination of tax being withheld is guided in Clause 5 Article 7 of this Circular.
d) Incomes from capital investment
The payer of incomes from capital investment as prescribed in Clause 3 Article 2 of this Circular shall withhold personal income tax from incomes before they are paid to the earners, unless the persons declare tax themselves as guided in Clause 9 Article 26 of this Circular. The determination of tax being withheld is guided in Article 10 of this Circular.
dd) Incomes from transferring securities
0.1% tax on the transfer price shall be withheld from every income from securities transfer before the income is paid to the transferor. Tax shall be withheld as follows:
dd.1) For securities traded at the Stock Exchange:
dd.1.1) The securities company or commercial bank where the person opens the depository account shall withhold 0.1% personal income tax on the transfer price as before the income is paid to the person. The determination of tax being withheld is guided in Point b.2 Clause 2 Article 11 of this Circular.
dd.1.1) The asset management company to which the person entrusts the management of securities investment portfolio shall withhold 0.1% personal income tax on the transfer price of the entrusting person according to the distribution table sent to the depository bank where the company opens its depository account.
dd.2) For securities transfer without the transaction system of the Stock Exchange:
dd.2.1) For securities of a public company that has applied for securities registration at the Vietnam Securities Depository:
The securities company, commercial bank where the person opens the depository account shall withhold 0.1% personal income tax on the transfer price before initiating the procedure for transferring the securities ownership at the Vietnam Securities Depository.
dd.2.2) For securities of a joint-stock company that is not a public company, issues securities and authorizes a securities company to manage the list of shareholders:
The securities company authorized to manage the list of shareholders shall withhold 0.1% personal income tax on the transfer price before initiating the procedure for transferring the securities ownership.
The person that transfers securities shall present the transfer contract to the securities company when initiating the procedure for transferring securities ownership.
e. Incomes earned by non-residents from transferring contributed capital
The organization or person that receives capital contribution from a non-resident shall withhold 0.1% personal income tax on the transfer price.
g) Incomes from winning prizes:
The prize provider shall withhold personal income tax before providing prizes to the prizewinner. The determination of tax being withheld is guided in Article 15 of this Circular.
h) Incomes from royalties and franchising
The organization or person that pay incomes from royalties or franchising shall withhold personal income tax before the income is paid to the person. The tax withheld equals the excess over 10 million VND of the income according to the transfer contract multiplied by (x) 5% tax. If the contract has a high value and is paid in instalments, when paying the first instalment the organization or person that pay incomes shall subtract 10 million VND from the payment, then withhold the amount that equals the remaining amount multiplied by 5% tax. Income tax on the next instalments shall be withheld from each instalment.
i) Withholding tax in other cases
The organization or person that pays a total income from 2 million VND to a resident that does not sign a labor contract (as guided in Point c and Point d Clause 2 Article 2 of this Circular) or that signs a labor contract for less than 03 months shall withhold 10% tax on the income before it is paid to the person.
For the person that earns only a taxable income as stated above but the total taxable income estimated after personal deductions are made does not reach the taxable level, the person shall make and send a commitment (the form is provided in the guiding documents on tax administration) to the income payer as the basis for temporarily exempting the income from personal income tax.
Based on the commitment made the income earner, the income payer shall not withhold tax. At the end of the tax year, the income payer shall make a list of persons that earn incomes below that taxable level (the form is provided in the guiding documents on tax administration) and send it to the tax authority. The persons are responsible for the commitments they made. Any deceit discovered shall be penalized in accordance with the Law on Tax administration.
The persons that make commitments as guided in this Point shall obtain tax registration and have tax codes when the commitments are made.
2. Certificate of tax withheld at source
a) After withholding tax as guided in Clause 1 of this Article, the income payer shall issue certificates of tax withheld at source at the request of the persons that have tax withheld from their incomes. The certificate of tax withheld at source shall not be issued if the person delegates the tax settlement.
b) Issuance of certificates of tax withheld at source in some particular cases:
b.1) If the person does not sign a labor contract or signs a labor contract for less than 03 months, the person is entitled to request the income payer to issue the certificate of tax withheld at source every time tax is withheld, or issue a single certificate of tax withheld at source for multiple withholdings in the same tax period.
Example 15: Mr. Q signs a service contract with company X to cultivate ornamental plants on the company’s premises once per month from September 2013 to April 2014. Company X pays an income of 03 million VND per month to Mr. Q. In this case, Mr. Q may request company X to issue monthly or one certificate of tax withheld at source, which reflect the tax withheld over the period from September 2013 to December 2013, and one certificate of tax withheld at source over the period from January 2014 to April 2014.
b.2) If the person signs a labor contract for more than 03 months, the income payer shall issue only one certificate of tax withheld at source in a tax period.
Example 16: Mr. R signs a long-term labor contract (from September 2013 till the end of August 2014) with company Y. In this case, if Mr. R is required to settle tax at the tax authority and requests company Y to issue the certificate of tax withheld at source, company Y shall issue 01 certificate which reflects the tax withheld from September 2013 till the end of December 2013, and 01 certificate for the period from January 2014 till the end of August 2014.
Article 26. Tax declaration and tax settlement
The payer of taxable incomes and the person that earns taxable incomes shall declare tax and settle tax in accordance with the procedure provided in guiding documents on tax administration. Rules for declaring tax in some cases:
1. Tax declarations made by payers of taxable income.
a) The income payers that withhold personal income tax shall declare tax monthly or quarterly. The income payer might not declare tax if no personal income tax is withheld in the month or in the quarter.
b) The monthly or quarterly tax declaration shall be made from the first month in which tax is withheld, and is applicable to the whole tax year, in particular:
b.1) The income payer that withholds personal income tax on 50 million VND or more in a month in at least one declaration of shall declare tax monthly, unless the income payer is required to declare tax quarterly.
b.2) The income payers that do not declare tax monthly as stated above shall declare tax quarterly.
c) The payer of taxable income shall declare and settle tax on behalf of the authorizing person, whether or not tax is withheld.
2. Tax declarations made by residents that earn incomes from wages and business
a) The residents that earn incomes from wages and directly declare tax at tax authorities include:
a.1) The residents that earn incomes from wages paid by international organizations, embassies, and consulates in Vietnam without withholding tax shall directly declare tax quarterly at tax authority.
a.2) The residents that earn incomes from wages paid by overseas organizations and individuals shall directly declare tax quarterly at tax authorities.
b) The residents, groups of residents that earn incomes from business and directly declare tax at tax authorities include:
b.1) The business persons, groups of business persons that pay tax according to tax declarations are the business persons, groups of business persons that comply with legislation on accounting and invoicing and the business persons, groups of business persons that fail to separate expense from revenue and declare tax quarterly.
b.2) The business person, group of business persons that pay flat tax is the business person, group of business persons that do not comply with the legislation on accounting and invoicing and fail to determine revenue, expense, and taxable income shall declare tax annually.
b.3) The nomadic business persons shall declare personal income tax every time it is incurred.
b.4) The business persons that use invoices sold separately by tax authorities shall declare personal income tax every time revenue is earned.
b.5) The non-business persons that sell goods and services and need to issue invoices to their customers shall declare tax when it is incurred.
b.6) The person or group of persons that earns income from leasing out houses, rights to use land, water surface and other property shall declare tax quarterly or every time it is incurred.
c) The person that earns income from wages, business shall settle tax when tax is incurred or overpaid or offset against the next period, except for the cases below:
c.1) The person whose tax payable is tax smaller than the provisional tax paid does not apply for tax refund or offset it against tax the next period.
c.2) The person or business household has only one source of income from business and has paid flat tax.
c.3) The person or household only earns income from leasing out houses, rights to use land and has paid tax according to declaration in locality where such houses or land are situated.
c.4) The wage earner signs a labor contract for 03 months or more with a unit and earns an average monthly income of no more than 10 million VND from other places in the year, 10% tax on which has been withheld at source by the income payer; This income shall not be declared without the request of the person.
c.5) The wage earner signs a labor contract for 03 months or more with a unit, earns an average monthly income of no more than 20 million VND from leasing houses, rights to use land in the year, and has paid tax in the locality where such houses or land are situated. This income shall not be declared without the request of the person.
b.1) The wage earner shall request another organization or person to settle tax on their behalf in the following cases:
d.1) The person that only earns incomes from wages signs a labor contract for 03 months or more in a unit and is actually working at that unit when delegating the making of tax declaration, even he has not worked for 12 months in the year.
d.2) The wage earner signs a labor contract for 03 months or more and earns other incomes as guided in Point c.4 and Point c.5 Clause 2 of this Article.
dd) The income payer shall only settle tax on the income that they pay on the person’s behalf.
e) Rules for settling tax in some cases:
e.1) The resident that earns an income overseas and has pay personal income tax on that income overseas shall have the tax paid overseas deducted. The amount of tax deducted shall not exceed the tax payable on the income earned overseas according to Vietnam’s tax table. The ratio is based on the ratio of income earned overseas to the total taxable income.
e.2) The person earns incomes form wages and has been present in Vietnam in the first calendar year for fewer than 183 days, but has been present in Vietnam for 183 days or more within12 consecutive months from the date of arrival.
– In the first tax year: make and submit the tax settlement form by the 90^th day from the end of the 12 consecutive months.
– From the first tax year: make and submit the tax settlement form by the 90^th day from the end of the calendar year. The remaining tax payable in the second tax year is calculated as follows:

Where:

Example 17: Mr. S is a foreign who first comes to Vietnam and works under a labor contract from June 01, 2014 to May 31, 2016. In 2014, Mr. S has been present in Vietnam for 80 days and earned 134 million VND in wages. In 2015, Mr. S is present in Vietnam for 110 days during the period from January 01, 2015 until the end of May 31, 2015, and earns 106 million VND in wages. From June 01, 2015 to December 31, 2015, Mr. S has been in Vietnam for 105 days and earned 122 million VND in wages. Mr. S does not apply for deductions for dependants and does not pay insurance premiums or make charitable donations.
The personal income tax payable by Mr. S is calculated as follows:
+ in 2014, Mr. S is a non-resident, but for the period of 12 consecutive months from June 01, 2014 to the end of May 31, 2015, Mr. S has been present in Vietnam for totally 190 days (80 days + 110 days). Thus Mr. S is a resident in Vietnam.
+ In the first tax year from June 01, 2014 to May 31, 2015):
– Total taxable income in the first tax year:
134 million VND + 106 million VND = 240 million VND
– Personal deduction: 9 million VND x 12 = 108 million VND
– Assessable income: 240 million VND – 108 million VND = 132 million VND
– Personal income tax payable in the first tax year: 60 million VND × 5% + (120 million VND – 60 million VND) × 10% + (132 million VND – 120 million VND) × 15% = 10.8 million VND
+ In the second tax year (from January 01, 2015 to the end of December 31, 2015), Mr. S has been present in Vietnam for 215 days (110 days + 105 days) and is considered a resident in Vietnam.
– Taxable income earned in 2015:
106 million VND + 122 million VND = 228 million VND
– Personal deduction: 9 million VND x 12 = 108 million VND
– Assessable income in 2015:
228 million VND – 108 million VND = 120 million VND
– Personal income tax payable in the 2015:
(60 million VND × 5%) + (120 million VND – 60 million VND) × 10% = 9 million VND
+ When settling tax in 2015, tax is duplicated in 5 months (from January 2015 to May 2015)
– Deductible duplicated tax:
(10.8 million VND/12 months) x 5 months = 4.5 million VND.
– Personal income tax payable in the 2015:
9 million VND – 4.5 million VND = 4.5 million VND
e.3) The resident that is a foreigner terminates the labor contract in Vietnam and settles tax at the tax authority before departure.
e.4) The person that leases out houses, rights to use land, water surface and other property shall settle personal income tax, except for the cases in which tax settlement is exempt as guided in Point c.3 and Point c.5 Clause 2 of this Article. In particular:
e.4.1) The person that declares tax monthly or when it is incurred under a contract that is due within 01 year shall settle tax in the same way the persons that pay tax according to declarations do.
e.4.2) Where the person declares tax when it is incurred under a contract that is due after 01 year and receives a deposit for a lease period, the person shall settle tax in one of the following methods: if all tax is settled in the first year, the revenue is the lump-sum payment and personal deductions shall be made for a year, not the next; if tax is settled annually, the income from the lump-sum payment shall be provisionally declared and personal deductions shall be made for the first year, the revenue from leasing out property shall be redistributed in the next years and personal deductions shall be calculated when they arise.
e.5) The persons that earn incomes from the insurance agents, lottery agents, or network marketing shall directly settle tax at the tax authorities if required.
e.6) The persons that earns incomes from wages, business, and are eligible for tax reduction due to natural disasters, fire, accidents, fatal diseases shall directly settle tax at tax authorities.
e.7) The non-resident business persons, groups of business persons that have fixed business premises in Vietnam shall settle tax in the same way residents do.
3. Declaring tax on incomes form real estate transfer
a) The persons that earn incomes from real estate transfer shall declare tax when it is incurred, including the persons eligible for tax exemption. Declaring tax in some cases:
a.1) If the person puts up his rights to use land or house ownership as collateral loans or making payment at credit institutions, branches of foreign banks and fail to pay debts when they are due, the branches of foreign banks and credit institution shall liquidate, sell such real estate, declare and pay personal income tax on the person’s behalf before setting the person’s debts.
a.2) If the person mortgages his rights to use land or house ownership to take loans or make payment with other organizations or persons, then transfer the whole or part of such real estate to pay debts, the person that has the rights to use land or house ownership shall declare and pay personal income tax, or the organization/person doing the transfer procedure on the person’s behalf) shall declare and pay personal income tax on the person’s behalf before settling the debt.
a.3) Where a person transfers the real estate to another organization or person under a court’s decision, the transferor shall declare and pay personal income tax, or the organization/person holding the auction shall declare and pay personal income tax on behalf of the transferor. The real estate that is confiscated and put up for auction by competent authorities, personal income tax shall not be paid.
a.4) Every person that transfers land and houses that do not fall into the case in which agricultural land is converted to serve production, which is eligible for exemption of personal income tax as guided in Point dd Clause 1 Article 3 of this Circular, each person that transfers land and houses shall declare and pay personal income tax.
a.5) If an organization/person declares personal income tax on real estate transfer on behalf of another person, such organization/person shall state “On behalf of the taxpayer or the taxpayer’s legal representative”, sign, write the full name, and append the organization’s seal (if any). The taxpayer in the tax return and tax receipts is still the person that transfers real estate.
b) Real estate authority shall only initiate the procedure for transferring the ownership, rights to use real estate after the personal income tax invoices are presented, or the tax authority certifies that the incomes from real estate transfer is eligible for tax exemption or deferred tax collection.
4. Declaring tax on incomes from capital transfer (except for securities transfer)
a) The person that transfer contributed capital shall make declare tax when a transfer is made, whether or not incomes are earned.
b) The person that earns incomes from transferring contributed capital shall not directly declare tax at the tax authority. The transferee shall withhold tax as guided in Point e Clause 1 Article 25 of this Circular and declare tax when it is incurred.
c) If the company changes the list of capital contributors when transferring capital without documents proving that the capital transferor has fulfilled the tax obligations, the transferee company shall declare and pay tax on the person’s behalf.
The transferee company that pays tax on the person’s behalf shall also declare personal income tax on the person’s behalf. Such company shall state “On behalf of the taxpayer or the taxpayer’s legal representative”, sign, write the full name, and append the company’s seal (if any). The taxpayer on the tax return and tax receipts is the transferor (when transferring a resident’s capital) or the transferee (when transferring a non-resident’s capital).
5. Declaring tax on incomes from transferring securities
a) The person that transfers securities of a public company at the Stock Exchange shall not declare tax directly at the tax authority. The account owner, commercial bank where the person opens his depository account, the asset management company where the person entrusts the management of the investment portfolio shall declare tax as guided in Clause 1 Article 26 of this Circular.
b) Where the person transfers securities without the transaction system of the Stock Exchange:
b.1) The person that transfers securities of a public company registered at the Vietnam Securities Depository shall not declare tax directly at the tax authority. The securities company, commercial bank where the person opens his depository account shall withhold tax and declare tax as guided in Clause 1 Article 26 of this Circular.
b.2) The person that transfers securities of a joint-stock company that is not public company that authorizes a securities company to shareholder list shall not declare tax directly at the tax authority. The authorized securities company shall withhold tax and declare tax as guided in Clause 1 Article 26 of this Circular.
c) The persons transferring securities that do not fall into the cases in Point a, Point b Clause 5 of this Article shall declare tax when it is incurred.
d) If the company changes the list of shareholder when transferring securities without documents proving that the securities transferor has fulfilled tax obligations, the transferee company shall declare and pay tax on the transferor’s behalf.
If transferee company that declares tax on the transferor’s behalf, the transferor company shall also declare personal income tax on the person’s behalf. Such company shall state “On behalf of the taxpayer or the taxpayer’s legal representative”, sign, write the full name, and append the company’s seal (if any). The taxpayer in the tax return and tax receipts is the securities transferor.
dd) The securities transferor shall directly settle tax at the tax authority at the year’s end if he wishes to settle tax.
6. Declaring tax on incomes from inheritance and gifts
a) The persons that earn incomes from inheritance or gifts shall declare tax when it is incurred, including the persons eligible for tax exemption.
b) Relevant state agencies and organization shall only initiate the procedure for transferring the ownership or rights to use real estate, securities, contributed capital, and other assets, the ownership or right to use of which must be registered, to the inheritor or recipient after having the tax receipt or certification that the incomes from inheritance or gifts being real estate are tax-free.
7. Declaring tax on overseas incomes earned by residents
The resident that earns incomes overseas shall declare tax when it is incurred. The resident that earns incomes for wages overseas shall declare tax quarterly.
8. Declaring tax on overseas incomes earned in Vietnam but received overseas by non-residents
a) The non-resident that earns incomes in Vietnam but receives them overseas shall declare tax when it is incurred. The non-resident that earns incomes from wages in Vietnam but receives them overseas shall declare tax quarterly.
b) The non-resident that earns incomes from real estate transfer, capital transfer (including securities transfer) in Vietnam but receives them overseas shall declare tax when it is incurred as guided in Clause 3, Clause 4 and Clause 5 of this Article.
9. Declaring tax on incomes from capital investment when receiving shares as dividends or reinvested profit.
The person that receives shares as dividends or reinvests profit might not declare and pay tax upon receipt. When transferring capital, withdrawing capital, or dissolving the enterprise, the person shall declare and pay tax on the incomes from capital transfer and capital investment.
10. Declaring tax on incomes from transferring capital, securities, real estate when making contributions using another capital contribution, securities, or real estate.
The person that making contributions using another capital contribution, securities, or real estate might not declare and pay tax when making the contribution. When transferring capital, withdrawing capital, or dissolving the enterprise, the person shall declare and pay tax on the incomes from transferring capital, real estate when making contributions and transferring.
11. Declaring tax on incomes from bonus shares
The person might not pay tax on wages when receiving bonus shares from the employer. The person shall declare tax on the incomes from transferring shares and wages when transferring bonus shares.
Article 27. Responsibilities of Vietnamese organizations that sign service contracts with foreign contractors that do not operate in Vietnam
When an organization established and operated within Vietnam’s law (hereinafter referred to as Vietnamese party) signs a contract to purchase services of a foreign contractors that signs labor contracts with foreign workers in Vietnam, the Vietnam party shall notify the foreign contractor of the obligations to pay personal income tax incurred by the foreign workers, the obligations to provide information about the foreign workers, including their names, nationalities, passport numbers, working duration, positions, and incomes for the Vietnam party. The Vietnam party shall provide such information for the tax authority at least 07 days before the foreign worker starts to work in Vietnam.
Article 28. Tax refund
1. The refund of personal income tax applies to the persons that have registered and obtain tax codes when they submit the tax settlement form.
2. If the person that has delegated the income payer to settle tax, tax refund shall be made via the income payer. The income payer shall offset the overpaid and underpaid tax. After offsetting, the overpaid tax shall be offset against the tax in the next period or refunded on request.
3. The person that declares tax directly may choose to claim a tax refund or offset it against the tax in the next period at the same tax authority.
4. Person eligible for the refund of personal income tax that submits the tax settlement behind schedule is exempt from fines for overdue tax declaration.
Chapter 5.

IMPLEMENTATION

Article 29. Effects
1. This Circular takes effect on October 01, 2013.
The regulations on personal income tax in the Law on the amendments to the Law on Personal income tax, and the Decree No. 65/2013/NĐ-CP from the effective date of the Law and Decree (July 01, 2013).
The guidance on personal income tax in the Circular No. 84/2008/TT-BTC dated September 30, 2008, Circular No. 10/2009/TT-BTC dated January 21, 2009, Circular No. 42/2009/TT-BTC dated March 09, 2009, Circular No. 62/2009/TT-BTC dated March 27, 2009, Circular No. 161/2009/TT-BTC dated August 12, 2009, Circular No. 164/2009/TT-BTC dated August 13, 2009, Circular No.02/2010/TT-BTC dated January 11, 2010, Circular No. 12/2011/TT-BTC dated January 26, 2011, Circular No. 78/2011/TT-BTC dated June 08, 2011, Circular No. 113/2011/TT-BTC dated August 04, 2011 of the Ministry of Finance are abolished.
2. The guidance on personal income tax that are provided by the Ministry of Finance before this Circular takes effect and at odds with the guidance in this Circular are abolished.
Article 30. Responsibility to implement
1. The Law on Tax administration and its guiding documents shall apply to other contents related to tax administration that are not guided in this Circular.
2. The issues and difficulties pertaining to personal income tax that arise before January 01, 2013 shall comply with the effective guiding documents at that time.
3. The application of taxable income rate to the business persons guided in Article 8 of this Circular shall be implemented from January 1, 2014.
4. For the contracts to sell floors, contribute capital to obtain the right to buy floors, houses, and apartments that are signed before the effective date of the Government’s Decree No. 71/2010/NĐ-CP dated June 23, 2010 elaborating and providing guidance on the implementation of the Law on Housing, and allowed to be transferred by the investors, tax shall be declared and paid similarly to transferring future houses.
5. If the person receives a land before January 01, 2009, applies for and issued with the certificate of rights to use land, ownership of houses and other property on land, only the personal income tax on the last transferred is paid. The tax on the previous transferred shall not be collected.
From January 01, 2009 when the Law on Personal income tax takes effect, the person that transfers real estate under a notarized contract or handwritten agreement shall pay personal income tax on the each transfer.
6. The persons eligible for personal income tax incentives before the Law on the amendments to the Law on Personal income tax takes effect are still eligible for such incentives for the remaining period.
7. When Socialist Republic of Vietnam signs International Agreements of which the regulations are different from this Circular, such the regulations of such International Agreements shall apply.
Organizations and individuals are recommended to report the difficulties that arise during the implementation to the Ministry of Finance (the General Department of Taxation) for consideration and settlement./.
 

 
Appendix 01/PL-TNCN
 (promulgated together with the Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance)
CALCULATIN TAX ON WAGES AND BUSINESS ACCORDING TO THE PROGRESSIVE TAX TABLE
The progressive method for calculating tax is abridged as follows:

 
Appendix 02/PL-TNCN
 (promulgated together with the Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance)
CONVERSION OF TAX-EXCLUSIVE INCOMES TO ASSESSABLE INCOMES (FROM WAGES)

The post Circular 111/2013/TT-BTC IMPLEMENTATION GUIDE PERSONAL INCOME TAX LAW, LAW AMENDMENTS AND SUPPLEMENTS appeared first on MP Law Firm.

THE GOVERNMENT
——-

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
—————

No. 83/2013/NĐ-CP

Hanoi, July 22, 2013

DECREE

ON THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE LAW ON TAX ADMINISTRATION AND THE LAW ON AMENDMENTS TO THE LAW ON TAX ADMINISTRATION

Pursuant to the Law on Government organization dated December 25, 2001;
Pursuant to the Law on Tax administration dated November 29, 2006;
Pursuant to the Law No. 21/2012/QH13 dated November 20, 2012 on the amendments to the Law on Tax administration dated November 20, 2012;
At the request of the Minister of Finance;
The Government issues a Decree on the implementation of a number of articles of the Law on Tax administration and the Law on amendments to the Law on Tax administration,
Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of regulation
This Decree elaborates the implementation of a number of articles of the Law on Tax administration and the Law on amendments to the Law on Tax administration, applicable to the management of taxes, fees, land rent, water surface rent, land levy; revenues from resource extraction, and other revenues classified as government revenues collected by tax authorities in accordance with law.
Article 2. Taxpayers
Taxpayers in this Decree include:
1. Organizations, households, and individuals that pay tax, fees, and other revenues classified as government revenues managed and collected by tax authorities in accordance with law.
2. The organizations assigned to collect fees classified as government revenues.
3. The organizations and individuals that deduct tax; the organizations and individuals that follow taxation procedures on behalf of taxpayers, including:
a) Vietnamese organizations and individuals that sign contracts with foreign organizations and individuals doing business in Vietnam that do not follow Vietnam’s laws on investment and accounting regime;
b) The organizations and individuals that deduct tax when paying the people whose incomes incur personal income tax;
c) Shipping agencies and agents of foreign shipping lines that deduct corporate income tax on transportation of goods by ship from Vietnam’s ports to abroad or among Vietnam’s ports;
d) Providers of taxation services;
dd) Customs brokerage agents for exported and imported goods;
e) Organizations and individuals that provide postal services and express mail services to serve the payment of tax on behalf of the taxed organizations and individuals;
g) The credit institutions that guarantee tax payment of taxed organizations and individuals in accordance with the Law on credit institutions.
Article 3. Delegating tax collection
1. Tax authorities shall delegate other organizations and individuals to collect some taxes decided by the Ministry of Finance.
2. The delegation of tax collection must be made into a contract between the head of the tax authority and the delegated organization or individual, except for some cases in which the revenues are not regular as defined by the Ministry of Finance.
3. The party delegated to collect tax shall notify and urge the taxpayer to pay tax in accordance with the delegation contract, issue receipts to taxpayers when collecting tax, remit the tax collected to accounts of the tax authority at State Treasuries; report the amount of collected tax and issued receipts to the tax authority; send reports to the tax authority on new taxpayers or changes in the business lines or business scale of the local taxpayers.
4. The tax authority shall announce the delegation of tax collection for taxpayers to know, provide receipts, provide guidance, instruct and supervise the tax collection of the organizations and individuals delegated to collect tax.
5. The organizations and individuals delegated to collect shall be provided with funding deducted from the budget of the tax authority. The Ministry of Finance shall provide guidance on the deduction and use of funding mentioned in this Clause.
Article 4. Application of risk management to tax administration
1. Application of risk management to tax administration of tax authorities
a) The Ministry of Finance shall;
– Issue regulations on risk management for taxation to raise the efficiency of tax administration and prevent violations legislation on taxation;
– Establish risk assessment criteria that meet the tax administration demand in each period.
b) Tax authorities shall;
– Use information about taxpayers to build a database serving risk management for taxation;
– Manage, apply information technology, information systems, and the database about taxpayers to assessment of risk to tax administration; assess the conformity with law of taxpayers to serve tax administration, identify and select subjects of tax inspection in accordance with law.
2. Application of risk management to tax administration of the customs
a) The Ministry of Finance shall:
– Issue regulations on risk management for customs;
– Establish risk assessment criteria that meet the tax administration demand in each period. Assess the conformity with law of taxpayers;
b) The General Department of Customs shall develop, manage and apply concentrated information systems related to taxpayer to serve risk assessment and:
– Inspect the conditions for registering tax declarations;
– Decide method of inspecting tax declarations;
– Decide the method and level of inspection of exported and imported goods;
– Identify and select subjects of post-customs clearance inspections and tax inspections in accordance with law;
– Assess the conformity with law of taxpayers.
c) The customs authorities shall adhere with regulations on risk management, criteria for assessing risk and conformity with law of taxpayers.
Chapter 2.

SPECIFIC PROVISIONS

Article 5. Principles of calculating, declaring, and paying tax
1. Taxpayers shall calculate the tax payable to the state budget, except for the cases in which tax authorities impose or calculate tax (in Article 37, Article 38, and Article 39 of the Law on Tax administration).
2. Taxpayers must provide accurate and truthful information in the tax form, submit all documents specified in the tax declaration to tax authorities.
If the taxpayer finds that the tax declaration submitted to the tax authority is incorrect after the deadline for submitting the tax declaration, the taxpayer may make adjust the tax declaration. The adjusted tax declaration may be submitted to the tax authority on any working days, regardless of the deadline for submitting the next tax declaration, but before the tax authority or competent authority announces the decision on tax inspection.
When the tax authority or a competent authority makes a conclusion or a decision on post-inspection actions, if the taxpayer finds that the tax declaration that was submitted and inspected is still incorrect, the taxpayer may make adjustments; the actions shall depend on the regulations, the objective and subjective reasons of the errors that need adjusting.
3. If the tax is calculated by the taxpayer, the amount of tax calculated must be paid by the deadline for submitting the tax declaration specified in Article 32 and Article 33 of the Law on Tax administration, Clause 9 and Clause 10 of Article 1 of the Law on the amendments to the Law on Tax administration.
4. If the tax is calculated or imposed by the tax authority, the deadline for tax payment is the deadline written on the tax notification or decision of tax collection made by the tax authority.
5. If the taxpayer suspends the business and send a written request the tax authority, the taxpayer may not submit the tax declaration during the suspension period. If the taxpayer resumes the business ahead of schedule, a written notification and tax declaration shall be submitted to the tax authority.
6. The advance pricing agreements (APRIL) shall be made on the basis of independent transactions which reflect market prices in accordance with Vietnam’s law and agreements on double taxations and tax avoidance to which Vietnam is a signatory.
The General Department of Taxation shall decide to enter into APA based on requests of taxpayers or foreign tax authorities.
Article 6. Advance determination of classifications, customs values, and advance certification of origins of exported goods and imported goods
1. Before following customs procedures, organizations and individuals shall provide relevant information and documents to the provincial Customs Department, and submit an application for advance determination of classifications, custom values or advance certification of origins of the goods intended to be exported or imported (hereinafter referred to as advance determination).
Within 05 working days from the day on which the sufficient documents are received, the Customs Departments shall request the Director of the General Department of Customs in writing to consider the application for advance determination.
2. Pursuant to law, the database of the customs authority, and the documents provided by the organization or individual, the Director of the General Department of Customs shall send a written notice of the advance determination within 25 working days from the day on which sufficient documents are received, and announce it on the website of the General Department of Customs.
For the complicated goods that need analyzing, and verifying before the advance determination, the deadline may be extended but shall not exceed 90 days from the day on which sufficient documents are received. If the verification is carried out by a competent authority overseas, the deadline shall depend on the agreement with the competent authority overseas.
If the information and basis for advance determination is not sufficient, the Director of the General Department of Customs shall request additional documents or information in writing within 05 working days from the day on which the documents sent by the provincial Customs Department is received.
3. The notice of advance determination is valid for no more than 03 years and is used for making customs declaration when the exported goods and imported goods are consistent with the information or documents provided.
If the information, documents and basis for advance determination are not changed after 03 years, the General Department of Customs shall consider extending the advance determination at the request of the organization or individual.
4. If the notice of advance determination is found unconformable, the Director of the General Department of Customs shall make an adjustment or replacement.
5. The notice advance determination shall be invalidated when the laws being the basis for the advance determination are changed. The invalidation begins from the effective date of the changed laws being the basis for the advance determination.
6. The notice of advance determination is not effective if the goods or the actual export/import documents are inconsistent with the goods or the documents that request the advance determination.
Article 7. Giving incentives during tax administration of exported and imported goods.
1. Any taxpayer that meets the criteria below shall be given incentives in tax administration:
a) No tax fraud, tax avoidance, smuggling, illegal transportation of goods across the border is discovered by tax authorities and customs authorities over the previous 2 years from the day on which the General Department of Customs receives the application for incentives from the taxpayer;
b) The payment for shipments of exported goods and imported goods are made by bank transfer;
c) The taxpayer follows electronic customs procedures and electronic taxation procedures;
d) No violations against legislation on accounting are found by competent authorities over the previous 2 years;
dd) The annual target of export or import turnover or investment scale set by the Ministry of Finance is met.
2. The taxpayers that meet the criteria in Clause 1 of this Article and have the enterprises recognized as privileged enterprises are eligible for “refund first, inspect later” regime.
3. Privileged enterprises of the countries that sign mutual recognition agreements on privileged enterprises with Vietnam are eligible for the incentives in accordance with the signed agreements.
4. Suspending and terminating incentives:
a) The enterprises recognized as privileged enterprises shall have the incentives suspended or terminated if any of the criteria mentioned in Points a, b, c and d Clause 1 of this Article is not met.
b) Incentives shall be terminated when:
– The enterprise fails to meet the criteria after the suspension period in Point a of this Clause is over;
– The enterprise makes a written request for the revocation of incentives;
– The enterprise does not apply for an extension after the incentive period is over.
5. The deadline and power for recognizing, extending, suspending, terminating, and managing privileged enterprises:
a) The duration of the first provision of incentives is 3 years;
b) The duration of extension is 3 – 5 years;
c) The incentive suspension period is 2 – 6 months;
d) The Director of the General Department of Customs shall decide the recognition, suspension, termination, and management of privileged enterprises.
Article 8. Adjusting tax registration information
1. When changing information in the application for tax registration submitted, the taxpayer shall notify the tax authority (written on the tax registration certificate, Certificate of Business registration, or Certificate of Enterprise registration) within 10 working days from the day on which the information is changed.
If the taxpayer has applied for tax registration but has not notified the tax authority of the accounts opened at commercial bank and credit institutions before this Decree takes effect, such accounts must be notified by December 31, 2013.
During the operation, if the account numbers are changed, the taxpayer shall report such changes to the tax authority in the quarterly preliminary corporate income tax form.
2. If the change in location of the head office of the taxpayer leads to the change in the tax authority in another central-affiliated city or province (hereinafter referred to as province), the taxpayer is responsible for settled the unpaid tax, request the refund of overpaid tax (minus personal income tax), and residual VAT after deduction, which is refundable (or request the tax authority to certify the residual VAT after deduction as the basis for the new tax authority to monitor) before moving, and is exempt from making the finalized tax declaration, unless the relocation takes place when annual finalized tax declaration is made. The overpaid personal income tax shall be offset against the tax payable at the new tax authority.
3. When the information in the tax registration certificate is changed, the tax authority shall withdraw the tax registration certificate and issue a new tax registration certificate to the taxpayer.
4. Where the application for tax registration follows the single-window procedure, the adjustment or additional registration shall also follow such procedure.
Article 9. Tax declaration
1. The tax declaration includes the tax forms
2. The tax forms must specify:
a) The type and code of the tax form;
b) The tax period or the time tax liability arises;
c) Information about the taxpayer: name, tax code, business address;
d) Information for calculating tax payable;
dd) The signature of the taxpayer or the legal representative of the taxpayer;
If the taxpayer makes tax declaration via a tax agent, the tax form must specify the name, tax code, business address of the tax agent; the agent contract; employees of the tax agent, and signatures of employees of the tax agent.
3. The electronic tax declaration shall comply with legislation on electronic customs procedures and electronic taxation procedures.
Article 10. Additional tax declaration
1. The additional tax declaration contains:
a) The tax form and relevant documents;
b) The explanation for the adjustment.
2. The deadline for submitting the additional tax declaration is specified in Article 34 of the Law on Tax administration and Clause 2 Article 5 of this Decree.
Article 11. Declaring VAT
1. VAT declarations (except for VAT on exported goods and imported goods) shall be made as follows:
a) VAT declarations shall be made monthly, except for the cases in which taxpayers make quarterly declarations, ad hoc declarations, or presumptive declaration;
b) Declarations shall be made quarterly by the taxpayers whose revenue in the previous year is 20 billion VND or lower:
– If the business has just begun, VAT declarations shall be made monthly. After 12 months, VAT declarations shall be made every month or every quarter depending on the revenue from sale of the previous year.
– Quarterly tax declarations shall be made steadily for 3 calendar years, from the effective date of this Decree until the end of 2016;
– The taxpayers who make quarterly tax declarations shall notify the tax authority if they wish to make monthly tax declarations. The monthly or quarterly tax declarations shall be made steadily for the whole calendar year.
c) Ad hoc declarations shall be made when selling the goods and services that are built, installed, or sold by taxpayers in other provinces than the province where the head office is located without establishing a subsidiary (hereinafter referred to as inter-provincial business); if tax liabilities are incurred many times in a month, the taxpayer may register at the tax authority for making monthly VAT declarations.
2. VAT declaration:
a) A monthly or quarterly VAT declaration contains:
– The VAT form;
– The manifest of sale invoices;
– The manifest of purchase invoices;
– Other documents related to the amount of tax payable.
b) The ad hoc VAT declaration is the ad hoc VAT form.
Article 12. Declaring corporate income tax
1. Declarations of corporate income tax shall be made in the form of:
a) Preliminary quarterly declarations;
b) Ad hoc declarations of corporate income tax on real estate transfer and other operations defined by legislation on corporate income tax;
c) Quarterly declarations shall be made by public service providers;
d) Annual finalized declarations or declarations shall be made when the enterprise undergoes division, splitting, consolidation, merger, conversion, dissolution, or shutdown.
2. Corporate income tax declaration:
a) Preliminary corporate income tax declaration is the quarterly preliminary corporate income tax form;
b) The declaration of corporate income tax on real estate transfer consists of the tax form reporting the income from real estate transfer and relevant documents.
c) Preliminary corporate income tax declaration is the quarterly corporate income tax form;
d) The finalized corporate income tax declaration consists of:
– The finalized corporate income tax form;
– The annual financial statement or financial statement made when the enterprise undergoes division, splitting, consolidation, merger, conversion, dissolution, or shutdown.
– Other documents related to finalized tax declaration.
dd) Ad hoc corporate income tax declaration is the ad hoc corporate income tax form.
Article 13. Declaring excise duty
1. Excise duty on goods and services shall be made monthly (except for declaration of excise duty on imported goods). Ad hoc declarations of excise duty shall be made when the goods that are purchased to export are eventually sold domestically.
2. The excise duty declaration:
a) A monthly excise duty declaration consists of:
– A tax form reporting the monthly excise duty;
– The manifest of invoices of the sale of goods and services on which excise duty is levied;
– The manifest of deductible excise duty ((if any).
b) The ad hoc declaration of excise duty on the goods that are purchased to export but eventually sold domestically is the tax form reporting the excise duty.
Article 14. Declaring tax on exported goods and imported goods
1. Declarations of exported goods and imported goods in this Article include: declarations of VAT, excise duty, export duties, import duties, environment protection tax.
2. The declaration of tax on exported goods and imported goods shall be made when tax is incurred.
If one customs declaration is registered for multiple exports or imports, tax declarations shall be made when following customs procedures for exporting or importing.
3. For exported goods and imported goods exempt from export duties, import duties, excise duties, VAT, environmental protection tax, or are exempt from tax, or are eligible for preferential tax rates, incentives, but then the subjects or purposes of tax exemption of incentives are changed, the taxpayer shall comply with legislation on such changes, notify the customs authority where the shipments are registered to make a new customs declaration that matches the changes.
When the imported goods for forming fixed assets of preferential projects, which are eligible for preferential import duties in certain fields or localities, are transferred to another person who keeps executing the projects in the privileged locality or field, the tax incentives are still provided in accordance with the laws. The transferee shall not declare and pay import duties.
4. The declaration of tax on exported goods and imported goods is the customs dossier.
5. Additional tax declarations shall be made in accordance with regulations of the Ministry of Finance.
Article 15. Declaring severance tax (except for severance tax on crude oil and natural gas)
1. Declarations of severance tax shall be made in the form of:
a) Monthly declarations shall be made by organizations and individuals that extract resources, except for the cases in Point b of this Clause and the cases in which presumptive tax declarations are made;
b) Ad hoc declarations shall be made when the resource buyer pays tax on behalf of the extractor, or when selling the confiscated natural resources, on which severance tax is levied. If resources are purchased many times in a month, the delegated taxpayer may make monthly tax declarations.
c) Finalized declarations shall be made annually or when the resource extraction is finished, or the enterprise is converted, restructured, or shut down.
2. Severance tax declaration:
a) The monthly or ad hoc severance tax declaration consists of the severance tax form and the manifest of resource purchases;
b) The finalized severance tax declaration consists of the finalized severance tax form and relevant documents.
Article 16. Declaring environmental protection tax
1. Environmental protection tax declarations shall be made as follows:
a) Declarations of environmental protection tax on imported goods, on which environmental protection tax is levied (except for gasoline and grease imported by oil wholesalers), shall be made in accordance with Article 14 of this Article;
b) Declarations of environmental protection tax on the goods (or packages used for prepacking goods) that are produced, sold, exchanged, internally used, or donated shall be made monthly.
2. Environmental protection tax declaration:
a) The declarations of environmental protection tax on imported goods (except for imported gasoline and grease of oil wholesalers) shall be made in accordance with Clause 4 Article 14 of this Decree;
b) The declaration of environmental protection tax on goods (or packages used for prepacking good) that are produced, sold, exchanged, internally used, or donated, oil or gas of oil wholesalers is the environmental protection tax form. Oil wholesalers shall declare tax on the oil and gas exported or sold in the locality where VAT declarations are made.
Article 17. Declaring personal income tax
1. Declarations of personal income tax include monthly declarations, quarterly declarations, annual declarations, and ad hoc declarations.
2. The monthly, quarterly, annual, and ad hoc declarations of personal income tax shall be made under legislation on personal income tax.
The tax declaration is the personal income tax form and relevant documents.
3. Finalized personal income tax declarations shall be made under legislation on personal income tax.
a) The finalized tax declaration made by the wage payer is the finalized tax form and relevant documents.
a) The finalized tax declarations made by the income earner is the finalized tax form and relevant documents of the individual.
4. The Ministry of Finance shall provide guidance on making tax declarations and finalized tax declarations.
Article 18. Declaring license tax
1. License tax declarations shall be made as follows:
a) License tax declaration shall be made once on not later than the last day of the month in which the operation is commenced. If the business is not commenced though the business establishment has been established, the license tax declaration must be made within 30 days from the day on which the Certificate of business registration and tax registration or the Certificate of Enterprise registration is issued;
b) License tax declaration shall be made in the year if the amount of license tax payable is changed.
2. The license tax declaration is the license tax form.
Article 19. Declaring tax and government revenues from land
1. The declarations of revenues from land shall be made in the form of:
a) Annual declarations, applicable to:
– Tax on non-agricultural land;
– Tax on agricultural land;
– Land rent and water surface rent paid by renters annually.
b) Ad hoc declarations, applicable to;
– Land levies;
– Lump sum payments of land rent and water surface rent paid by renters.
2. Declarations of tax and revenues from land classified as government revenues:
a) The declaration of tax on non-agricultural land is the tax form reporting taxes on non-agricultural land and relevant papers;
b) The declaration of tax on agricultural land is the tax form reporting taxes on agricultural land;
c) The declaration of land rent or water surface rent consists of:
– The declaration sheet of land rent or water surface rent;
– The papers related to the State leasing land or water surface;
– The paper proving the eligibility for exemption or reduction of land rent or water surface rent (if any);
– papers related to compensation and support (if any).
d) The declaration of land levies consists of:
– The declaration sheet of land levy;
– The papers related to the land location or permission for changing land purposes;
– paper proving the eligibility for exemption or reduction of land rent or water surface rent (if any);
– papers related to compensation and support (if any).
Article 20. Declaring fees, charges, and other government revenues
1. Declarations of fees, charges, and other government revenues shall be made in the form of:
a) Monthly declarations, applicable to fees and charges, except for the cases in Point b of this Clause;
b) Ad hoc declarations, applicable to registration fee;
c) Annual finalized declarations or declarations when shutting down, applicable to the cases in Point a of this Clause;
d) Declarations of customs fees shall comply with regulations of the Ministry of Finance.
2. The declaration of fees, charges and other revenues classified as government revenues in Clause 1 of this Article are the declaration sheet or finalized declaration sheet of fees, charges, other revenues classified and government revenues, and relevant papers.
Article 21. Declaring VAT, corporate income tax (or personal income tax) incurred by foreign organizations and individuals that do business in Vietnam or earn incomes in Vietnam (hereinafter referred to as foreign contractors); declaring taxes related to the application international agreements on taxation and other international agreements.
1. Tax declarations made by foreign contractors that pay VAT by directly calculating VAT, or that pay corporate income tax based on percentage of revenue (or personal income tax)
a) Tax declarations made by foreign contractors being foreign organizations:
– Ad hoc declarations of VAT or corporate income tax. If tax liabilities are incurred many times in a month, the taxpayer may register at the tax authority for making monthly or quarterly tax declarations;
– Finalized tax declarations when contracts are finished.
b) Tax declarations made by foreign contractors being foreign individuals:
Declarations of VAT in accordance with this Article; declarations of personal income tax in accordance with Article 17 of this Article.
c) Tax declarations made by foreign contractors:
– A tax declaration consists of:
+ The tax form made by the foreign contractor;
+ Photocopies of contracts, sub-contracts, and their summaries in Vietnamese related to the tax declared (for the first tax declaration of the contract).
– The finalized tax declaration consists of:
+ The finalized tax form made by the foreign contractor;
+ The list of contractors and sub-contractors engaged in the execution of the contract;
+ The list of tax payment receipts;
+ The note of contract finalization (if any).
2. Declaration of taxes that related to the application of international agreements on taxation and other international agreements.
The applications for exemption or reduction of tax on goods and services eligible for tax exemption or reduction according to International Agreements, to which Vietnam is a signatory, shall be submitted together with the tax declaration.
The Ministry of Finance shall specify the procedures for tax exemption and reduction in accordance with International Agreements. The relevant state agencies are responsible for certifying the goods and services eligible for tax exemption or reduction according to the International Agreements they signed.
Article 22. Declaring severance tax and corporate income tax on the extraction and export of crude oil (including condensate) and natural gas (including associated gas, coal gas); declaring VAT, corporate income tax, and severance tax on hydropower generation:
1. For the extraction and export of crude oil and natural gas
a) Declarations of tax on extraction and export of crude oil and natural gas shall be made in the form of:
– Declarations of severance tax and corporate income tax on every export of crude oil;
– Monthly declarations of severance tax on natural gas;
– Monthly or quarterly declarations of corporate income tax on natural gas;
– Finalized declarations of severance tax or corporate income tax on crude oil and natural gas made annually or when the petroleum extraction contract is finished or terminated.
b) Tax declaration
– The declaration of severance tax and corporate income tax on crude oil and natural gas is the preliminary tax form;
– The finalized declarations of severance tax or corporate income tax on crude oil and natural gas is the finalized tax form reporting severance tax or corporate income tax, the manifests and documents related to the tax payable.
c) The Ministry of Finance shall decide the declaration and payment of tax on the extraction and export of crude oil and natural gas in accordance with the transactions and payment for exported crude oil or natural gas.
2. For hydropower generation:
a) Declarations and payment of VAT: the hydroelectric power producer shall make VAT declarations in the locality where its head office is situated and pay VAT to the State Treasury where the hydroelectric power plant (turbines, hydroelectric dams, and essential infrastructures of the hydroelectric plant) is situated. If the hydroelectric power plants are located in multiple provinces, the VAT paid by the hydroelectricity producer to provincial budget shall be proportional to its investments in such provinces.
b) Declaring and paying corporate income tax: If an independent hydroelectric power company has affiliated hydroelectric power producers in other provinces that the province where the head office of the hydroelectric power company is situated, the corporate income tax shall be calculated and paid in the provinces where the head office and the affiliated hydroelectric power producers are situated in accordance with the Law on Corporate income tax; the affiliated hydroelectric power producers and electricity corporations affiliated to EVN (including affiliated hydroelectric power companies and affiliated hydroelectric power plants) in other provinces that the province where the head offices of EVN and electricity corporations are situated, the corporate income tax shall be calculated and paid in the provinces where such head offices and the affiliated hydroelectric power producers are situated under legislation on corporate income tax. If the hydroelectric power plants are located in multiple provinces, the corporate income tax paid by such hydroelectric power plants to the provincial budget is proportional to the investment in such provinces;
c) Declaring and paying severance tax: hydroelectric power producers shall declare and pay severance tax in the locality where tax is registered. If severance tax incurred by the hydroelectric power producer is distributed to various localities, the hydroelectric power producer shall submit the declaration of severance tax to the local tax authority where tax declaration is registered (or where the head office is situated) and send the photocopy of the severance tax declaration to the tax authority of the province where the severance tax is levied, and pay severance tax to the provincial budgets based on the areas of hydroelectric reservoirs, the compensation for land clearance, resettlement, the number of households being resettled, and the compensation for damage to the reservoir;
d) The sources on which VAT, corporate income tax, and severance tax are levied in Point a, b, c, are applicable to the hydroelectric power plants that commence their operation from the effective date of the Government’s Decree No. 106/2010/NĐ-CP dated October 28, 2010. The Ministry of Finance shall provide guidance on the declaring and paying tax on hydropower generation.
Article 23. Declaring presumptive tax
1. Annual tax declarations shall be made by business household and business individuals that pay presumptive taxes on their regular operation.
2. Business individuals and business households that pay presumptive taxes shall make declarations and pay VAT, excise duty, severance tax, environmental protection tax, and personal income tax. If the business household or individual that pay presumptive taxes earns revenues, which do not incur VAT according to the Law on Value-added tax, and earns incomes, which do not incur personal income tax according to the Law on Personal income tax, the VAT and personal income tax shall not be paid.
Tax authorities shall post the list of business households and individuals exempted from paying presumptive taxes and the amount of tax payable by business households and individuals that pay presumptive taxes on the websites of tax authorities.
The Ministry of Finance shall specify the announcement of tax payable to the state budget by business households and individuals as prescribed in this Article.
Article 24. Deadlines for submitting tax declarations
1. The deadlines for submitting tax declarations are specified in Article 32 and Article 33 of the Law on Tax administration, Clause 9 and Clause 10 Article 1 of the Law on the amendments to the Law on Tax administration.
2. The deadline for submitting the declaration of registration fee is the day on which the taxpayer registers the right to ownership or enjoyment of property with competent authorities.
3. The deadline for submitting the declaration of tax on the lump sum payment of land rent or land levy is the 30^th day from the day on which the decision to allocate land or to lease out land is made.
4. The deadline for submitting the declaration of tax and government revenues related to land:
a) The deadline for the first declaration is the 30^th day from the day on which the liability to the state budget is incurred;
b) If the taxpayer or the amount payable is changed, the additional declaration must be submitted within 30 days from the day on which the change happens.
c) The declaration of tax on non-agricultural land is March 31 of the next calendar year.
5. The deadlines for submitting the declaration of tax on exported goods and imported goods are specified by legislation on customs.
Article 25. Places where tax declarations are received
1. Taxpayers shall submit declarations of tax, fees and charges, and other government revenues at the tax authority, except for the cases in Clause 2, Clause 3, Clause 4, and Clause 5 of this Article.
2. The declarations of tax on non-agricultural land, agricultural land, declarations of registration fee, VAT on inter-provincial business, and presumptive tax declarations shall be submitted at local sub-departments of taxations where such taxes are incurred.
3. The declarations of severance tax on resource extraction and corporate income tax on real estate transfers, which takes place in the same province where the head office of the taxpayer is situated, shall be submitted at the local tax authority (Department of Taxation or Sub-department of taxation). If the head office of the taxpayer is located in another province than the province where the resource extraction or real estate transfer takes place, the tax declaration shall be submitted at the tax authority (Department of Taxation or Sub-department of taxation) where the resource extraction or real estate transfer takes place.
The places where declarations of severance tax on extraction of crude oil and natural gas shall be specified by the Ministry of Finance.
4. The taxpayers that have their goods, on which excise duties are levied, produced at other provinces than the province where the head office is situated shall submit the declarations of excise duty in the province where such goods are produced.
5. The declarations of import and export duties shall be submitted at the customs authority where the customs declaration is made. The submission of electronic declarations of export and import duties shall be specified by the Ministry of Finance.
6. If the tax declarations are submitted under the single-window procedure, the place where tax declarations are submitted shall also follow such procedure.
Article 26. Places and methods for paying tax
1. Taxpayers shall pay tax, late payment interest, and fines to the state budget:
a) Via credit institutions, according to the Law on Credit institutions, and other service providers;
b) At State Treasuries;
c) At tax authorities;
d) Via organizations authorized by tax authorities to collect tax.
2. Tax authorities shall open accounts at credit institutions in accordance with the Law on credit institutions to concentrate the revenues from tax, late payment interest, fines, and other payments made by taxpayers (hereinafter referred to as government revenues) at State Treasuries. At the end of a working day, the tax, late payment interest, and fines paid by taxpayers to the accounts at the credit institutions must be remitted to the state budget.
The Ministry of Finance shall specify the remittance of tax, late payment interest, fines, and other government revenues to the state budget; the accounts of tax authorities at credit institutions shall be opened in accordance with the Law on credit institutions,
3. Credit institutions – according to the Law on credit institutions, service providers, State Treasuries, tax authorities, the organizations delegated by tax authorities to collect tax (hereinafter referred to as tax collectors) are responsible for arrange places, equipment, and personnel to collect tax and ensure the convenience for taxpayers to pay tax, late payment interest, and fines to the state budget.
4. When receiving tax, late payment interest, fines, or deducting tax, the tax collector shall issue tax payment receipts to taxpayers.
5. The Ministry of Finance shall set deadlines for remitting tax, late payment interest, and fines, which are collected in cash in remote areas, islands, or inconvenient areas, to the state budget.
6. The tax collectors that fail to remit the tax, late payment interest, and fines paid by taxpayers to the state budget shall pay late payment interest on the period from the deadline to the day on which those amounts are remitted to the state budget.
Article 27. Payment of tax, late payment interest, and fines under the management of tax authorities.
The order of paying tax, late payment interest, and fines is specified in Point 1 Clause 12 Article 1 of the Law on the amendments to the Law on Tax administration. The amounts shall be paid in chronological order.
The Ministry of Finance shall specify the order for paying tax, late payment interest, and fines mentioned in this Clause.
Article 28. Determining date of tax payment.
1. The date of tax payment in cash or by bank transfer to the tax collector is the day certified by the tax collector on the tax payment receipt.
2. The date of tax payment by electronic means is the date on which the taxpayer draws an amount from their bank account to pay tax, and the successful tax payment is certified by the core banking system.
Article 29. Settling overpaid tax, late payment interest, and fines.
1. Tax, late payment interest, and fines are considered overpaid when:
a) The tax, late payment interest, and fines paid by the taxpayer is higher than the tax, late payment interest, and fines payable for ten years from the day on which those amounts are paid to the state budget, except for the cases in Clause 2 Article 111 of the Law on Tax administration;
b) The taxpayer receives a tax refund under legislation on VAT, excise duty, export duties, import duties, environmental protection tax, and personal income tax.
2. The taxpayer is entitled to request the tax authority to settle the overpaid tax, late payment interest, and fines in the following forms:
a) Offsetting the overpaid tax, late payment interest, and fines against the tax, late payment interest, and fines that are unsettled;
b) Offset the overpaid amounts against the tax payable in the next period, except for the cases in Point b Clause 1 of this Article;
c) Refund an offset the overpaid amounts against other taxes, late payment interest, and fines that are unsettled, or refund the overpaid amounts if no tax, late payment interest, and fines are unsettled.
3. The taxpayer is dead, missing, incapable of civil acts shall have their overpaid tax, late payment interest, and fines settled by the tax authority in accordance with the Civil Code and Clause 2 of this Article.
4. The Ministry of Finance shall specify the procedure for offsetting overpaid tax, late payment interest, and fines mentioned in Clause 2 of this Article.
5. Wage payers that are authorized by taxpayers to make personal income tax declarations shall offset the overpaid tax against the tax arrears, and refund the overpaid tax to the taxpayers. The Ministry of Finance shall specify the implementation of this Clause.
Article 30. Paying tax during settlement of complaints and lawsuits
1. During the settlement of the complaint or lawsuit filed by a taxpayer against the amount of tax calculated or imposed by the tax authority, the taxpayer still has to pay the tax, late payment interest, and fine (if any), unless the competent authority decides to suspend the decision on tax calculation or tax imposition made by the tax authority.
2. If the paid tax is higher than the tax determined after the complaint is settled by the competent authority or a judgment of the court, the taxpayer may offset it against the tax in the next, or shall receive a refund of the overpaid amounts and the interest on the overpaid tax.
a) The interest shall be charged for the period from the date of payment till the day on which the tax authority makes a decision on tax refund;
b) The interest rate is the fundamental rate announced by the State bank and takes effect when the tax authority makes a decision on tax refund.
Article 31. Tax deferral
1. Cases eligible for tax deferral:
The tax deferral shall be considered based on the requests made by the taxpayer in one of the cases below:
a) The taxpayer suffers from physical damage caused by natural disasters, fire, unexpected accidents, which affect the business;
Physical damage is damage done to property of the taxpayer, which can be converted into cash, such as machinery, equipment, supplies, goods, workshops, offices, money, and valuable papers.
b) The operation is suspended when moving the premises at the request of competent authorities, which affect the business;
c) The fundamental construction capital, which is written in the state budget estimate, is not paid;
d) The taxpayer is not able to pay tax on schedule since the production or preservation cycle of materials and supplies imported to produce exports is longer than 275 days; the taxpayer faces other special difficulties.
2. The deferrable tax, late payment interest, and fines:
a) The deferrable tax, late payment interest, and fines in the cases specified in Point a Clause 1 of this Article are the outstanding tax, late payment interest and fines up to the time when the natural disaster, fire, or unexpected accident occurs. The deferrable amount must not exceed the difference between the value of physical damage incurred by the taxpayer and the compensation provided.
b) The deferrable tax, late payment interest, and fines in the cases specified in Point b Clause 1 of this Article are the outstanding tax, late payment interest and fines up to the time when the operation is suspended. The deferrable amount must not exceed the expenditure on moving and the damage done by the move.
c) The deferrable tax, late payment interest, and fines in the cases on specified in Point c Clause 1 of this Article are the outstanding tax, late payment interest, and fines when the deferral is requested. The total amount of deferrable tax, late payment interest, and fines eligible must not exceed the capital that has not been paid by the state budget;
d) The deferrable tax, late payment interest, and fines in the cases on specified in Point c Clause 1 of this Article are the outstanding tax, late payment interest, and fines incurred by the taxpayer due to other special difficulties.
3. Duration of tax deferral:
a) The duration of tax deferral shall not exceed 02 years from the deadline for paying tax, applicable to the cases in Point a Clause 1 of this Article;
b) The duration of tax deferral shall not exceed 01 years from the deadline for paying tax, applicable to the cases in Points b, c, and d Clause 1 of this Article.
4. The power to decide tax deferral:
a) Based on the application for tax deferral, the head of the tax authority shall decide the deferrable amount and duration of tax deferral in the cases in Points a, b, c Clause 1 of this Article.
b) The head of the customs authority shall decide the deferrable amount and duration of tax deferral in the cases in Points a, b, c Clause 1 of this Article, and in the cases in which the production or preservation cycle of the materials and supplies imported for producing export is longer than 275 days according to Point d Clause 1 of this Article;
c) The tax deferral in other special difficult cases must ensure that the government revenue estimated by the National Assembly is not changed, in particular:
– The Government shall decide the tax deferral when providing support for the market and resolving common economic difficulties;
– The Prime Minister shall decide the tax deferral in other special difficult cases at the request of the Minister of Finance.
5. The decisions on tax deferral shall be posted on websites of tax authorities.
Article 32. Writing off outstanding tax, late payment interest, and fines.
1. Cases in which outstanding tax, late payment interest, and fines are written off:
a) The enterprise that has declared bankrupt has no property to pay tax, late payment interest, and fines after making the payments under legislation on bankruptcy;
b) The individual is considered dead, missing, incapable of civil acts, and has no property to pay tax, late payment interest, and fines;
c) The outstanding tax, late payment interest, and fines that are not mentioned in Point a, b Clause 1 of this Article and meet the conditions below:
– It is more than 10 years from the deadline for paying tax, late payment interest, and fines;
– The tax authority fails to collect sufficient tax, late payment interest, and fines after taking all measures to enforce administrative decisions on taxation.
2. When the principal is written off in the cases in Clause 1 of this Article, the interest on late payment of such principal shall be also written off.
3. Range of writing off outstanding tax, late payment interest, and fines
The taxes written off include taxes, late payment interest, fines, and other government revenues managed and collected by tax authorities.
Outstanding land levy and land rent shall be written off in accordance with the Law on land and its guiding documents.
4. Reporting outstanding tax, late payment interest, and fines written off annually
a) Presidents of provincial People’s Committees shall summarize the tax, fines for late payment, and fines that are written off every year in accordance with Clause 22 Article 1 of the Law on the amendments to the Law on Tax administration, and send reports to the Ministry of Finance when reporting the provincial budget finalization;
b) The Minister of Finance shall summarize the tax, fines for late payment, and fines that are written off every year in accordance with Clause 22 Article 1 of the Law on the amendments to the Law on Tax administration;
c) The Minister of Finance shall send the Government reports on the tax, fines for late payment, and fines that are written off every year according to Points a and b of this Clause. The Government shall then request the National Assembly to approve the State budget finalization.
5. The Ministry of Finance shall provide guidance on the documentation and procedure for writing off tax, late payment interest, and fines.
Article 33. Imposing tax
1. The taxpayer shall have the tax payable imposed by tax authorities in the following cases:
a) They fail to apply for tax registration according to Article 22 of the Law on Tax administration;
b) The taxpayer fails to submit the tax declaration within 10 days from the deadline or extended deadline for submitting the tax declaration;
c) The taxpayer fails to complement the tax declaration at the request of the tax authority, or the tax declaration is not sufficiently complemented, the basis for calculating tax payable is not truthful or accurate;
d) The taxpayer fails to present accounting documents and papers related to the determination of basis for tax calculation after tax inspection at the taxpayer’s premise.
dd) The tax inspection proves that the taxpayer does bookkeeping improperly, the data in accounting books is insufficient, inaccurate, or untruthful which leads to inaccurate determination of basis for tax calculation;
e) The taxpayer is suspected of making a getaway or dispersing assets to avoid tax liabilities;
g) The taxpayer has submitted the tax declaration to the tax authority but fails to calculate the tax payable.
2. For some lines of business, if the tax inspector finds inadequate accounting books or invoices, or tax are not accurately declared or calculated, the tax authority shall impose a ratio of value added and ratio of income to revenue in accordance with law.
3. The taxpayer shall have the tax on exported goods and imported goods imposed by tax authorities when:
a) The taxpayer calculate and declare tax based on illegitimate documents; fails to make declarations or to declare sufficiently and accurately the information related to tax liabilities;
b) The taxpayer avoids or delays the provision of relevant documents at the request of the customs authority to determine the tax payable; fails to prove or explain the information related to the determination of tax liabilities by the deadline; fails to comply with the decision on inspection of the customs authority.
c) The customs authority has proved that the customs value declared by the taxpayer is not consistent with actual value;
d) The taxpayer fails to calculate the tax payable.
dd) Other cases in which the customs authority or other authorities find that the tax declaration or tax calculation is not conformable with law;
The Director of the General Department of Customs, Directors of provincial Departments of Customs, and Directors of Sub-departments of customs are entitled to impose tax as prescribed in this Clause.
Article 34. Imposition of relevant factors related to tax calculation
The taxpayer shall have the factors related to tax calculation imposed in the following cases:
1. After examining the tax declaration, the tax authority suspects that the taxpayer does not sufficiently or accurately declare the factors for tax calculation, and the taxpayer fails to make a supplementary at the request of the tax authority.
2. After examining the accounting books and invoices related to the tax payable, the tax authority can prove that the taxpayer does not accurately or truthfully record the factors related to tax calculation.
3. The sale prices of goods and services recorded are not consistent with the actual prices with reduce the taxable revenue, or prices of goods and materials serving the business are not consistent with the actual prices with increase the expense and deductible VAT, and reduce tax liabilities.
4. The taxpayer fails to explain or prove the accuracy of the information related to the quantity, categories, origins, taxable values, codes, tax rates, or the amount of tax exempted, reduced, or refund of exported goods and imported goods.
5. The taxpayer has submitted the tax declaration but fails to determine the factors for tax calculation, or the factors for tax calculation are determined by the taxpayer fails to calculate the tax payable.
Article 35. Basis for tax imposition
The tax authority shall impose tax in the cases mentioned in Article 34 and Article 35 of this Decree based on one of the information below:
1. The database of the tax authority which is collected from:
a) The tax declarations and the amount of tax paid in previous periods;
b) Information about business transactions between the taxpayer and relevant organizations and individuals;
c) The information provided by state authorities;
d) Other information collected by the tax authority.
2. The information about:
a) The local taxpayers that trade in the same articles, engage in the same business line, or have the same business scale. If the information about the articles, business line, and scale of the taxpayer is not available in the locality, such information shall be obtained in other localities.
b) The average tax payable by some local businesses that engaged in the same business line or trade in the same articles. If the information about local businesses that engaged in the same business line or trade in the same articles is not available, such information shall be obtained in other localities.
3. Effective inspection results and documents.
Article 26. Advance pricing agreement
1. Subjects of application:
The taxpayers defined in the Law on Corporate income tax that make tax declarations using the methods in Clause 1 Article 11 of the Law on Corporate income tax (corporate income tax payable = assessable income multiplied (x) by tax rate) and make transactions with the parties involved.
2. APA is used for determining corporate income tax in the tax year of the enterprises involved. An APA shall contain:
a) The names and addresses of the parties that enter into APA;
b) Descriptions of transactions within APA;
c) The method of calculating taxable prices, prices, gross profit margin, and profitability as the basis for calculating taxable prices related to APA transactions;
d) The important presumptions that may significantly affect the implementation of APA (including analyses and forecasts);
dd) Responsibilities and obligations of taxpayers;
e) The responsibilities and obligations of tax authorities (including regulations on bilateral agreements between relevant tax authorities);
g) The effect;
h) Other regulations on tax liabilities related to APA;
i) Appendixes (if any).
3. The General Department of Taxation shall accept offer of APA, discuss and negotiate with taxpayers or foreign tax authorities involved; supervise the implementation of APA.
4. The Ministry of Finance shall specify the application of APA to tax administration; approve the APA and assign the General Department of Taxation to sign it.
5. The validity period of an APA is not longer than 05 years, and may be extended for no more than 05 more years. The APA shall not take effect before the taxpayer requests the application of APA.
6. The APA may be suspended or terminated any time before the official expiration at the request of taxpayers or tax authorities.
If the APA must be terminated due to objective reasons, or the APA must be amended, or a new APA must be signed, the taxpayer shall Send a written request for the termination, supplementation of information or documents, or compilation of dossiers in accordance with Clause 2 of this Article to terminate or amend the signed APA, or to sign a new APA.
When an APA is terminated ahead of schedule according to Clause 5 of this Article, the information provided by taxpayers must not be used by tax authorities as evidence serving the tax inspection or tax imposition.
Article 37. Deadline for paying tax calculated or imposed by the tax authority
1. Deadline for paying tax calculated or imposed by the tax authority is the deadline written in the notification made by the tax authority, in particular:
a) The deadline for paying tax on non-agricultural land, agricultural land, land levy, land rent, water surface rent, and registration fees is the deadline written on the tax notices (or bills) made by the tax authority;
b) The deadline for paying presumptive taxes shall be decided by the Ministry of Finance;
c) For the cases in which tax is imposed by the tax authority because of late submission of the tax declaration, the deadline for paying tax is 10 days from the day on which the tax authority signs the decision on tax imposition;
d) For the cases in which tax is imposed by the tax authority based on tax inspection records, the deadline for paying tax is 10 days from the day on which the tax authority signs the decision on tax imposition. If the tax imposed is 500,000,000 VND or higher, the deadline is 30 days from the day on which the tax authority signs the decision on tax imposition.
Article 38. Conditions for application of the deadline for paying tax on materials and supplies imported for producing exports
1. The taxpayer may apply the deadline of 275 days according to Clause 11 Article 1 of the Law on the amendments to the Law on Tax administration when all conditions below are satisfied:
a) The taxpayer has factories, where exports are produced, in Vietnam;
b) The taxpayer has engaged in export and import for at least 02 consecutive years by the day on which the customs declaration of materials and supplies imported for producing exports is made.
b) The taxpayer does not have any record for smuggling, illegal transportation of goods across the border, tax avoidance, or trade fraud over the last 02 years from the day on which the customs declaration of materials and supplies imported for producing exports is made.
c) The taxpayer does not have overdue tax arrears, late payment interest, and fines for exported goods and imported goods when the customs declaration is registered;
d) The taxpayer has not incurred any penalties for administrative violations against legislation on accounting over the last 02 years from the day on which the customs declaration is registered;
dd) The taxpayer makes payment for the import of goods for producing exports by bank transfer.
2. If the import is authorized, the taxpayer must present the import authorization contract. The enterprise authorized to import must comply with Points b, c, d, dd Clause 1 of this Article.
If the parent company or associate company imports or provide imported goods to other subsidiary companies or associate companies to produce exports, the conditions in Points b, c, d, dd Clause 1 of this Article must be satisfied.
Article 39. Paying tax arrears in installments
1. The taxpayer is not able to pay the tax arrears one time may pay them in installments over no more than 12 months from the effective day of the decision on taxation enforcement, provided that taxpayers has the tax arrears guaranteed by a credit institution, and a commitment to pay tax arrears and late payment interest to the state budget is made.
The taxpayer must comply with the commitment to evenly divide the tax arrears to pay them in installments every month.
For exported goods and imported goods, the taxpayer must pay the tax on the shipment that is undergoing customs procedures before customs clearance, or must be guaranteed by a credit institution, apart from the aforesaid conditions.
2. Obligations of taxpayers that pay tax arrears in installments.
a) While paying the tax arrears in installments, the taxpayer still have to pay late payment interest at 0.05% of the tax arrears per day;
The taxpayer must pay the tax and late payment interest in full.
c) If the taxpayer fails to pay tax arrears and late payment interest on schedule, the guaranteeing organization shall pay them on behalf of the taxpayer, including the tax arrears, late payment interest at 0.05% of tax arrears per day and late payment interest at 0.07 % of late payment interest per day.
3. The power to decide tax payment in installments:
a) The head of the tax authority shall decide the payment of tax arrears in installments;
b) The head of the customs authority shall decide the payment of tax arrears on exported goods and imported goods of taxpayers.
4. The Ministry of Finance shall provide guidance on the documentation and procedure for paying tax arrears in installments specified in this Article.
Article 40. Discharging tax liabilities when exiting.
1. The Vietnamese people that leave Vietnam to reside abroad, the Vietnamese people that reside abroad and foreign must discharge tax liabilities before exiting Vietnam.
2. The taxpayers mentioned in Clause 1 of this Article must be have the discharge of tax liabilities certified by tax authorities before exiting Tax authorities shall certify the discharge of tax liabilities in writing at the request of taxpayers.
3. The immigration agencies shall suspend the exit of an individual when receiving a written notice or email from the tax authority about the undischarged tax liabilities.
Article 41. Obligations of tax authorities to processing tax refund applications
1. Tax authorities shall refund first, inspect later under legislation on taxation, except for the cases in Clause 2 of this Article.
2. Cases of tax inspection before tax refund:
a) Refunding tax in accordance with International Agreements to which Vietnam is a signatory;
b) The taxpayer makes a claim tax refund for the first time, except for the claims for refund of personal income tax. Where the taxpayer sends a tax refund application to the tax authority for the first time but is not eligible for tax refund, the next claim for tax refund is considered the first claim for tax refund;
c) The taxpayer makes a claim for the tax refund within 02 years from the day on which tax avoidance or tax fraud was penalized;
If no false declaration, which leads to a reduction in tax payable or increase tax refund according to Clause 33 Article 1 of the Law on the amendments to the Law on Tax administration, is made, or no tax avoidance or trade fraud, according to Article 108 of the Law on Tax administration and Clause 34 Article 1 of the Law on the amendments to the Law on Tax administration, is committed when making the first claim for tax refund during the aforesaid 2-year period, the tax refund application shall not be subject to tax inspection before refund. If the taxpayer is found to make false declarations, commit tax avoidance or tax fraud, according to Clause 33 and Clause 34 Article 1 of the Law on the amendments to the Law on Tax administration and Article 108 of the Law on Tax administration, when making the next claims for tax refund, the taxpayer shall be subject to tax inspection before refund until the end of the 2-year period.
d) Payments for goods and services in the application for tax refund are not made via bank transfer, except for applications of VAT refund;
dd) The enterprise is undergoing merger, amalgamation, division, dissolution, bankruptcy, conversion, shutdown; the state-owned enterprise is transferred, sold, or leased;
e) The taxpayer fails to provide explanation or supplement the application for tax refund by the deadline, or fails to prove the accuracy of the tax declaration after providing explanation and supplementation. This regulation is not applicable to the goods and services eligible for tax refund;
g) The taxpayer has not provided bank transfer receipts when submitting the application for tax refund;
h) The licensed imported goods must comply with the regulations on quarantine, food safety and hygiene, and goods quality inspection;
i) The imported goods subject to inspection before tax refund as defined by the Ministry of Finance.
3. Deadline for processing tax refund applications
a) The deadlines for processing tax refund applications are specified in Point 2 and Point 5 Clause 18 Article 1 of the Law on the amendments to the Law on Tax administration, except for the cases in Point b of this Clause;
In this case, the tax refund applications are eligible for tax refund before inspection. The period from the day on which the tax authority requests the explanation or supplementation to the day on which the tax authority receives the explanation or supplementation is not included in the time limit for processing the tax refund application.
b) The deadlines for processing tax refund applications in Clause 13 Article 1 of the Law on the amendments to the Law on Tax administration is applicable to the applications for refund of overpaid tax, which is certified by the tax authority, the applications for refund of overpaid tax, late payment interest, and fines of exported goods and imported goods;
The heads of tax authorities shall issue decisions on tax refund. If the late processing of the tax refund application is on account of tax authority, the taxpayer shall receive interest on the late refund apart from the tax refund; the interest shall be calculated in accordance with Point a, b Clause 2 Article 30 of this Decree. The interest shall be deducted from the fund for tax refund as prescribed by the Ministry of Finance.
4. The deadline for post-refund inspection according to Point 3 Clause 13 Article 1 of the Law on the amendments to the Law on Tax administration;
a) The tax authority shall carry out the post-refund inspection within 01 year from the day on which the decision on tax refund is made, except for the cases below:
– The business suffers from a loss for 02 consecutive years preceding the year in which the decision on tax refund is made, or the loss exceeds the equity up to the year exceeding the year in which the decision on tax refund is made. The loss is determined based on the finalized declaration of corporate income tax or the inspection conclusion made by a competent authority.
– Businesses shall receive refunds of tax on real estate business, goods sale, or service provision. If a business fails to separate the tax on real estate, goods sales, or service provision, the post-refund inspection shall be carried out within 01 year from the day on which the decision on refunding tax on the entire business is made.
– The business changes its premises twice within the previous 12 months from the day on which the decision on tax refund is made;
– The business undergoes an unusual change in the taxable revenue and refundable tax within the previous 12 months from the day on which the decision on tax refund is made.
b) In the cases not being mentioned in Point a of this Clause, the post-refund inspection shall be carried out in accordance with risk management principles within 10 years from the day on which the decision of tax refund is made.
Article 42. Calculating exempted and reduced tax
1. Taxpayers shall calculate exempted and reduced tax in the tax declaration or application for tax exemption or reduction sent to tax authorities, except for the cases in Clause 2 of this Article.
2. Tax authorities shall calculate and decide tax exemption or reduction in the following cases:
a) Exemption and reduction of excise duty, severance tax, personal income tax incurred by taxpayers that suffer from natural disasters, fire, unexpected accidents, who are not able to pay tax in accordance with law; exemption of tax on non-agricultural land, tax on agricultural land, land rent, water surface rent, registration fees incurred by taxpayers. The Ministry of Finance shall specify the tax exemption or reduction in this Point;
The exemption or reduction of land levy depends on cadastral documents enclosed with the papers proving the eligibility for exemption or reduction of land levy, and relevant documents. Tax authorities shall not issue decisions on tax exemption or reduction, but only indicate the amount of exempted or reduced land levy on the land levy notice.
b) Tax exemption for business households and individuals that pay presumptive taxes under legislation on taxation;
c) Exemption of severance tax on natural forest products that are legally extracted by local residents under legislation on severance tax;
d) Other cases in which exemption and reduction of export duties or import duties are considered under legislation on export duties, import duties, or International Agreements to which Vietnam is a signatory;
dd) Other cases defined by legislation on taxation.
Article 43. The obligations and entitlements of tax authorities to the construction and management of taxpayers’ information system
1. Tax authorities are responsible for developing taxpayers’ information system:
a) Develop a system of criteria for information and database to be collected from taxpayers, tax authorities, third parties, and overseas competent authorities; standardize the forms or collect information in the form provided by information providers and information provided for overseas competent authorities in accordance with International Agreements to which Vietnam is a signatory;
b) Develop a communication system that meet the demand for collecting, processing, storing, transmitting, using, and controlling information within tax authorities.
2. Tax authorities are responsible for managing the taxpayers’ information system, in particular:
a) Formulate a mechanism for using information about taxpayers to serve tax administration;
b) Formulate a mechanism for providing information for state authorities serving state management, a mechanism for providing information for overseas competent authorities in accordance with the International Agreements to which Vietnam is a signatory;
c) Manage the database and maintain the taxpayers’ information system.
Article 44. Responsibility to provide information of state authorities
State authorities are responsible for providing information about taxpayers to tax authority, in particular:
1. The authorities that issue certificates of business registration, licenses for establishment and operation, certificates of investment incentives, and certificates of investments shall provide information about certificates of business registration, licenses for establishment and operation, certificates of investment incentives, and certificates of investments, or certificates of changes in business registration, decisions on merger, division, separation, dissolution, and bankruptcy of taxpayers within 07 working days from the day on which such certificates, licenses, and decisions are issued, and other information at the request of tax authorities.
2. State Treasuries shall provide information about the tax paid and refunded to tax authorities.
3. Every month or at the request of tax authorities, state authorities in charge of housing and land shall provide information about changes in the use of land and ownership of houses of the organizations, households, and individuals related to tax administration.
4. The police shall provide information about prevention and suppression of financial crimes; information about individuals that enter/exit Vietnam, temporary residents; information about hotels, motels, guesthouses; information about vehicle registration at the request of tax authorities.
5. Inspection authorities shall provide information about the conformity with legislation on taxation of taxpayers at the request of tax authorities.
6. State authorities in charge of trade shall provide information on management policies on international trading, including, export, import, temporary import for re-export, temporary export for re-import, transit, import/export authorizations, agents, processing, transit of goods of Vietnam and other countries, and other information at the request of tax authority.
7. The State bank shall cooperate with the Ministry of Finance in providing a mechanism for providing information about taxpayers, tax guarantors for tax authorities.
8. Other state authorities shall cooperate with tax authorities in providing information about taxpayers for tax authorities.
9. State authorities in charge of telecommunications infrastructure shall announce and provide information about the localities, where telecommunications infrastructure is adequate to make transactions via electronic means, to tax authorities.
Article 45. Responsibility to provide information of relevant organizations and individuals
1. The credit institutions defined by the Law on credit institutions shall provide information at the request of tax authorities, including:
a) The documents and information about transactions via bank accounts of taxpayers; information about the guarantee for taxpayers of the bank at the request of tax authorities;
b) Documents, payment account numbers, copies of accounting books of payment accounts, copies of international payment receipts, domestic payment receipts, and bank transfer receipts at the request of tax authorities;
c) Other information serving information processing and tax inspection of tax authorities at the request of tax authorities.
2. Providers of taxation services, accounting services, and independent audit companies shall provide information at the request of tax authorities.
3. The organizations and individuals that are partners or clients of taxpayers shall provide information about taxpayers at the request of tax authorities.
4. Vietnam Chamber of Commerce and Industry shall provide information about the issuance of Certificates of Origin for exported goods; information about registration and protection of intellectual property rights and technology transfers in Vietnam and overseas at the request of tax authorities.
5. Other organizations and individuals providing information at the request of tax authorities.
6. The information shall be provided or exchanged between tax authorities and organizations/individuals in writing or electronic data. Taxpayers shall not be notified when their information is provided for tax authorities, unless otherwise prescribed by law.
Article 46. Collecting overseas information about tax administration
1. tax authorities shall collect overseas information to serve tax administration, including:
a) Origins, trading values, standards, and quality of goods;
b) Legitimacy of documents used for tax calculation;
c) Violations against legislation on customs and taxation;
d) Verification of other information about taxpayers.
2. Overseas information shall be collected from:
a) Tax authorities, other authorities of the state according to agreements on support for information provision and information exchange among countries.
b) Relevant international organizations in accordance with International Agreements to which Vietnam is a signatory;
c) From producers, exporters, importers indicated by tax authorities in accordance with the International Agreements to which Vietnam is a signatory;
d) Information service providers oversea in accordance with the international laws to which Vietnam is a signatory.
3. The information stated in Points a, b, c Clause 2 of this Article must be conformable with the law of the home countries, and is one of the basis for impositions of tax and penalties for violations against the law on tax administration.
4. The Ministry of Finance shall provide guidance on collecting information overseas.
Article 47. Disclosing information about taxpayers
Tax authorities may disclose information about violations against legislation on taxation committed by taxpayers, in particular:
1. Avoiding tax, appropriating tax, illegally trading invoices, losing invoices, committing violations legislation on taxation then feeing, abetting tax avoidance, failing to pay tax on time after tax authorities has imposed penalties or enforced tax payment.
2. The violations against legislation on taxation committed by taxpayers, which affect the interests and obligation to pay tax of other organizations and individuals.
3. Failing to comply with the request of tax authorities in accordance with law, such as: refusing to provide information and documents for tax authorities, not complying with decisions on inspection and other requests made by tax authorities.
4. Obstructing tax officials and customs officials from performing their duties.
5. Other information that is disclosed in accordance with law.
Article 48. Making declaration, tax payment and transactions by electronic means
1. The taxpayers that are businesses in localities with information technology infrastructure must declare, pay tax, and make transactions with tax authorities by electronic means under legislation on electronic transactions.
When making electronic transactions, taxpayers may use electronic transaction equipment and services of lawful services providers.
2. Tax authorities shall develop and run the information technology system for making declaration, tax payment and transactions by electronic means
Article 49. Cases of tax inspection at the premises of taxpayers
1. The cases defined in Point c and Point d Clause 3 Article 77 of the Law on Tax administration.
2. The taxpayer is suspected of violating laws after analyzing and assessing the conformity with law of taxpayers.
3. The cases of inspections before tax refund and post-refund inspections.
4. The cases selected according to the plans decided by heads of superior tax authorities based on risk management for taxation.
Heads of tax authorities shall decide the inspections in the cases in Clause 2 and Clause 4 of this Article not exceeding once per year.
Article 50. Post-clearance tax inspections at the premises of taxpayers
1. Post-clearance tax inspections shall be carried out the following cases:
a) The cases defined in Point d Clause 3 Article 77 of the Law on Tax administration;
b) There are signs of violations against legislation on taxation;
c) Scheduled inspections to assess the conformity with law of taxpayers;
d) Thematic inspections decided by heads of superior tax authorities based on risk management for taxation.
2. The Director of the General Department of Customs, Directors of provincial Departments of Customs, and Directors of Sub-department of Post-Clearance Inspection shall decide tax inspections at the premises of taxpayers, perform the tasks and exercise the entitlements specified in Article 80 of the Law on Tax administration.
3. Post-clearance tax inspections at the premises of taxpayers shall be carried out within 15 working days in the cases in Point c Clause 1 of this Article, or within 05 working days in the cases in Point a, Point b, and Point d Clause 1 of this Article from the day on which the decision on inspection is announced. The decision on inspection may be extended once where necessary. The extension shall not exceed the time limit in this Clause.
4. If the taxpayer fails to comply with the decision on inspection, or fails to provide explanation or documents at the request of the inspectorate, the customs authority shall impose tax and penalties.
Article 51. The right to make complaints and denunciation of taxpayers, organizations and individuals
1. Taxpayers, organizations and individuals are entitled to request tax authorities or competent authorities to reconsider administrative decisions and administrative acts of tax authorities and tax officials when there is proof that such decisions or acts are illegal and infringe their lawful rights and interests.
2. Administrative decisions are written decisions made by tax authorities or competent persons in tax authorities, and are applicable once to one or some subjects, on a particular issue during the tax administration. Administrative decisions made by tax authorities include:
a) The decision on tax imposition; notice of taxation;
b) Decisions on tax exemption or reduction;
c) Decisions on tax refund; decisions on tax cancellation;
d) Decisions on penalties for administrative violations of legislation on taxation;
dd) Decisions to enforce the implementation of administrative decisions on taxation;
e) Other administrative decisions on taxation defined by law.
3. Administrative acts are the performance or failure to performance of tax administration tasks of tax authorities and tax officials, who are assigned to perform tax administration tasks.
4. Citizens are entitled to denounce the violations against legislation on taxation committed by taxpayers, tax authorities, tax officials, or other organizations and individuals in accordance with law.
Article 52. The power of tax authorities to settle complaints and denunciation
1. Directors of Sub-departments of Taxation, directors of Sub-department of Customs are entitled to settle complaints against their administrative decisions and administrative acts, or administrative decisions and administrative acts of the persons under their management.
2. Directors of Departments of Taxation, Directors of Departments of Customs, Directors of Departments of Post-clearance Inspection, and Directors of Departments of Smuggling Investigation are entitled to:
a) Settle complaints against their administrative decisions and administrative acts, or administrative decisions and administrative acts of the persons under their management;
b) Settle complaints that are not completely settled by Directors of Sub-departments of Taxation, directors of Sub-department of Customs.
3. The Director of the General Department of Taxation and the Director of the General Department of Customs are entitled to:
a) Settle complaints against their administrative decisions and administrative acts, or administrative decisions and administrative acts of the persons under their management;
b) Settle complaints that are not completely settled by Directors of Departments of Taxation, Directors of Departments of Customs, Directors of Departments of Post-clearance Inspection, and Directors of Departments of Smuggling Investigation.
4. The Minister of Finance is entitled to:
a) Settle complaints against their administrative decisions and administrative acts, or administrative decisions and administrative acts of the persons under their management;
b) Settle complaints that are not completely settled by the Director of the General Department of Taxation and the Director of the General Department of Customs.
5. The power to settle denunciations shall comply with legislation on denunciations.
Article 53. Responsibility and powers of tax authorities to settle complaints and denunciations of taxation
1. When receiving complaints and denunciations of taxations, tax authorities shall consider settling them by the deadline specified by legislation on complaints and denunciations.
2. When receiving complaints of taxation, tax authority shall request the complainer to provide documents related to the complaint. If the complainer refuses to provide documents, the tax authority is entitled to refuse to settle the complaints
3. Tax authorities shall refund the tax, late payment interest and fines that are improperly collected, and pay interest on those amounts at the rates specified in Clause 2 Article 30 of this Article within 15 days from the day on which the decision to settle complaint/denunciation is made, or the day on which the decision on settlement made by a competent authority is received.
4. If the tax payable in the decision on settlement is higher than that in the complained administrative decision, the taxpayer must pay the tax arrears within 10 days from the day on which the decision on settlement is received.
Chapter 3.

IMPLEMENTATION

Article 45. Effect
This Decree takes effect on September 15, 2013 and supersedes the Government’s Decree No.85/2007/NĐ-CP dated May 25, 2007 and the Government’s Decree No. 106/2010/NĐ-CP dated October 28, 2010 elaborating the implementation of the Law on Tax administration.
Article 55. Writing off irrecoverable tax arrears and fines incurred before July 01, 2007
1. The cases in which tax arrears and fines are written off according to Clause 3 Article 2 of the Law on the amendments to the Law on Tax administration include:
a) The households and individuals who are not able to pay tax and fines incurred before July 01, 2008, and have suspended their business;
b) State-owned enterprises that have been dissolved under decisions of competent authorities and still owe tax and fines incurred before July 01, 2007;
c) State-owned enterprises that have been equitized in accordance with the Government’s Decree No. 44/1998/NĐ-CP dated June 29, 1998, the Government’s Decree No. 64/2002/NĐ-CP dated June 19, 2002, the Government’s Decree No. 187/2004/NĐ-CP dated November 16, 2004, are issued with certificates of business registration and establishment of new legal entities, and still owe tax and fines incurred before July 01, 2007, which are not recorded as reduction in state capital during the equitization;
d) State-owned enterprises that are transferred or sold in accordance with the Government’s Decree No. 103/1999/NĐ-CP dated September 10, 1999, the Government’s Decree No.80/2005/NĐ-CP dated June 22, 2005, have been issued with certificates of business registration, and still owe tax and fines incurred before July 01, 2007, which are not included to the value of the enterprises.
The Ministry of Finance shall provide guidance on the conditions for writing of tax and fines prescribed in this Clause.
2. The when the tax arrears are written off in the cases in Clause 1 of this Article, the late payment interest and fines of those tax arrears are also written off.
3. The Ministry of Finance shall specify the documentation and procedure for writing of taxes and fines in the cases in Clause 1 of this Article.
4. The power to write off tax arrears is specified in Clause 22 Article 1 of the Law on Tax administration.
Article 56. Implementation
1. The Ministry of Finance shall provide guidance on the implementation of this Decree.
2. Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Presidents of provincial People’s Committees are responsible for the implementation of this Decree./
 

The post Decree No. 83/2013/ND-CP DETAILING THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE LAW ON TAX ADMINISTRATION AND LAW AMENDMENTS AND SUPPLEMENTS TO A NUMBER OF ARTICLES OF THE LAW ON TAX ADMINISTRATION appeared first on MP Law Firm.

THE GOVERNMENT
——-

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
———

No. 65/2013/ND-CP

Hanoi, June 27, 2013

DECREE

DETAILING A NUMBER OF ARTICLES OF THE LAW ON PERSONAL INCOME TAX AND LAW AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF THE LAW ON PERSONAL INCOME TAX

Pursuant to the Law on Government organization dated December 25, 2001;
Pursuant to the Law on personal income tax dated November 21, 2007; Law on amending and supplementing a number of articles of the Law on personal income tax dated November 22, 2012;
At the proposal of the Minister of Finance;
The Government promulgates the Decree detailing a number of articles of the law on personal income tax and law amending and supplementing a number of articles of the law on personal income tax,
Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of regulation
This Decree details and guides a number of articles of the Law on personal income tax and Law amending and supplementing a number of articles of the Law on personal income tax.
Article 2. Taxpayers
1. PIT payers include resident and non-resident individuals who earn taxable incomes specified in Article 3 of the Law on personal Income Tax and Article 3 of this Decree.  Scope to define taxable income of taxpayers shall be as follows:
a) For resident individuals, their taxable incomes are incomes earned inside and outside the Vietnamese territory, regardless of where their incomes are paid;
b) For non-resident individuals, their taxable incomes are incomes earned in Vietnam, regardless of where their incomes are paid.
2. A resident individual means a person who satisfies any of the following conditions:
a) Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of his/her presence in Vietnam;
Individuals present in Vietnam under this Point means those whose presence is in the Vietnamese territory.
b) Having a place of habitual residence in Vietnam in either of the following two cases:
– Having a registered place of permanent residence under the law on residence;
– Having a rented house for dwelling in Vietnam under the law on housing, under a rent contract with a term of 183 days or more in a tax year.
In case an individual has a place of permanent residence in Vietnam as prescribed in this point but he/she actually presents in Vietnam less than 183 days in tax year and he/she fail to prove that he/she is resident person of other country, so he/she will be considered as resident person in Vietnam.
3. A non-resident individual means a person who does not satisfy any of the conditions specified in Clause 2 of this Article.
Article 3. Taxable incomes
Taxable incomes of individuals include the following kinds of income:
1. Incomes from production or business activities, including:
a) Incomes from goods production or trading or service provision under law.  Particularly for incomes from agricultural production, forestry, salt-making, aquaculture and fishing activities, personal income tax will only be imposed on individuals who do not fully satisfy the conditions for tax exemption specified in Clause 5, Article 4 of this Decree.
b) Incomes from independent professional activities of individuals possessing practice licenses or certificates under law.
2. Incomes from salaries or wages receivable by employees from their employers, including:
a) Salaries, wages and amounts of similar nature receivable in monetary or non monetary forms.
b) Allowances and subsidies, except for the following allowances and subsidies:
– Allowances and subsidies of monthly preferential treatment and lump-sum subsidies as prescribed by law on preferential treatment of persons with meritorious services;
– Monthly subsidies and lump-sum subsidies for subjects joined in resistance, protection of Mother Land, international missions, voluntary youth persons already finished mission;
– National defense and security allowances; subsidies appliable to armed forces;
– Hazard or danger allowances for persons working in branches, occupations or jobs at places where exist hazardous or dangerous elements;
– Allowances for attraction of laborers to work in certain branches or in certain regions;
– Subsidies for sudden difficulties, subsidies for laborers suffering from labor accidents or occupational diseases; lump-sum maternity or child adoption allowances; subsidies for working capacity decrease, lump-sum retirement allowances, monthly survivorship allowances, severance and job loss allowances, unemployment subsidies and other allowances, subsidies as prescribed in the Labor Code and the Law on Social insurance;
– Subsidies for subjects enjoyed social protection as prescribed by law;
– Serving allowances for senior leaders;
– Lump-sum subsidies for individuals when move their job to regions with special difficult socio-economic conditions, lump-sum support for cadres, civil servants doing affairs on sovereignty of sea and island as prescribed by law. Lump-sum subsidies upon transferring region for foreigners coming Vietnam for residence, Vietnameses going abroad for work;
– Allowances for health officials of hamlets, villages;
– Allowances according to specific characteristic of trades;
Allowances and subsidies not accounted as taxable incomes specified at this Point must be prescribed by competent state agencies.
c) The received remunerations under forms as:  brokerage commissions, payments for participation in schemes or projects, royalties, and other commissions, remunerations;
d) Sums of money earned from participation in business associations, boards of directors, control boards, management boards, associations, professional clubs and other organizations;
dd) Other monetary or non-monetary benefits other than salaries and wages paid by employers and taxpayers are beneficiaries in any form:
– House rents, charges for electricity, water and associated services (if any);
– Accumulation premiums from life insurance, other non-compulsory insurances, accumulation amount of contribution in the voluntary retirement fund, which are bought or paid for employees by the employers.  Before paying the insurance amount, pensions to individuals, insurers, companies managing the voluntary retirement fund are responsible for withholding tax at the rate of 10% for accumulation premiums,  accumulation amount of contribution in fund corresponding to part that has been purchased or contributed for employees by the employers, from July 01, 2013;
– Membership fees and charges for other services provided for individuals at the request, such as:  Healthcare, entertainment, sports, recreation, beauty care;
– Other benefits as prescribed by law.
e) Monetary or non-monetary bonuses or rewards in any form, including also bonus securities, except for the following bonuses or rewards:
– Rewards accompanying honorary titles conferred by the State, including also those accompanying emulation titles and other commendation and reward forms under the law on emulation and commendation;
– Rewards accompanying international or national prizes recognized by the Vietnamese State;
– Rewards for technical renovations, innovations or inventions recognized by competent state agencies;
– Rewards for detection of and reporting on illegal acts to competent state agencies.
g) Not count in taxable incomes for the following amounts:
– The support amounts of the employers for the employees and the employees’ relatives (parents, spouses, and children) so as to pay for medical examination and treatment involving dangerous diseases;
– The received amounts under the regime involving use of travel means in state agencies, public non-business units, party’s organizations, mass associations;
– The received amounts under the regime of official-duty houses as prescribed by law;
– The received amounts other than wages, salaries because of participation in or serving for activities of the Party, Union, National Assembly or elaborating legal documents of the State;
– Amounts for shift meals for employees paid by the employers not exceeding the level set by the Minister of Labor, Invalids and Social Affairs.
– Amount of buying the round-trip flight tickets paid on behalf (or paid) by the employers for employees being foreigners, employees being Vietnameses working abroad to go back home country for once annual leave;
– Study charges for children of foreign employees to study in Vietnam, children of the Vietnamese employees working abroad to study in foreign country at the education grade from early childhood education to upper secondary education paid on behalf by the employers.
3. Incomes from capital investment, including:
a) Loan interests;
b) Share dividends;
c) Incomes from capital investment in other forms, including also capital contributions in kind, reputation, land use rights, creations or inventions; except for government bond interests.
4. Incomes from capital transfer, including:
a) Incomes from transfer of capital holdings in economic organizations;
b) Incomes from transfer of securities;
c) Incomes from capital transfer in other forms.
5. Incomes from transfer of real estate, including:
a) Incomes from transfer of rights to use land and assets attached to land, including construction works formed in future;
b) Incomes from transfer of the right to own or use residential houses, including residential houses formed in future;
c) Incomes from transfer of the right to lease land or water surface;
d) Other incomes earned from transfer of real estate in all forms;
Taxable incomes at this clause include incomes from authorization for management of real estate which the authorized persons have the right to transfer real estate or have the right as of the owner of real estate as prescribed by law.
6. Incomes from won prizes in cash or in kind, including:
a) Lottery winnings;
b) Sales promotion winnings in all forms;
c) Betting or casino winnings;
d) Winning in prized games and contests and other forms of winning.
7. Incomes from copyright, including:
a) Incomes from assignment or licensing of intellectual property objects:  copyright and related rights; industrial property rights; rights to plant varieties;
a) Incomes from technology transfers: technical know-how, technical knowledge, solutions to production rationalization and technological renewal.
8. Incomes from commercial franchising under the Commercial Law.
9. Incomes from inheritances that are securities, capital holdings in economic organizations or business establishments, real estate and other assets subject to ownership or use registration.
10. Incomes from gifts that are securities, capital holdings in economic organizations or business establishments, real estate and other assets subject to ownership or use registration.
Article 4. Tax-exempt income
1. Incomes from transfer or real estate (including resident houses and construction works formed in future as prescribed by law on real estate business) between:  spouses; parents and their children; adoptive parents and their adopted children; fathers-in-law or mothers-in-law and daughters-in-law or sons-in-law; grandparents and their grandchildren; or among blood siblings.
2. Incomes from transfer of residential houses, rights to use residential land and assets attached to residential land received by individuals who have only one residential house or right to use residential land in Vietnam.
The transfer individuals who have only one residential house or right to use residential land in Vietnam as prescribed in this clause must satisfy the following conditions:
a) At the time of transfer, individuals have only right to own, right to use one residential house or one residential land plot (including case of possessing residential house or construction works attached to that land plot);
b) Duration for individuals to have right to own, right to use residential house or residential land which is counted to time of transfer is not less than 183 days;
c) Residential house or/and right to use resident land are transferred entirely;
Determination of right to own, right to use the residential house, residential land are based on certificate of right to own, right to use the residential house, residential land.  Individuals who have residential house, residential land transferred shall be responsible for declaration and take responsibilities before law for accuracy of declaration. If competent agencies detect wrong declaration, individuals will not be exempted tax and be handled as prescribed by law.
3. Incomes from value of the right to use land of individuals who are assigned land by State not required to pay money or reduced land levy shall comply with provisions of law.
4. Incomes from receipt of inheritances or gifts that are real estate (including resident houses and construction works formed in future as prescribed by law on real estate business) between:  spouses; parents and their children; adoptive parents and their adopted children; fathers-in-law or mothers-in-law and daughters-in-law or sons-in-law; grandparents and their grandchildren; or among blood siblings.
5. Incomes of households and individuals directly engaged in agricultural or forest production, salt making, aquaculture, fishing of aquatic products not yet processed into other products or preliminarily processed.
Households and individuals directly engaged in production activities specified in this Clause must satisfy the following conditions:
a) Having lawful land or water surface use rights for production, and directly engaging in agricultural or forest production, salt making or aquaculture.  For fishing activities, they must have the right to own or use ships, boats and fishing gears and directly engaging in these activities;
b) They actually reside in localities where agricultural or forest production, salt making or aquaculture activities are conducted under the law on residence.
6. Incomes from conversion of agricultural land allocated by the State to households and individuals for production.
7. Incomes from interests on deposits at banks or credit institutions or interests from life insurance contract.
8. Incomes from foreign exchange remittances.
9. Salary or wage amounts paid for night shift and overtime work, which are higher than those paid for day shifts or prescribed working hours under law.
10. Retirement pensions that are paid by Social Insurance Fund under the Law on Social Insurance, and pensions received monthly from the voluntary retirement Fund. Individuals residing and working in Vietnam are eligible for exemption from personal income tax on pensions paid by foreign countries.
11. Incomes from scholarships, including:
a) Scholarships granted from the state budget;
b) Scholarships granted by domestic and foreign organizations (including amounts for living expenses) under study promotion programs of those organizations.
12. Incomes from indemnities paid under life insurance policies, non-life insurance policies, compensations for labor accidents, compensations paid by the State and other compensations as provided for by law.
13. Incomes received from charity funds licensed or recognized by competent state agencies and operating for charity, humanitarian and non-profit purposes.
14. Incomes received from governmental or non-governmental foreign aid for charity or humanitarian purposes approved by competent state agencies.
The Ministry of Finance shall provide procedures and dossiers for identification of tax-exempt incomes stated in this Article.
Article 5. Tax reduction
1. Taxpayers who face difficulties caused by natural disasters, fires, accidents or severe diseases and affecting their tax payment ability may be considered for tax reduction corresponding to the extent of damage they suffer from but not exceeding payable tax amounts.
2. The Ministry of Finance shall provide procedures and dossiers for and consideration of personal income tax reduction specified in this Article.
Chapter 2.

TAXED GROUNDS FOR A NUMBER OF KINDS OF INCOME OF RESIDENT INDIVIDUALS

SECTION 1. INCOMES FROM BUSINESS ACTIVITIES AND INCOMES FROM SALARIES OR WAGES
Article 6. Taxed incomes from business activities, salaries or wages
1. Taxed incomes from business activities, salaries or wages are determined to be equal to taxable incomes from business activities, salaries or wages specified in Articles 7 and 11 of this Decree minus (-) the following amounts:
a) Premiums of social insurance, health insurance, unemployment insurance, professional liability insurance for some professions subject to compulsory insurance, voluntary retirement fund
The maximum premium level of  the voluntary retirement fund  that is deducted from taxed incomes specified in this clause does not exceed one million VND/month (12 million VND/year) in acordance with guide of the Ministry of Finance;
In case where individuals residing in Vietnam but working abroad and having incomes from business, wages, salaries abroad have participated in buying compulsory insurances as prescribed by countries where individuals pay these insurance types such as social insurance, health insurance, unemployment insurance, professional liability insurance for some professions subject to compulsory insurance, individuals are entitled to deduct these premiums in the taxable income when defining taxable incomes from business, wages, salaries.
b) Reduction based on family circumstances specified in Article 12 of this Decree;
c) Contributions to charity funds, humanitarian funds and study promotion funds specified in Article 13 of this Decree.
2. Taxed incomes of individuals who earn taxable incomes from both business activities and salaries or wages will be the total of their taxable incomes from business activities plus (+) their taxable incomes from salaries or wages minus (-) the amounts specified at Points a, b and c, Clause 1 of this Article.
Article 7. Taxable incomes from business activities
Taxable incomes from business activities are determined to be equal to turnover for calculation of taxable incomes specified in Article 8 of this Decree minus (-) reasonable expenses specified in Article 9 of this Decree.
Article 8. Turnover for calculation of taxable incomes from business activities
1. Turnover for calculation of taxable incomes from business activities means the total of sales, processing remuneration, commissions, goods or service provision charges generated in a tax period.
The time of determination of turnover is the time of transfer of ownership of goods or completion of services or the time of making goods sale or service provision invoices, regardless of whether such turnover has been collected or not.
2. In some cases, turnover for calculation of taxable incomes is specified as follows:
a) Turnover of goods sold by installment payment is determined according to selling prices of goods sold by lump-sum payment exclusive of deferred payment interest;
b) Turnover of goods or services used for exchange or donation is determined according to the selling price of the same or equivalent product, goods or service at the time of exchange or donation;
c) Turnover from goods processing means sums of money earned from processing activities, covering remuneration, costs of fuel, power and auxiliary materials and other expenses for the goods processing;
d) Turnover from lease of assets means rents periodically paid by lessees under lease contracts.  In case lessees pay rents in advance for many years, turnover for calculation of taxable incomes may be allocated to the number of years of advance rent payment or determined according to lump-sum rent payment;
e) Turnover for calculation of taxable incomes in other cases shall be specified by the Ministry of Finance.
Article 9. Reasonable expenses related to the generation of taxable incomes from business activities
1. Reasonable expenses specified in this Article must be actually paid amounts involving individuals’ production and business activities, accompanied with sufficient invoices and vouchers under law.
2. Deductible reasonable expenses include:
a) Salaries, wages, allowances, remunerations and other payments to laborers;
Salaries or wages of individuals who are heads of business households are not accounted as deductible reasonable expenses.
b) Expenses for raw materials, materials, fuels, energy and goods actually used for the production and trading of goods or provision of services related to the generation of turnover and taxable incomes in a period, which shall be calculated according to their reasonable consumption rates and actual ex-warehousing prices determined by business households or individuals themselves that shall be held responsible before law;
c) Expenses for depreciation, regular repair and maintenance of fixed assets used for the production and trading of goods or provision of services.  The fixed asset depreciation level is determined based on the value of fixed assets and depreciation duration as specified by the Ministry of Finance.
d) Paid interests on loans for production and business activities directly related to the generation of turnover and taxable incomes;
dd) Management expenses;
e) Taxes, charges, fees, land rents payable under law for production, business or service activities except for personal income tax and other taxes, charges, fees and revenues not be counted in expenses as prescribed by relevant law;
g) Other expenses related to the generation of incomes.
The Ministry of Finance shall specify other reasonable expenses which are deductible upon calculation of taxable incomes.
Article 10. Taxable incomes and taxed incomes of business individuals who fail to strictly comply with regulations on accounting, invoices and documents
1. For business individuals who fail to strictly comply with regulations on accounting, invoices and documents and cannot calculate turnover, expenses and taxable incomes, competent tax offices shall assess turnover and the ratio of taxable incomes in order to determine taxable incomes suitable to each production or business line.
2. For business individuals who may make accounting only for turnover, fail to make accounting for expenses, turnover for calculation of taxable incomes is determined according to provision in Article 8 of this Decree.  Taxable income shall be determined according to the fixed level by tax offices.
3. The Ministry of Finance shall specify determination of turnover and the determined level of taxable income on turnover.
Article 11. Taxable incomes from salaries or wages
1. Taxable incomes from salaries or wages are determined according to Clause 2, Article 3 of this Decree.
2. Time of determination of a taxable income from salary or wage is the time when an employer pays income to a taxpayer or when a taxpayer receives income.
Article 12. Reduction based on family circumstances
Resident individuals who earn incomes from salaries or wages or business activities enjoy reduction based on family circumstances from their taxable incomes before tax calculation as follows:
1. Levels of reduction based on family circumstances:
a) Level of reduction for a taxpayer himself/herself is VND 9 milion/month (which is VND 108 million/year);
b) Level of reduction for each dependant of a taxpayer is VND 3.6 million/month given from the month the taxpayer’s obligation to nurture the dependant arises.
If the National Assembly Standing Committee adjust the levels of reduction based on family circumstances as prescribed in clause 4 Article 1 of the Law amending and supplementing a number of articles of the Law on personal income tax, the levels as regulated by the National Assembly Standing Committee will be applied for the next tax period.
2. Each dependant may be counted only once for tax reduction for a taxpayer in a tax year.  In case several taxpayers share a dependant they are obliged to nurture, they shall reach agreement on registration of this dependant for family circumstance-based reduction for one among them.
3. Persons and grounds to be identified as dependants of taxpayers to have the nurture obligation specified in clause 1 this Article are as follows:
a) Under-18 children (including blood children, legally adopted children, step children of spouse);
b) Disabled children (including blood children, legally adopted children, step children of spouse) who are aged 18 years or older and incapable of working;
c) Children (including blood children, legally adopted children, step children of spouse) who are studying at universities, colleges, professional secondary schools or job-training schools, including children who are aged 18 years or older and are studying at general education level and have no income or have incomes not exceeding the level specified in Clause 4 of this Article;
d) Persons who are beyond the working age or persons who are at the working age prescribed by law but are disabled and incapable of working or have no income or have incomes not exceeding the level specified in Clause 4 of this Article, including:
– Spouses of taxpayers;
– Blood parents or stepfather, stepmother, legally adopted parents, spouse’s parents of taxpayers;
– Other helpless individuals whom taxpayers are obliged to directly nurture.
4. The income level serving as a basis for identification of dependants to be counted for reduction based on family circumstances is an average monthly income of VND 1,000,000 or less in a year from all income sources.
5. Taxpayer shall themselves declare the number of their dependants evidenced by lawful papers and be held responsible before law for the accuracy of their declaration.
6. The Ministry of Finance shall specify procedures and dossiers for declaration of dependants to be counted for reduction based on family circumstances under this Article.
Article 13. Reduction for charity or humanitarian donations
1. Resident individuals who earn incomes from business activities, salaries or wages enjoy their charity or humanitarian donations deductible from their taxable incomes, including:
a) Donations to organizations or establishments that care for or nurture children in special plights, disabled people and helpless elderly people;
b) Donations to charity funds, humanitarian funds or study promotion funds.
2. Organizations, establishments and funds specified at Points a and b, Clause 1 of this Article must be those licensed or recognized by competent state agencies and operating for charity, humanitarian, study promotion and non-profit purposes.
3. Charity or humanitarian donations made in a year are deductible from taxable incomes of that year and must not be carried forward for deduction from taxable incomes of the subsequent tax year.
Article 14. Partially progressive tariff
1. The partially progressive tariff applies to taxed incomes from business activities, salaries or wages.
2. The partially progressive tariff is specified below:

Section 2. INCOMES FROM CAPITAL TRANSFER
Article 15. Taxed incomes from transfer of contributed capital amounts
1. Taxed income from the transfer of a contributed capital amount is determined to be equal to the transfer price minus (-) the buying price of the contributed capital amount and reasonable expenses related to the generation of capital transfer income.
2. Transfer price means a sum of money receivable by an individual under a capital transfer contract.
3. Buying price of a transferred capital amount means the value of that contributed capital amount at the time of capital transfer to be equal total value of the initial contributed capital and value of the contribution or supplementation purchase times.
4. Reasonable expenses related to the generation of capital transfer income are actually paid expenses with lawful invoices and vouchers, including:
a) Expenses for completion of legal procedures necessary for the transfer;
b) Charges and fees paid by the transferor into the state budget under law;
c) Other expenses.
Article 16. Taxed incomes from securities transfer
1. A taxed income from a transfer of securities is determined to be equal to the selling price minus (-) the buying price of securities and expenses related to the transfer.
2. Selling prices of securities are determined as follows:
a) Selling prices of securities allowed trading at the Stock Exchanges are prices of actual transfers at the Stock Exchanges;
b) Selling prices of securities not falling in case specified in point a this clause are prices of actual transfers inscribed in transfer contract or prices according to accounting books of units possessing the transferred securities at time of transfer.
3. Buying prices of securities are determined as follows:
a) Buying prices of securities allowed trading at the Stock Exchanges are prices of actual purchases at the Stock Exchanges;
b) Buying prices of securities not falling in case specified in point a this clause are prices of actual purchases inscribed in transfer contract or prices according to accounting books of units possessing the transferred securities at time of purchase.
4. Expenses related to the securities transfer are actually paid expenses with lawful invoices and vouchers, including:
a) Charges for securities transfer and receipt of transferred securities;
b) Securities trust expense;
c) Other expenses.
Article 17. Tax rates
1. The tax rate for incomes from transfer of contributed capital is 20% of taxed income from each transfer.
2. The tax rate for incomes from securities transfer is 20% of taxed income of a whole year and applies only to taxpayers that have documents, can determine their taxes incomes under Article 16 of this Decree.  For taxpayers other than those specified above, the applicable tax rate is 0.l% of the price of each securities transfer.
Section 3. INCOMES FROM REAL ESTATE TRANSFER
Article 18. Taxed incomes from land use rights transfer
1. Taxed income is determined to be equal to the price of a land use right transfer minus (-) the cost price and related reasonable expenses.
2. Land use rights transfer prices are determined as follows:
a) Transfer prices are actual prices stated in transfer contracts at the time of transfer;
b) In case actual prices are unidentifiable or prices stated in transfer contracts are lower than land prices stipulated by provincial-level People’s Committees at the time of transfer, transfer prices shall be determined according to land price brackets set by provincial-level People’s Committees.
3. Land use rights transfer cost prices are determined in some specific cases as follows:
a) For land areas allocated by the State with the collection of land use levy, land use rights transfer cost prices are based on receipts of land use levy collected by the State;
b) For land areas transferred use rights from organizations and individuals, land use rights transfer cost prices are based on transfer contracts at time of receiving land use right transfer (upon buying);
c) In case of land use rights auction, land use rights transfer cost prices are winning bids;
d) For land areas with origin not falling in cases stated in points a, b and c this clause, the land use rights transfer cost prices are based on dossier of performing financial obligations with State when being granted certificate of land use rights.
4. Reasonable expenses related to the transfer of land use rights are actually paid expenses with lawful invoices and vouchers, including:
a) Charges and fees prescribed by law and related to the grant of land use rights;
b) Expenses for land revamp and ground leveling (if any);
c) Other expenses directly related to the transfer of land use rights.
Article 19. Taxed incomes from transfer of real estate being land use rights associated with construction works on land, including construction works formed in future
1. Taxed income is determined to be equal to the transfer price minus (-) the cost price and related reasonable expenses.
2. Transfer prices are specifically determined as follows:
a) Transfer prices are actual prices stated in transfer contracts at the time of transfer;
b) In case where transfer prices are not inscribed in contracts or the transfer prices inscribed in contracts are lower than the prices stipulated by provincial-level People’s Committees, transfer prices are determined as follows:
– The value of transferred land is determined according to land price brackets set by provincial-level People’s Committees at the time of transfer;
– The value of houses, infrastructure works and architectures attached to land is determined under the prices to calculate the registration fees of houses that are set by provincial-level People’s Committees.  If the provincial-level People’s Committees fail to have regulations on prices to calculate the registration fees of houses, the value is determined under the Construction Ministry’s regulations on house classification; capital construction standards and norms; the actual residual value of works on land.
For construction works formed in future, the value is determined under the rate of capital contribution on total value of contract multiplied (x) with the price to calculate the registration fee of construction works that are set by provincial-level People’s Committees.  If the provincial-level People’s Committees fail to have regulations on unit prices, the value is applied according to the capital portion of investment in works construction announced by the Ministry of Construction and being applied at time of transfer.
3. Cost prices are determined to be prices stated in transfer contracts at the time of purchase.  In cases where a real estate has no origin from receiving transfer, the cost prices are determined under the dossier of performing financial obligation with State at time of being granted certificate of ownership and use right of real estate.
4. Related reasonable expenses are actually paid expenses with lawful invoices and vouchers, including:
a) Charges and fees prescribed by law and related to the grant of land use rights;
b) Expenses for land revamp and ground leveling;
c) Expenses for repair or renovation of construction works on land;
d) Other expenses directly related to the transfer.
Article 20. Taxed incomes from transfer of the right to own or use residential houses  
1. Taxed income is determined to be equal to the selling price minus (-) the buying price and related reasonable expenses.
2. Selling prices are actual transfer prices determined according to market prices and stated in transfer contracts.
In case where a house transfer price stated in the transfer contract is lower than the price to calculate the house registration fee set by the provincial-level People’s Committees at time of transfer or the transfer price is not stated in the transfer contract, the transfer price will be determined under the price to calculate the house registration fee set by the provincial-level People’s Committees.  For transfer of residential houses formed in future, the transfer price is determined to be equal to the rate of contributed capital on total value of contract multiplied (x) with the price to calculate the house registration fee set by provincial-level People’s Committees.
3. Buying prices are determined to be those stated in purchase contracts.   For residential houses which have no origin from receiving transfer or re-purchase, the buying prices are determined under the dossier of performing financial obligation with State at time of being granted certificate of ownership and use right of residential houses.
4. Related expenses are actually paid expenses with lawful invoices and vouchers, including:
a) Charges and fees prescribed by law and related to the grant of house ownership;
b) Expenses for house repair, renovation and upgrading;
c) Other expenses directly related to the transfer of residential house.
Article 21. Taxed incomes from transfer of the right to lease land or water surface
1. Taxed income from transfer of the right to lease land or water surface is determined to be equal to the sublease rate minus (-) the lease rate and related reasonable expenses.
2. Sublease rates are determined according to actual rates stated in contracts.
In case sublease unit rates stated in contracts are lower than lease rates prescribed by provincial- level Peoples Committees by the time of sublease, rates shall be determined according to lease rate brackets set by provincial-level People’s Committees.
3. Lease rates are determined based on lease contracts.
4. Related expenses are actually paid expenses with lawful invoices and vouchers, including:
a) Charges and fees prescribed by law and related to the right to lease land or water surface;
b) Expenses for land or water surface revamp;
c) Other expenses directly related to the sublease.
Article 22. Tax rates
1. The tax rate for incomes from transfer of real estate is 25% of taxed income.
2. In case taxpayers fail to identify or fail to have dossier to determine cost prices and lawful documents for determining related expenses, which serve as a basis for determining taxed incomes, the tax rate of 2% of transfer prices is applied.
Section 4. INCOMES FROM INHERITANCES OR GIFTS
Article 23. Taxed incomes from inheritances or gifts
1. Taxed incomes from inheritances or gifts is the value of an inherited asset or a gift, including:  real estate, another asset subject to compulsory registration of ownership or use rights, including also securities or capital holding in an economic organizations or business establishments, which exceeds VND 10 million received by a taxpayer upon each time of inheritance or gift receipt.
2. The determination of taxed incomes from various inherited assets or gifts must be based on the conformity with market prices of these assets at the time of income generation, of which:
a) For securities being the inherited assets or gifts:
– Taxed incomes are determined under prices quoted at the Stock Exchanges on the date of receipt of inheritances or gifts or the preceding date;
– For securities not allowed trading at the Stock Exchanges, taxed incomes are determined under value stated in the accounting books of company having securities on the date of receipt of inheritances or gifts or the preceding date;
b) For capital holdings in economic organizations or business establishments:  The determination of taxed incomes must be based on the holding capital value stated in accounting books of these economic organizations or business establishments at the time of receipt of inheritances or gifts or the preceding date;
c) For real estate:
– The value of land is determined according to land price brackets set by provincial-level Peoples Committees by the time of receipt of inheritances or gifts;
– The value of houses, infrastructure works and architectures attached to land is determined under the prices to calculate the registration fees of houses that are set by provincial-level People’s Committees.  If the provincial-level People’s Committees fail to have regulations on prices to calculate the registration fees of houses, the determination of taxed incomes must be based on the Construction Ministry’s regulations on house classification; capital construction standards and norms; the actual residual value of works on land.
d) For other assets: The determination of taxed incomes must be based on prices of these assets or assets of the same kind (if any).
Article 24. Time of determination of taxed incomes
1. Time of determination of taxed incomes from inheritances is the time when individuals do procedures for register of the rights to own and use the inheritance assets which they have received.
2. Time of determination of taxed incomes from gifts is the time when individuals do procedures for register of the rights to own and use assets being gifts which they have received.
Article 25. Tax rates
The tax rate applicable to incomes from inheritances or gifts is 10% of taxed incomes.
Section 4. INCOMES FROM WON PRIZES
Article 26. Taxed incomes from won prizes and time of determination of taxed incomes
Taxed incomes from won prizes and time of determination of taxed incomes from won prizes shall comply with Article 15 of the Law on personal income tax. Organizations paying prizes are responsible for withholding of personal income tax from the winner before paying prizes to the individuals winning prizes. If organizations paying e-games with prizes, casino fail to identify the taxed incomes of individuals won prizes to withhold tax, these organizations shall pay tax on behalf of the won person according to the fixed level on total amounts returned to individuals.
Based on provisions of law on tax management, the Ministry of Finance shall provide the fixed level on total amounts returned to individuals specified in this Article.
Chapter 3.
POLICIES ON ADMINISTRATION OF PERSONAL INCOME TAX
Article 27. Tax registration and grant of tax identification numbers
1. Individuals having taxable incomes shall make tax registration with tax offices in order to be granted tax identification numbers for themselves and for each dependant person from whom they enjoy reduction based on family circumstances.
2. Organizations and individuals paying taxable incomes shall make tax registration with tax offices in order to be granted tax identification numbers.   In case income-paying organizations and individuals that are granted tax identification number before the effective date of this Decree may continue using these tax identification numbers.
Article 28. Tax withholding
1. Tax withholding means that income-paying organizations and individuals deduct payable tax amounts from incomes of taxpayers before paying incomes.
2. Kinds of income subject to tax withholding:
a) Incomes of non-resident individuals, including also those who are not present in Vietnam;
b) Income from salaries, wages and remunerations including remunerations from brokerage activity;
c) Incomes of individuals from operation of insurance agents, lottery agents and multi-level goods sale;
d) Incomes from capital investment;
dd) Incomes from capital transfer of non-resident individuals, transfer of securities;
e) Incomes from won prizes;
g) Incomes from copyright;
h) Incomes from commercial franchising.
3. The Finance Ministry shall specify cases subject to tax withholding and personal income tax withholding levels and methods specified in this Article.
Article 29. Cases not subject to tax withholding
1. Tax withholding does not apply to:
a) Incomes from business activities of resident individuals;
b) Incomes from real estate transfer;
c) Incomes from the contributed capital transfer of resident individuals;
d) Incomes from inheritances or gifts of individuals.
2. In the cases specified in Clause 1 of this Article, taxpayers shall declare and pay tax directly to tax offices.
Article 30. Declaration, payment and finalization of personal income tax
Income-paying organizations and individuals and implementing tax withholding, and individuals having taxable incomes as prescribed in the Law on personal income tax and Law amending and supplementing a number of articles of the Law on personal income tax shall implement tax declaration, payment and finalization as follows:
1. Monthly tax declaration and tax payment are applicable to organizations and individuals paying the incomes and implemented tax withholding for incomes specified in clause 2 Article 28 of this Decree and total monthly withheld personal income tax amount under each type of declaration is VND 50 million or more, except for case subject to the quarterly tax declaration and tax payment.
2. Quarterly tax declaration and tax payment applied to:
a) Organizations and individuals paying the incomes and implemented tax withholding for incomes specified in clause 2 Article 28 of this Decree but not subject to monthly tax declaration and tax payment specified in clause 1 of this Article.
b) Business individuals or individuals groups;
c) Incomes from wages, salaries paid from foreign countries or paid by international organizations, Embassies, Consulates in Vietnam but not yet implemented tax withholding.
3. Tax declaration and tax payment upon each time of income generation are applied to:
a) Incomes from real estate transfer;
b) Incomes from capital transfer of resident individuals;
a) Incomes from inheritances or gifts;
d) Incomes from goods production and business, and service provision of business individuals and individuals groups which have been issued retail invoices by tax offices;
dd) Incomes generated abroad of resident individuals, exclusive of incomes from wages or salaries;
e) Incomes generated in Vietnam but received abroad of non-resident individuals, exclusive of incomes from wages or salaries;
4. Annual tax declaration and tax payment: Being applied to business individuals, individuals groups that pay tax as prescribed in clause 1 Article 10 of this Decree.
5. Tax finalization
Income-paying organizations and individuals; resident individuals having incomes from wages, salaries, or business; resident individuals transferring securities and paying tax at the tax rate of 20% on income shall declare annual tax finalization, except for the following cases:
a) Individuals who have the payable tax amounts less than the tax amounts temporarily paid quarterly and not request for tax refund or tax offsetting for next period;
b) Individuals, and business households that have only one income source and have performed tax payment as prescribed in clause 1 Article 10 of this Decree;
c) Individuals, and business households that have only income from house or land use right lease,  and have performed tax payment according to declaration at place having house or land use right to lease;
d) Individuals having incomes from wages,salaries regularly generated at an unit and having additional irregular incomes at other places of which monthly average income in year does not exceed VND 10 million and having been withheld at source by the paying units,  if these individuals have no demand, it is not required to make tax finalization for these incomes;
e) Individuals having incomes from wages, salaries and having additional incomes from house or land use right lease with the monthly average turnover in year does not exceed VND 20 million and having paid tax at place having houses or land use rights for lease,  if these individuals have no demand, it is not required to make tax finalization for these incomes.
6. Individuals may delegate for income-paying units to make tax finalization on behalf of them in case these individuals have only one income source from wages, salaries generated in a unit or apart from wages, salaries generated in a unit, individuals have other additional incomes specified in points d, e clause 5 of this Article.
7. Dossiers of tax declaration, tax payment and tax finalization for cases stated in clauses 1, 2, 3, 4 and 5 of this Article shall comply with provisions of law on tax administration.
Article 31. Responsibilities of income-paying organizations, organizations where individuals transfer capitals, organizations of securities depository  and issuance, Vietnamese organizations signing contract of purchasing services of foreign contractors not operating in Vietnam for tax withholding, tax declaration and information disclosure
1. Organizations, individuals are respponsible for tax withholding when paying incomes to individuals as follows:
a) For incomes from salaries or wages paid to individuals under labor contracts: On a monthly basis, income-paying organizations and individuals that are responsible for tax withholding of each individual, based on his/her monthly taxed income, and the partially progressive tariff; temporarily-calculated reductions based on family circumstances according to declaration of taxpayer, shall calculate the payable tax in month, implement tax withholding and not required to take responsibility before law for this declaration for temporary calculation of reduction based on family circumstances.  Income-paying organizations and individuals shall implement tax declaration, tax payment into the State budget as prescribed in clauses 1, 2 Article 30 of this Decree and in accordance with law on tax administration.
b) For other wages and payments for individuals who do not enter into labor contracts:  Income-paying organizations and individuals shall temporarily withhold tax at the rate of 10% of paid incomes for individuals.  Individuals whose incomes are subject to temporary tax withholding under this Clause are not required to make monthly tax declarations.
The Ministry of Finance shall specify the income level serving as basis for tax withholding , temporary tax withholding at the rate specified in this point.
2. Securities companies, commercial banks where individuals deposit securities, organizations issuing securities are responsible for tax withholding for securities transfer at the rate of 0.1% of securities sale prices each time, including cases of tax payment at the tax rate of 20% of incomes from transfer of securities specified in clause 2 Article 17 of this Decree.
3. Enterprises where individuals hold the transferred contribution capital part are responsible for requesting individuals to supply documents of having finished the tax liability for the transferred capital part before doing procedures for changing list of members contributed capital or list of shareholders. If enterprises perform procedures for changing list of members contributed capital or list of shareholders due to capital transfer without documents proving that individuals transfering their capital have been finished their tax liability, enterprises where individuals transfer capital shall be responsible for tax payment on behalf of these individuals.
4. Organizations established and operating in accordance with Vietnamese law (hereinafter abbreviated to Vietnamese party) have entered into a contract of purchasing services of foreign contractors which have entered into labor contracts with foreigners working in Vietnam, the Vietnamese party shall be responsible for notifying the foreign contractor of obligation in personal income tax payment for these foreign employees and the responsibility for providing information about foreign employees, including:  List, nationalities, passport number, working duration, affairs and incomes to the Vietnamese party for the Vietnamese party’s provision to the tax offices within 7 days as from the  date foreign individuals begin working in Vietnam.
Article 32. Tax refund
Individuals are entitled to tax refund in cases specified in clause 2 Article 8 of the Law on personal income tax dated November 21, 2007 and they have request for tax refund.
Procedures for and dossier of tax refund shall comply with law on tax administration.
Chapter 4.

IMPLEMENTATION PROVISIONS

Article 33. Effect
1. This Decree takes effect on July 01, 2013.
2. This Decree replaces the Government’s Decree No. 100/2008/ND-CP dated September 08, 2008, detailing the implementation of a number of articles of the Law on personal income tax and Article 2 of the Government’s Decree No.  106/2010/ND-CP dated October 28, 2010, amending and supplementing a number of articles of the Government’s Decree No.  85/2007/ND-CP  dated May 25, 2007, detailing the implementation of a number of articles of the Law on Tax administration and the Decree No. 100/2008/ND-CP.
Article 34. Organization of implementation
1. The Ministry of Finance shall guide implementation of this Decree.
2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of provincial/municipal People’s Committees and relevant organizations and individuals shall implement this Decree.
 

The post Decree No. 65/2013/ND-CP of June 27, 2013, detailing a number of articles of the Law on personal income tax and Law amending and supplementing a number of articles of the Law on personal income tax appeared first on MP Law Firm.

NATIONAL ASSEMBLY
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SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
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Law No. 31/2013/QH13

Hanoi, June 19, 2013

The post Law No. 31/2013/QH13 of June 19, 2013, on amendments to the Law on value-added tax appeared first on MP Law Firm.