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1. What is the level of personal income tax?
The level of personal income tax is the tax rate that is used for payable personal income tax. Accordingly, the tax tariffs are prescribed in Article 22, and Article 23 of the Law on Personal Income Tax 2007. In particulars: Partially progressive tariff and the whole income tariff
In particulars:
- Partially progressive tariff is applicable to a taxed income from business, salary or wage is the total of taxable incomes minus premiums of social insurance, health insurance and professional liability insurance for some professions and jobs subject to compulsory insurance and reductions...
|
Level |
Taxed income/year |
Taxed income/month |
Tax rate (%) |
|
1 |
To 60 million |
To 05 million |
5% |
|
2 |
VND 60 - 120 million |
VND 05 - 10 million |
10% |
|
3 |
VND 120 - 216 million |
VND 10 - 18 million |
15% |
|
4 |
VND 216 - 384 million |
VND 18 - 32 million |
20% |
|
5 |
VND 384 - 624 million |
VND 32 - 52 million |
25% |
|
6 |
VND 624 - 960 million |
VND 52 - 80 million |
30% |
|
7 |
Over VND 960 million/year |
Over VND 80 million/year |
35% |
Besides, the contraction method is used for tax rate calculation in personal income tax:
|
Level |
Taxed income (VND million)/month |
Tax rate (%) |
Payable tax |
|
|
Method 1 |
Method 2 |
|||
|
1 |
To VND 5 million |
5% |
VND 0 million + 5% Taxed income |
5% Taxed income |
|
2 |
VND 05 - 10 million |
10% |
VND 0.25 million + 10% Taxed income for over VND 5 million |
10% Taxed income - VND 0.25 million |
|
3 |
VND 10 - 18 million |
15% |
VND 0.75 million + 15% Taxed income for over VND 10 million |
15% Taxed income - VND 0.75 million |
|
4 |
VND 18 - 32 million |
20% |
VND 1.95 million + 20% Taxed income for over VND 18 million |
20% Taxed income - VND 1.65 million |
|
5 |
VND 32 - 52 million |
25% |
VND 4.75 million + 25% Taxed income for over VND 32 million |
25% Taxed income - VND 3.25 million |
|
6 |
VND 52 - 80 million |
30% |
VND 9.75 million + 30% Taxed income for over VND 52 million |
30 % Taxed income - VND 5.85 million |
|
7 |
Over VND 80 million |
35% |
VND 18.15 million + 35% Taxed income for over VND 80 million |
35% Taxed income - VND 9.85 million |
- Whole income tariff: Taxed incomes from capital investment, capital transfer, real estate transfer, won prizes, copyright royalties, commercial franchising, inheritances or gifts are taxable incomes. In particulars:
|
Taxed income |
Tax rate (%) |
|
From capital investment |
5% |
|
From copyright and franchising |
5% |
|
From won prizes |
10% |
|
From inheritances and gifts |
10% |
|
From capital transfer |
20% |
|
From securities transfer |
0.1% |
|
From transfer of real estate |
2% |
2. 5 levels of personal income tax tariff
In accordance with the regulations of the Law on Personal Income Tax, there are 7 levels (with a partially progressive tariff) with the tax rate from 5% to 35%.
However, this tariff is not suitable for the incomes from salaries and wages because there are many levels, and distances among levels are narrow so the incomes will be taxed.
Accordingly, there are many opinions on reducing levels of tax from 07 to 05 in the draft for the development of laws and ordinances in 2024. At the same time, widening the income gap in the levels of tax in order to create favorable conditions for tax declaration and payment.
Therefore, the application of tax levels of personal income tax is implemented in accordance with the Law on Personal Income Tax 2017 which is amended and supplemented in 2012 and other guiding documents
3. Who are the subjects of the personal income tax?
Apart from personal income tax, many people take much on the subjects of personal income tax. Accordingly, Article 2, Law on Personal Income Tax 2007 prescribes the subjects as follows:
- Personal income taxpayers include residents who earn taxable incomes inside and outside the Vietnamese territory. - Resident means a person who satisfies one of the following conditions:
+ Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of their presence in Vietnam;
Having a place of habitual residence in Vietnam: This is a registered place of permanent residence or a rented house for dwelling in Vietnam under a term rent contract.
Non-residents who earn taxable incomes inside the Vietnamese territory Non-resident means a person who does not satisfy any of the conditions.
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