Legal basic

• Law on personal income tax 2007.
• 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.
• Circular No. 111/2013/TT-BTC of August 15, 2013 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 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.
• Circular No. 25/2018/TT-BTC dated March 16, 2018 on guidelines for government’s decree No. 146/2017/ND-CP dated december 15, 2017 and amendments to some articles of the Circular No. 78/2014/TT-BTC dated June 18, 2004 of the ministry of finance and Circular No. 111/2013/TT-BTC dated August 15,2013 of the ministry of finance.   
• Circular No. 92/2015/TT-BTC dated June 15, 2015, guidelines for vat and personal income tax incurred by residents doing business, amendments to some articles on personal income tax of the Law No. 71/2014/QH13 on the amendments to tax Laws and the Government’s Decree No. 12/2015/NĐ-CP on guidelines for the Law on the amendments to tax Laws and Decrees on taxation

Regulation

According to the provisions of Article 3 of the Law on Personal Income Tax, Article 3 of Decree 65/2013/ND-CP, Article 2 of Circular 111/2013/TT-BTC on taxable incomes and incomes subject to income tax Individuals include the following types of income:

1. Incomes from business are incomes earned from the production and sale. To be specific:

• 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.
• Incomes from freelance works of individuals in the fields that are licensed or certificated as prescribed by law.
• Incomes from agriculture, forestry, salt production, and fishery that are not eligible for tax exemption according to Point e Clause 1 Article 3 of the Circular.

2. Incomes from wages and remunerations are incomes paid to employees from employers, including:

• Wages, remunerations, and the other amounts paid as wages or remunerations in cash or not in cash.
• Allowances and benefits, except for other cases
• 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 regulations of law on royalties, payments for teaching, payments for participation in artistic performance, sports, payments for advertising, payments for other services, and other remunerations.
• Payments for participation in business associations, Boards of Directors, Control Boards, project management boards, management councils, professional associations, and other organizations.
• Other benefits in cash or not in cash apart from wages paid to the taxpayer by the employer in any shape or form:
• e) Rewards in cash or not in cash in any shape or form, including rewards in the form of securities, except for other cases.

3. Incomes from capital investment are personal income in the form of:

• 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 the Circular.
• The dividends earned from capital contribution to purchase of shares.
• 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.
• The added value of capital contribution received when the enterprise is dissolved, converted, divided, split, merged, amalgamation, or upon capital withdrawal.
• 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 the Circular.
• The incomes from capital investment in other forms, including capital contribution in kind, by reputation, rights to use land, patents.
• Incomes from dividends paid in bonds, incomes from reinvested profit.

4. Incomes from capital transfer are personal income in the form of:

• 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.
• 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.
• Incomes from other forms of capital transfer.

5. Incomes from real estate transfer

• Incomes from transferring rights to use land.
• Incomes from transferring rights to use land and property on the land. Property on the land includes:
• Incomes from transferring ownership of houses, including future houses.
• Incomes from transferring rights to use land, rights to rent water surface.
• Incomes from capital investment by real estate to establish enterprises or increase capital of enterprises as prescribed by law.
• 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.
• Other incomes from real estate transfer in any shape or form.

6. Incomes from wining prizes are amounts of money or items received by the person in the form of:

• Winning lottery prizes.
• Winning prizes from promotion programs when buying products or services according to the Law on Commerce.
• Winning prizes from the types of betting permitted by law.
• Winning prizes in the casino permitted by law.
• 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 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:

• The subjects of intellectual property rights are specified in Article 3 of the Law on Intellectual property and relevant guiding documents
• Subjects of technology transfers according to Article 7 of the Law on Technology transfers

8. Incomes from franchising

9. Incomes from inheritance are the incomes the person receives under a will or in accordance with regulations of law on inheritance. To be specific:

• 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.
• 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.
• 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 off-the-plan 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.
• 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. To be specific:

• 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.
• 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.
• 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 off-the-plan 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.
• 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.

Above is our consultancy about this issue. If you need more detailed advice and answers as well as how to access this service, please contact directly the Deputy Director of Sales: Lawyer Nhat Nam via hotline: 0912.35.65.75, 0912.35.53.53 or call the free legal consultation hotline 1900.6575 or send a service request via email: lienheluathongbang@gmail.com

Wishing you and your family good health, peace and success!

Best regards!