TAX REGULATION

FA Department31 Oct 2008

Content

1. Introduction of new regulation for PIT (Personal income tax)

2. The main points

2.1 PIT for Staff and BM

2.2 PIT for Agent 3. Planning

1. Introduce new Tax regulation

PIT Decree No. 04/2007/QH12 Date 21 Nov 2007 

Circular No. 84/2008/TT-BTC Date 30 Oct 2008

Effective on 1 Jan 2009

2. The main points _PIT

Non-resident: <183 daysTax rate :25% Resident :>=183 daysTax rate

Non-resident: <183 daysTax rate: 20%Resident :>=183 daysTax rate

Income being salaries and wages (employment)

Other

Income being salaries and wages (employment) and

Business income (House hold)

Other (Include Investment income)

a. Resident & Non resident individuals

b. PIT on income from employment and non-employment

Current regulation New regulation

2. The main points _PIT

Tax rate for employee & BM(Expatiate and local employee)

Current regulation(Local employee)

New regulation(Local & expatiate employee)

(Income accessible monthly) (Income accessible monthly)

To 5 mil 0% To 5 mil 5%

Over 5 to 15 mil 10% Over 5 to 10 mil 10%

    Over 10 to 18 mil 15%

Over 15 to 25 mil 20% Over 18 to 32 mil 20%

    Over 32 to 52 mil 25%

Over 25 to 40 mil 30% Over 52 to 80 mil 30%

    Over 80 mil 35%

Over 40 mil 40%    

2. The main points _PIT

Tax rate for employee & BM(Expatiate and local employee)

Current regulation(Expatiate employee)

New regulation(Local & expatiate employee)

(Income accessible monthly) (Income accessible monthly)

To 5 mil 0% To 5 mil 5%

Over 8 to 20 mil 10% Over 5 to 10 mil 10%

    Over 10 to 18 mil 15%

Over 20 to 50 mil 20% Over 18 to 32 mil 20%

    Over 32 to 52 mil 25%

Over 50 to 80 mil 30% Over 52 to 80 mil 30%

    Over 80 mil 35%

Over 80 mil 40%    

2. The main points _PIT

PIT for employee & BM

.Overtime incomeThe higher of payment over time and normal working hour salary

Current regulation New regulation

• Accommodation higher than 15% on salary

• Tuition fees for expatriate employees’ children

• Airfares for expatriate employees’ home leave

Not mentioned in new regulation means

These are taxable income for PIT

d. Income subjected PIT

e. Income exempted for PIT

.•Taxpayers: 4 mil VND/month•Dependant: 1.6 mil VND/month/each

c. Deduction for family circumstances

2. The main points _PIT PIT for Agent

Corporate income tax (CIT) : 5%

Agent income without employment contract such as agent 10% if they have tax code or20% if they do not have tax code

Current regulation New regulation

f. PIT for non-employment such as Agent tax

2. The main points _PIT

PIT for Other

•Either 0.1% on sale price or 20% on profit

If 20% on profit

•Monthly PIT withholding 0.1% on sale price •Tax finalization at 20% on profit by individual

g. PIT for non-employment such as income form sale securities

Current regulation New regulation

3. Planning

1- Inform to staff and agent the new regulation

PIT for Employee • Register dependants to Company• Submit document related dependants

PIT for Agent• Agent register tax code

• 10% if agent have tax code, otherwise 20% (on income >VND 500,000)

• Company issue tax withholding letter and sent to agent

• Agent do tax finalization at year end

3. Planning

2- Prepare system support

HR • Update new tax rate• Record employee ‘s dependant information for tax deduction

Agency admin

• Request system modify 2 tax rates : 10% and 20%• Record agent information such agent tax code, Tax registered date• Prepare system for printing tax withholding letter

3. Planning

3- Prepare administration work

HR • Collect documents, check and submit to Tax department• Do tax finalization for employment at year end • Do PIT tax report

Agency admin

• Collect documents, check and submit to Tax department• Do PIT tax report

FA• Coordinate with departments to update new regulation

Thank you