Page 8 - VSIP News QII - 2013

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Legal Update
2 July 2013
New Decree on Personal Income Tax (“PIT”)
The Government issued Decree No. 65/2013/ND-CP (“Decree 65”) on 27 June 2013 to guide the implementation of the PIT
Law. The changes come into effect on 1 July 2013.
We outline below some key changes in relation to employment income:
1. Residency determination
The rule on 90 days or more housing lease contract has been increased to 183 days or more in determining tax residence
status of an individual.
2. Non taxable income
The following benefits/allowance are non-taxable income to foreigner working in Vietnam. These have now been
extended to Vietnamese working in overseas:
• Overseas school fees for children attending pre-school to high school level;
• One round home trip airfare per annum for employee;
• One-off relocation payment.
3. Deductions
Tax deductions are available for tax residents comprising:
• Personal relief - VND9 million per month
• Dependent relief - VND3.6 million per month per person.
Decree 65 also provides guidance on the deduction of employee’s contribution to voluntary pension scheme.
Accordingly, the employee can claim deduction of up to VND1 million/month.
4. Tax filing and administration
Quarterly declaration (instead of monthly declaration) apply to individuals filing PIT return under their individual tax code.
Taxpayers who wish to claim dependent relief are required to register and obtain tax code for their dependent(s).