LEGAL UPDATES
On 4 December 2012, the Government issued Decree 103/2012/ND-CP prescribing the regional minimum salaries
for employees working for enterprises, cooperatives, cooperation teams, farms, households, individuals, agencies
and organisations (Decree 103). This replaces the prior Decree 70/2011/ND-CP.
The regional minimum salaries for the four regions are have increased by approximately 17%, and they are as follows:
- Region I:
VND 2,350,000 (increased from VND 2,000,000)
- Region II:
VND 2,100,000 (increased from VND 1,780,000)
- Region III:
VND 1,800,000 (increased from VND 1,550,000)
- Region IV:
VND 1,650,000 (increased from VND 1,400,000)
Region I includes urban districts and certain suburban districts of Ho Chi Minh City, Hanoi and Hai Phong as well as
Bien Hoa, Thu Dau Mot and Vung Tau cities.
These minimum salaries form the basis for enterprises and employees to agree on salaries. The salary paid to em-
ployees who have passed vocational training must be at least 7% higher than the minimum.
Decree 103 is stated to come into effect on 20 January 2013 but the regional minimum salaries are applicable from
1 January 2013.
( Source: PwC)
On 22 November 2012, the Law amending and supplementing a number of Articles of the Law 04/2007/QH12 on
Personal Income Tax (“PIT”) was approved by the Vietnamese National Assembly with the following major changes:
Increase of family circumstance deductions
• Personal deduction for taxpayers will increase from the current VND4mil per month to VND9mil
per month;
• Dependent deduction will increase from the current VND1.6mil per dependent per month to
VND3.6mil per dependent per month.
Private pension scheme
Contributions to a private pension scheme will be exempt from PIT up to a cap to be regulated by the Gov
ernment. Also, the monthly pension paid out of the scheme will be exempt from tax.
Tax brackets and tax rates
There are no changes.
In addition to
the aforementioned changes in the amended PIT law, we also would like to bring your
attention to some of the critical changes which have been proposed in the Draft Decree of the Government:
• Residency definition:
The current termof ninety (90) days or more of a lease contract within the tax
assessment year will increase to 183 days or more, which is in accordance with international practice;
• Income level for determining a person to be a dependant:
increase from the current VND
500,000 per month to VND1mil per month;
•Vietnamese employees who are on overseas assignments:
allowances paid by the employer for
one-offrelocationandschoolingfeesforchildrenforgenerallevelschoolingoverseaswillbeincludedin
the tax exemption list.
Effectiveness
The amended Law on PIT will be in force and effect since 1 July 2013.
New regional minimum salaries from January 2013
Update on the amended Law on Personal Income Tax
1,2,3,4,5,6,7,8 10