Vietnam Decree on Personal Income Tax

GOVERNMENT SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
No. 100-2008-ND-CP
Hanoi, 8 September 2008

DECREE
ON
PERSONAL INCOME TAX

Making detailed provisions for implementation of the
Law on Personal Income Tax

The Government

Pursuant to the Law on Organization of the Government dated 30 September 1992;

Pursuant to the Law on Personal Income Tax dated 21 November 2007;

Pursuant to the Law on Management of Tax dated 29 November 2006;

Having considered the proposal of the Minister of Finance,

Decrees:

CHAPTER I

General Provisions

Article 1 Governing scope

This Decree provides detailed regulations on a number of articles in the Law on Personal Income Tax and
also regulates registration, declaration and finalization of personal income tax in accordance with the Law
on Management of Tax.

Article 2 Personal income taxpayers

1. Personal income taxpayers comprise both resident individuals and non-resident individuals with
taxable income as defined in article 3 of the Law on Personal Income Tax and in article 3 of this
Decree. The scope of determination of taxable income of taxpayers shall be as follows:

(a) Taxable income of a resident individual means income arising both within and outside the
territory of Vietnam, irrespective of where the income is paid.

(b) Taxable income of a non-resident individual means income arising in Vietnam, irrespective of
where the income is paid.

© Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com 1

2. Resident individual means a person satisfying one of the following conditions:

(a) Being present in Vietnam for a period of one hundred and eighty-three (183) days or more
within one western calendar year or for twelve (12) consecutive months from the first date on
which such individual is in Vietnam.

An individual who is in Vietnam as stipulated in this clause means the presence of such
individual within the territory of Vietnam.

(b) Having a regular residential location in Vietnam in one of the following cases:

- A residential location for which permanent residence has been registered pursuant to
the law on residence.

- A leased residence to stay in Vietnam pursuant to the law on residential housing, where
the lease contract has a term of ninety (90) days or more within the tax calculation year.

3. Non-resident individual means a person not satisfying the conditions stipulated in clause 2 of this
article.

Article 3 Taxable income

Taxable income of an individual comprises the following types of income:

1. Income from production and business activities, comprising:

(a) Income from production and business in goods and services in accordance with law. Income
from activities being agricultural production, forestry, salt mining, raising animals, cultivating
crops, fishing and aquaculture is only taxable when it fails to satisfy the conditions for
exemption stipulated in article 4.5 of this Decree.

(b) Income from independent professional activities of individuals with a licence or practising
certificate in accordance with law.

2. Income being salaries and wages receivable by an employee from his or her employer, comprising:

(a) Salaries and wages, and items in the nature of salaries and wages, receivable in all forms of
money or kind.

(b) Allowances and subsidies excluding allowances and subsidies stipulated by law being
preferential treatment for people with achievements, national defence and security allowances,
allowances for toxicity and danger applicable to trades or work at working locations with toxic
or dangerous elements, allowances to attract labour and regional allowances as stipulated by
law, subsidies being one-off payments for difficult situations, for employee accidents or for
occupational disease, one-off payments on the birth or adoption of a child, subsidies due to
decreased ability to work, one-off payments on retirement, monthly widows' subsidies,
retrenchment or loss of work subsidies in accordance with the Labour Code, unemployment
subsidies and other subsidies paid by the Social Insurance Fund, and subsidies [paid to
victims] to resolve crimes.

There must be regulations of a State authority on the allowances and subsidies stipulated in
this clause to be excludable from taxable income.


(c) Remuneration in all forms such as broker's commission, payment for participation in a plan or
project, royalties payments and other forms of remuneration.

(d) Money receivable from participation in business associations, on boards of management,
inspection committees, management committees, professional or other associations and other
organizations.

(dd) Benefits other than salaries and wages, in money or kind and in any form which an employer
pays to or on behalf of the taxpayer:

- Residential housing rent, power and water and associated services.

- Premiums for insurance for which the law does not require compulsory purchase by
employers for employees.

- Membership fees and other expenses for services provided to the individual on request
such as healthcare, entertainment, sports, and aesthetic [or beauty] services.

- Other benefits as stipulated by law.

(e) Bonuses, in money or kind and in any form including securities, excluding the following
bonuses:

- Monetary awards attached to emulative titles bestowed by the State including monetary
awards attached to competitions and all forms of commendations and rewards as
prescribed in the law on commendations and rewards.

- Monetary awards attached to national and international awards recognized by the State.

- Monetary awards for technical improvements, inventions and innovations recognized by
the State authorities;

- Monetary awards for detecting and reporting breaches of law to the State authorities.

3. Income from capital investments, comprising:

(a) Loan interest.

(b) Dividends.

(c) Income from capital investment in other forms including capital investment contribution in kind,
reputation, land use right, invention or patent but excluding income receivable from
Government bond interest.

4. Income from capital transfers, comprising:

(a) Income from transfer of capital portion in an economic organization.

(b) Income from transfer of securities.

(c) Income from transfer of capital in any other form.


5. Income from real property transfers, comprising:

(a) Income from transfer of a land use right and assets attached to the land.

(b) Income from transfer of ownership of or use right to a residential house.

(c) Income from transfer of a lease right to land or water surface.

(d) Any other item of income receivable from a real property transfer.

6. Income being winnings or prizes in money or kind, comprising:

(a) Lottery winnings.

(b) All forms of promotional prizes.

(c) Winnings from all forms of betting and casino gambling.

(d) Winnings from games and competitions with prizes and all others forms of winnings.

7. Income being royalties, comprising:

(a) Income from transfer of, including transfer of use rights to, objects of industrial property rights
comprising copyright, copyright related rights, industrial property rights and rights to plant
varieties.

(b) Income from technology transfer comprising technical know-how, technical knowledge,
solutions for rationalization of production and for renovation of technology.

8. Income from commercial franchises as prescribed in the Commercial Law.

9. Income from an inheritance being securities, capital portion in an economic organization or business
establishment, real property and other assets for which ownership or use rights must be registered.

10. Income from a gift being securities, capital portion in an economic organization or business
establishment, real property and other assets for which ownership or use rights must be registered.

Article 4 Income which is tax exempt:

1. Income from real property transfers as between husband and wife; as between parents and children
including foster parents and adopted children; as between parents-in-law and children-in-law; as
between grandparents and grandchildren; and as between siblings.

2. Income from transfer of a residential house or right to use residential land and the assets attached to
the land by an individual who owns only one sole residential house [and/or] residential land use right
in Vietnam.

3. Income from the value of a land use right of an individual to whom the State allocated such land
without payment of, or with reduced land use fees in accordance with law.

4. Income being receipt of an inheritance or gift of real property as between husband and wife; as
between parents and children including foster parents and adopted children; as between


parents-in-law and children-in-law; as between grandparents and grandchildren; and as between
siblings.

5. Income of a family household or individual directly engaged in agricultural production, forestry, salt
mining, raising animals, cultivating crops, fishing or aquaculture where the produce has not yet been
processed into other products or has only been preliminarily processed.

Family households and individuals directly engaged in agricultural activities as stipulated in this
clause means those who satisfy the following conditions:

(a) They have a legal land use right or water surface use right for production and they directly
participate as workers in the agricultural production, forestry, salt mining, raising animals,
cultivating crops or aquaculture. Family households and individuals engaged in fishing or
aquaculture must own or have the right to use a boat or fishing facility and directly participate
in the fishing or aquaculture.

(b) They must in fact reside, pursuant to the law on residence, in the locality where such
agricultural production, forestry, salt mining, raising animals, cultivating crops or aquaculture
takes place.

6. Income from conversion of agricultural land by a family household or individual to whom the State
allocated such land for production.

7. Income being interest on money deposited at a bank or credit institution, and income being interest
from life insurance policies.

8. Income being foreign currency remitted by overseas Vietnamese.

9. Income being that part of night shift or overtime salary payable which is higher than the day shift or
normal working hours salary stipulated by law.

10. Income being pensions paid by the Social Insurance Fund pursuant to the Law on Social Insurance.
Individuals living in Vietnam shall be exempt from tax on pensions paid by foreign [countries].

11. Income being scholarships, comprising:

(a) A scholarship received from the State Budget.

(b) A scholarship received from a domestic or foreign organization pursuant to its program to
assist and promote study.

12. Income being compensation payments from life and non-life insurance contracts, compensation for
labour accidents, State compensation payments and other compensation payments paid pursuant to
law.

13. Income receivable from charitable funds which the State authorities permit to be established or which
they recognize, and which are for charitable or humanitarian purposes and not for profit-making
purposes.

14. Income receivable from foreign aid sources for charitable or humanitarian purposes in both
Government and non-Government forms and approved by the State authorities.


The Ministry of Finance shall issue regulations on the procedures and files for determining tax
exempt income as stipulated in this article.

Article 5 Reduction of tax

1. Taxpayers who meet difficulties due to a natural disaster, fire, accident, illness or disease which
affects their ability to pay tax shall be considered for a reduction of tax corresponding to the amount
of their loss, but the reduction shall not exceed the amount of tax payable.

2. The Ministry of Finance shall provide regulations on procedures and files for reduction of personal
income tax as stipulated in this article.

CHAPTER II

Basis of Tax Assessment Applicable to A Number of Items of Income of Resident Individuals

Section 1

Business Income and Income being Salaries and Wages

Article 6 Assessable business income and assessable income being salaries and wages

1. Assessable business income and assessable income being salaries and wages shall be determined
as equal to taxable income from business and salaries and wages as stipulated in articles 7 and 11
respectively of this Decree, less the following items:

(a) Compulsory insurance premiums pursuant to law comprising social insurance, medical health
insurance, and professional indemnity insurance in those industries and business lines in
which insurance is compulsory.

(b) Deductions for family circumstances stipulated in article 12 of this Decree.

(c) Deductions for contributions to charitable and humanitarian funds and study promotional funds
stipulated in article 13 of this Decree.

2. Assessable income in the case of an individual who has both business income and also income
being salaries and wages shall be the total taxable business income plus the taxable income from
salaries and wages less the items in sub-clauses (a), (b) and (c) of clause 1 of this article.

Article 7 Taxable business income

Taxable business income shall be determined as turnover for assessing taxable income as stipulated in
article 8 of this Decree less reasonable expenses as stipulated in article 9 of this Decree.

Article 8 Turnover for assessing taxable business income

1. Turnover for assessing taxable business income means the entire monetary receipts from the sale of
goods, from processing fees, from commission and from providing goods and services and arising
within the tax calculation period.

The time for fixing turnover shall be either the time ownership of goods was transferred or provision
of services was completed on the one hand, or the time the goods sale invoice or the invoice for


provision of the services was formulated on the other hand, irrespective of whether money was
received.

2. Turnover for assessing taxable business income in a number of specific cases shall be regulated as
follows:

(a) Turnover on goods sold on instalments shall be the selling price of the goods as for a one-off
payment, excluding interest on late payments.

(b) Turnover on goods and services used for exchange or donation shall be the selling price of the
same or similar type of products, goods and services at the time of the exchange or donation.

(c) Turnover on processing goods shall be the proceeds received from such processing
comprising processing fees, fuel, power, subsidiary materials and other expenses servicing the
processing.

(d) Turnover from leasing of property shall be the amount of money which the lessee pays in each
period pursuant to the lease. If the lessee pays rent in advance for a number of years, then
turnover for the purposes of assessing taxable income shall be allocated to the number of
years for which payment was made in advance or shall be fixed in accordance with turnover as
a one-off payment.

(dd) The Ministry of Finance shall provide regulations on turnover for the purposes of assessing
taxable income in other cases.

Article 9 Reasonable expenses related to creation of taxable business income

1. Reasonable expenses as stipulated in this article means expenses actually arising and which have
adequate source vouchers and an invoice as required by law.

2. Deductible reasonable expenses shall comprise:

(a) Salaries and wages, allowances, remuneration and other expenses paid to employees. Salary
and wages of an individual head of a business household shall not constitute deductible
reasonable expenses.

(b) Cost of raw materials, supplies, fuel, power and goods actually used in production and
business in goods and services relating to the creation of turnover and taxable income in any
one period shall be calculated in accordance with reasonable levels of wear and tear and
actual ex-warehouse prices fixed by the business individual or business household itself, and
for which such individual or household shall be liable.

(c) Depreciation of, and costs for maintaining and servicing fixed assets used in production and
business in goods and services. The level of deductibility of depreciation of fixed assets shall
be determined on the basis of the value of such fixed assets and the period for which
depreciation is deductible pursuant to regulations of the Ministry of Finance.

(d) Expenses being payment of interest on loans borrowed for production and business directly
relating to creation of turnover and taxable income.

(dd) Management expenses.


(e) Taxes, fees and charges and land rent which are mandatory by law and which relate to the
production, business or service activities in accordance with law.

(f) Other expenses related to creation of income.

The Ministry of Finance shall provide regulations on other deductible reasonable expenses when
assessing taxable income.

Article 10 Taxable income and assessable income of business individuals who do not yet correctly
implement the law on accounting, invoices and source vouchers

1. In the case of business individuals who do not yet correctly implement the law on accounting,
invoices and source vouchers and for whom it is impossible to determine turnover, expenses and
taxable income, the tax office shall have authority to fix an amount of turnover and a taxable income
ratio in order to fix taxable income appropriate to each trade and line of production and business.

2. Based on the results of fixing taxable income as stipulated in clause 1 of this article, the tax office
shall decide the tax ratios of fixed turnover in accordance with the principles, order and procedures
stipulated in article 38 of the Law on Management of Tax.

Article 11 Taxable income being salaries and wages

1. Taxable income being salaries and wages shall be determined in accordance with article 3.2 of this
Decree.

2. The time for determining taxable income being salaries and wages shall be the time when the
employer pays such salary and wages to the taxpayer or the time when such income is receivable by
the taxpayer.

Article 12 Deduction for family circumstances

A resident individual with income being salaries and wages [and/or] business income shall be entitled to a
deduction for family circumstances from taxable income when assessing tax as follows:

1. Level of deduction

(a) The level of deduction applicable to taxpayers shall be forty eight million dong (48,000,000)
per year.

(b) The level of deduction for each dependant whom a taxpayer is responsible to rear or care for,
shall be one point six million (1,600,000) dong per month as from the month when such
responsibility arises.

2. Each dependant may only be assessed for deduction on one occasion in respect of one taxpayer
within the tax calculation year. If a taxpayer has a dependant in common with other taxpayers, then
all such taxpayers must agree on registration of the dependant of only one taxpayer.

3. Dependants and the grounds for determining who are dependants shall be

(a) A child under 18 years of age.

(b) A child over 18 years of age who is handicapped and unable to work.


(c) A child currently studying at a university, college, specialized secondary school or vocational
training establishment and who does not receive income or who receives income which does
not exceed the threshold stipulated in clause 4 of this article.

(d) A person above the working age, or a person still of working age as stipulated by law but who
is handicapped, unable to work, does not have income or has income which does not exceed
the threshold stipulated in clause 4 of this article, comprising:

- Spouse of the taxpayer.

- Parent or parent-in-law of the taxpayer.

- Any other feeble person whom the taxpayer must directly rear or care for.

4. The amount of income which shall be the basis for determining deduction for a dependant shall be
the average monthly income within the year from all sources of income, not to exceed five hundred
thousand (500,000) dong.

5. The taxpayer shall declare the number of his or her dependants enclosing legal documentation, and
shall be legally liable for the accuracy of his or her declaration.

6. The Ministry of Finance shall provide regulations on the procedures and files for declaration of
dependants for whom deductions may be made pursuant to this article.

Article 13 Deductions for contributions to charitable and humanitarian funds

1. A resident individual with business income [and/or] income being salaries and wages shall be entitled
to a deduction from taxable income for contributions to charitable and humanitarian funds as follows:

(a) Contributions to any institution or establishment which raises or cares for children in an
especially difficult situation, for disabled people, or for elderly feeble people.

(b) Contributions to charitable, humanitarian and study promotional funds.

2. The institutions, establishments and funds stipulated in sub-clauses (a) and (b) above must be
licensed for establishment or recognized by the State authorities, and must operate for charitable,
humanitarian or study promotional purposes and not for profit-making purposes.

3. Contributions to charitable and humanitarian funds arising in any one year shall be deductible from
taxable income of that same year and may not be carried forward to taxable income of the
subsequent tax assessment year.

Article 14 Scale of progressive tax tariff on each portion of income

1. The scale of progressive tax tariff on each portion of income shall apply to assessable business
income and assessable income being salaries and wages.


2. The scale of progressive tax tariff on each portion of income shall be as follows:

Tax Portion of Portion of Tax Rate
Bracket Annual Assessable Monthly Assessable (%)
Income Income
(million dong) (million dong)
1 Up to 60 Up to 5 5
2 Over 60 to 120 Over 5 to 10 10
3 Over 120 to 216 Over 10 to 18 15
4 Over 216 to 384 Over 18 to 32 20
5 Over 384 to 624 Over 32 to 52 25
6 Over 624 to 960 Over 52 to 80 30
7 Over 960 Over 80 35

Section 2

Income from Transfers of Capital

Article 15 Assessable income from transfer of a capital contribution portion

1. Assessable income from a transfer of a capital contribution portion shall be fixed as equal to the price
of the transfer less the purchase price of the capital contribution portion and less reasonable
expenses relating to creation of income from such transfer.

2. Price of the transfer means the amount of money receivable by the individual pursuant to the transfer
contract.

3. Purchase price of the capital contribution portion means the value of the capital portion calculated at
the time of contribution or at the time of purchase.

4. Reasonable expenses relating to creation of income from transfer of a capital contribution portion
means expenses actually arising and which have legal source documents and an invoice,
comprising:

(a) Costs of conducting the necessary legal procedures for the transfer.

(b) Fees and charges payable by the transferor to the State budget in accordance with law.

(c) Other expenses.

Article 16 Assessable income from transfer of securities

1. Assessable income from a transfer of securities, including a transfer of share options, shall be fixed
as equal to the selling price of the securities less the purchase price and less expenses relating to
the transfer.

2. Selling price of securities shall be fixed as follows:

(a) The selling price of listed securities means the actual selling price at the Stock Exchange or
Securities Trading Centre.


(b) The selling price of securities of an unlisted public company which has registered trading at a
Securities Trading Centre means the actual selling price at the Securities Trading Centre.

(c) The selling price of securities by any entity not covered by sub-clauses (a) and (b)
above means the price recorded in the transfer contract or the price in the books of account of
the entity holding such securities at the time of the sale.

3. Purchase price shall be fixed as follows:

(a) The purchase price of listed securities means the actual purchase price at the Stock Exchange
or Securities Trading Centre.

(b) The purchase price of securities of an unlisted public company which has registered trading at
a Securities Trading Centre means the actual purchase price at the Securities Trading Centre.

(c) The purchase price of securities of any entity not covered by sub-clauses (a) and (b)
above means the price recorded in the transfer contract or the price in the books of account of
the entity holding such securities at the time of the purchase.

4. Expenses relating to a transfer of securities means expenses actually arising and which have source
documents and an invoice, comprising:

(a) Fees on receipt of the transfer and on the transfer of the securities.

(b) Fees for depositing the securities,

(c) Fees for entrusting the securities.

(d) Other expenses.

Article 17 Tax rates

1. The tax rate applicable to income from transfer of a capital contribution portion shall be twenty per
cent (20%) of assessable income on each occasion of a transfer.

2. The tax rate on income from transfer of a capital contribution portion namely 20% of assessable
income for the whole year shall only apply to taxpayers who have correctly implemented the law on
accounting, invoices and source vouchers, whose income is assessable pursuant to article 16 of this
Decree, and who register with the tax office in December of the previous year to apply [this tax rate]
on a stable basis.

In other cases the tax rate of zero point one per cent (0.1%) of the price of the transfer of the
securities on each occasion shall apply.

Section 3

Income from Transfers of Real Property

Article 18 Assessable income from transfer of a land use right

1. Assessable income shall be fixed as equal to the price of the transfer less the prime cost and less
relevant reasonable expenses.


2. Price of the transfer shall be fixed as follows:

(a) The actual price of the transfer recorded in the transfer contract at the time of the transfer.

(b) If the actual price is indeterminable or if the price recorded in the transfer contract is less than
the price stipulated by the provincial people's committee at the time of such transfer, then the
price of the transfer shall be based on the List of land prices issued by the provincial people's
committee.

3. Prime cost in a transfer of a land use right shall be fixed in a number of specific cases as follows:

(a) In the case of land originally allocated [or leased] by the State with collection of land use fees
or rent, the basis shall be the vouchers collecting such land use fees or rent by the State.

(b) In the case of land for which the land use right is received from an organization or individual,
the basis shall be the contract and legal source vouchers for payment of money on receipt of
the land use right or land lease right (on purchase).

(c) In the case of auction of a land use right, the basis shall be the winning auction bid.

4. Reasonable expenses relating to the transfer means expenses actually arising and which have legal
source vouchers and an invoice, comprising:

(a) Fees and charges as stipulated by the law relating to issuance of land use rights.

(b) Costs (if any) of upgrading and levelling the surface.

(c) Other expenses directly relating to the transfer of the land use right.

Article 19 Assessable income from transfer of a land use right and buildings or engineering works on the
land

1. Assessable income shall be fixed as equal to the price of the transfer less the prime cost and less

2. Price of the transfer shall be fixed as follows:

(a) The actual price of the transfer recorded in the transfer contract at the time of the transfer.

(b) If the actual price is indeterminable, the price of the transfer shall be as follows:

- The value of the assigned land based on the List of land prices issued by the provincial
people's committee at the time of the transfer;

- The value of the house, infrastructure and buildings on the land based on regulations of
the Ministry of Construction on classification of houses, and on standards and fixed
rates for capital construction; and the actual residual value of the buildings and
engineering works on the land.

3. Prime cost shall be based on the sum recorded in the transfer contract at the time of the purchase.


4. Relevant reasonable expenses means expenses actually arising and which have valid source
vouchers and an invoice, comprising:

(a) Fees and charges as stipulated by the law relating to issuance of land use rights.

(b) Costs of land improvements and of levelling the surface.

(c) Costs of repair and upgrading the buildings and engineering works on the land.

(d) Other expenses directly relating to the transfer.

Article 20 Assessable income from transfer of ownership of or use right to a residential house

1. Assessable income shall be fixed as equal to the selling price less the purchase price and less

2. Selling price shall be the actual price of the transfer in accordance with the market price and
recorded in the contract.

3. Purchase price shall be the price recorded in the purchase contract.

4. Relevant expenses means expenses actually arising and which have legal source vouchers and an
invoice, comprising:

(a) Fees and charges as stipulated by the law relating to issuance of house ownership rights.

(b) Costs of repairing, improving and upgrading the house.

(c) Other expenses directly relating to transfer of the residential house.

Article 21 Assessable income from transfer of a lease right to land or water surfaces

1. Assessable income from a transfer of a lease right to land or a water surface shall be fixed as equal
to the price of the sub-lease less rent cost and less relevant expenses.

2. Price of the sub-lease shall be the actual price recorded in the contract.

If the unit price of the sub-lease recorded in the contract is less than the price stipulated by the
provincial people's committee at the time of the sub-lease, then such price shall be based on the List
of prices issued by the provincial people's committee.

3. Rent cost shall be based on the lease contract.

4. Relevant expenses means expenses actually arising and which have legal source vouchers and an
invoice, comprising:

(a) Fees and charges as stipulated by the law relating to rights to lease land and water surfaces.

(b) Costs of improving the land or water surface.

(c) Other expenses directly relating to the sub-lease.


Article 22 Tax rates

1. The tax rate applicable to income from a transfer of real property shall be twenty five per cent (25%)
of assessable income.

2. If the prime cost and relevant expenses as the basis for determining assessable income are
indeterminable, then the tax rate of two per cent (2%) of the price of the transfer shall apply.

Section 4

Income being Receipt of an Inheritance or Gift

Article 23 Assessable income from an inheritance or gift

1. Assessable income from an inheritance or gift means that part of the value of the inherited or
donated assets comprising real property and other assets for which the law requires ownership or
use rights to be registered including securities and capital portion in an economic organization or
business establishment which exceeds ten million (10,000,000) dong and received by the taxpayer
on each occasion.

2. Assessable income on various types of inherited or donated assets must ensure consistency with the
market price at the time the income arises, and specifically as follows:

(a) Applicable to securities

- The basis for listed securities shall be the reference price at the Stock Exchange or
Securities Trading Centre on the date of receipt of the inheritance or gift or on the most
recent date to the date of receipt.

- The basis for securities of an unlisted public company which has registered trading at a
Securities Trading Centre shall be the reference price at the Securities Trading Centre
at the time of receipt of the inheritance or gift or on the most recent date to such time.

- The basis for securities of any securities company not covered by the above shall be the
value recorded in the books of account of such company on the date of receipt of the
inheritance or gift or on the most recent date to the date of receipt.

(b) The basis for a capital portion in an economic organization or business establishment shall be
the value of the capital portion recorded in the books of account of such organization or
establishment at the time of receipt of the inheritance or gift or on the most recent date to such
time.

(c) Applicable to real property

- The value of the land based on the List of land prices issued by the provincial people's
committee at the time of receipt of the inheritance or gift.

- The value of the house, infrastructure and buildings and engineering works on the land
based on regulations of the Ministry of Construction on classification of houses, and on
standards and fixed rates for capital construction; and the actual residual value of the
buildings and engineering works on the land.


(dd) The basis for any other assets shall be the assessable price for registration of such asset or an
asset of the same type (if any).

Article 24 Point of time for determining assessable income

1. The point of time for determining assessable income from an inheritance shall be the time when the
taxpayer receives the inheritance in accordance with law.

2. The point of time for determining assessable income from a gift shall be the time when the donor
makes the gift to the taxpayer or the time when the gift is receivable by the taxpayer.

Article 25 Tax rate

The tax rate applicable to income being receipt of an inheritance or gift shall be ten per cent (10%) of the
assessable income.

CHAPTER III

Provisions on Management of Personal Income Tax

Article 26 Tax registration and issuance of tax codes

1. Individuals with taxable income shall conduct tax registration in order for the tax office to issue them
with tax codes.

2. Income-paying entities shall conduct tax registration in order for the tax office to issue them with tax
codes. Any income-paying entity already issued with a tax code prior to the date on which this
Decree takes effect shall continue to use such tax code.

Article 27 Deducting tax [at the source]

1. Deducting tax [at the source] means an income-paying entity makes a calculation and deducts the
amount of tax payable from the income of the taxpayer prior to paying such income to the taxpayer.

2. Income-paying entities shall deduct tax in the following cases:

(a) Income of non-resident individuals including those who do not have a presence in Vietnam.

(b) Income being salaries and wages.

(c) Income from capital investments.

(d) Income from capital transfers and from transfers of securities.

(dd) Income being winnings or prizes.

(e) Income being royalties.

(g) Income from commercial franchises.

3. The Ministry of Finance shall provide specific regulations on cases in which personal income tax
must be deducted as stipulated in this article, and on the methods for doing so.


Article 28 Cases in which tax shall not be deducted [at the source]

1. [Income-paying entities] shall not deduct tax in the following cases:

(a) Business income of a resident individual.

(b) Income from transfer of real property.

(c) Income from transfer of capital contribution by an individual.

(d) Income from receipt of an inheritance or a gift by an individual.

2. In the cases stipulated in clause 1 of this article, taxpayers must directly declare and pay tax to the
tax office.

Article 29 Declaration of personal income tax

1. Tax declaration by income-paying entities which must deduct tax at the source as stipulated in article
27 of this Decree shall be regulated as follows:

(a) Monthly tax declaration shall apply to the items of income stipulated in article 27.2 of this
Decree; but if the total amount to be deducted each month is less than five million (5,000,000)
dong then income-paying entities shall provisionally declare tax on a quarterly basis.

(b) Annual tax declaration

Income-paying entities shall declare and conduct annual tax finalization of taxable income, of
the amount of tax which they have deducted [at the source], and of any other deductions.

2. Tax declaration by individual taxpayers

(a) Business individuals and independent practitioners shall declare tax on a quarterly basis.

(b) A declaration shall be made on each occasion when income arises in the case of income from
capital assignments (excluding transfers of securities), income from transfers of real property,
and income being receipt of an inheritance or gift.

(c) Individuals shall make a declaration and conduct annual tax finalization in respect of income
being salaries and wages; in respect of business income when the taxpayer correctly
implements the law on accounting, invoices and source vouchers and pays tax in accordance
with the declaration; and in respect of income from transfers of securities when the taxpayer
has registered to pay tax at the 20% tax rate.

3. The Ministry of Finance shall provide specific guidelines on tax declaration and tax finalization
pursuant to this article.

Article 30 Responsibility of employers to deduct tax and declare tax on behalf of employees when paying
salaries and wages to individuals

Employers shall be responsible to deduct the tax payable [by employees] from the salaries and wages
payable by the employer to such employees, and to make a tax declaration and to pay the amount of tax
deducted into the State budget, specifically as follows:


1. On a monthly basis, an employer shall deduct tax from salaries and wages payable to each
employee pursuant to a labour contract, based on monthly assessable income, the amount of the
provisional deduction for dependants of the taxpayer, and the scale of progressive tax tariff on each
portion of income. Employees shall not be required to make a monthly tax declaration.

Also on a monthly basis, an employer shall make a provisional deduction for dependants of a
taxpayer on the basis of the declaration made by such taxpayer at the beginning of the year, and
shall then deduct tax and pay it into the State budget. Employers shall not be legally liable for this
declaration of provisional deduction for dependants.

2. With respect to other salary and wages of individuals not pursuant to labour contracts, the income-
paying entity shall make a deduction at a rate of ten per cent (10%) of the amount of income of any
individual who has a tax code number. The rate of twenty per cent (20%) shall apply to individuals
who do not have tax code numbers. Individuals with income for which a provisional deduction is
made pursuant to this clause, shall not be required to make a monthly tax declaration.

The Ministry of Finance shall issue specific regulations on the levels of income for which a
provisional deduction at the rates stipulated in this clause shall be made.

Article 31 Declaration of personal income tax by individuals with business income

1. Business individuals who correctly implement the law on accounting, invoices and source vouchers
shall:

(a) On a quarterly basis, declare tax and provisionally pay personal income tax depending on their
business results provisionally calculated on a quarterly basis. The amount of provisional tax
paid each quarter shall be determined on the basis of taxable income after making a deduction
for family circumstances of the individual taxpayer and for dependants whom the taxpayer is
responsible to rear or care for, and on the basis of the scale of progressive tax tariff on each
portion of income.

(b) Declare and conduct annual tax finalization, and be legally liable for the truthfulness and
accuracy of the data declared.

2. A determination of whether a taxpayer is a business individual shall be made in a number of specific
cases as follows:

(a) If only one person is named in the business registration, then the taxpayer shall be deemed to
be the person in whose name such business registration has been made.

(b) If a number of people are named in the business registration and jointly participate in the
business, then each member jointly participating in such name shall be deemed to be
taxpayers.

(c) If a number of people jointly participate in a family household business, then the person in
whose name the business registration was made shall be deemed to be the taxpayer. The
other members shall be deemed to be workers if they are aged fifteen (15) or more, or shall be
deemed to be dependants if they are below 15 years of age.

3. The Ministry of Finance shall issue specific regulations on tax declaration as stipulated in this article.


Article 32 Tax refund

1. An individual shall be entitled to a tax refund in the following circumstances:

(a) The amount of tax paid is more than the amount of tax payable.

(b) The amount of deductions due to family circumstances as stipulated in this article 12 of this
Decree is in fact higher than the amount of deductions made provisionally.

(c) Deductible items being charitable payments as stipulated in this article 13 of this Decree were
not in fact deducted when assessing tax.

2. The Ministry of Finance shall issue regulations on the procedures and files for tax refunds in
accordance with this article.

CHAPTER XIII

Implementing Provisions

Article 33 Effectiveness

1. This Decree shall be of full force and effect as from 1 January 2009.

2. The provisions on management of personal income tax in Chapter III of this Decree shall replace the
provisions on management of income tax applicable to high income earners in Decree 85-2007-ND-
CP of the Government dated 25 May 2007 implementing the Law on Management of Tax.

Article 34 Implementing guidelines

1. The Ministry of Finance shall provide guidelines for implementation of this Decree.

2. Ministers, heads of ministerial bodies and Government bodies and chairmen of provincial people's
committees shall be responsible for implementation of this Decree.

For the Government
Prime Minister
NGUYEN TAN DUNG


Vietnam Decree on Personal Income Tax

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