How is PIT Calculated?
- Taxable Income: Employee taxable income is determined by his/her gross income (salary, bonuses, etc.) minus allowable deductions and exemptions.
- Progressive Tax Rates: PIT is calculated using a progressive tax rate system. Here’s the current breakdown:
|
Monthly Income (VND) |
Tax Rate (%) |
|
Up to 5,000,000 |
5 |
|
5,000,001 – 10,000,000 |
10 |
|
10,000,001 – 18,000,000 |
15 |
|
18,000,001 – 32,000,000 |
20 |
|
32,000,001 – 52,000,000 |
25 |
|
52,000,001 – 80,000,000 |
30 |
| Over 80,000,000 |
35 |
Tax Year and Finalizations
- Tax Year: The tax year in Vietnam follows the calendar year (January 1st – December 31st).
- Final Tax Declaration: Employers are generally responsible for filing final tax declarations on behalf of their employees. In some cases, individuals may need to file their final declarations directly.
Non-Taxable Benefits and Income
Certain types of income and benefits may be exempt from PIT, including:
- Occupational-related allowances: Certain allowances provided for work-related purposes.
- Social Insurance, Health Insurance, and Unemployment Insurance: Contributions made to these mandatory schemes.
- Other Exemptions: Specific exemptions may apply under Vietnamese tax law. Consult a tax advisor for details.
Employer Responsibilities
- Registration: Employers must register themselves and their eligible employees with the tax authorities.
- Withholding PIT: Calculate the correct amount of PIT to withhold from each employee’s salary based on their taxable income.
- Remitting PIT: Accurately submit withheld PIT payments to the tax authorities on time.
- Record-Keeping: Employers must maintain accurate records of employee salaries, deductions, and PIT withheld.
- Year-End Finalization: File final tax declarations for employees, where applicable.
Employee Responsibilities
- Providing Accurate Information: Supply your employer with correct personal information and any relevant documentation to support deductions and exemptions you may be eligible for.
- Final Tax Declaration (If Required): Under certain circumstances, you may need to file a final tax declaration directly with the tax authorities.
Disclaimer
Tax regulations in Vietnam are subject to change. Always consult a qualified tax advisor or accountant for the most up-to-date guidance and to ensure compliance with all PIT obligations.
