01. PIT (day 1, 2) taxation - 05.2025.pptx

taxation

1. Day 1 & 2 Personal Income Tax

2. Personal Income Tax

3. What we should know by the end Scope of PIT Residence status concept Types of income Taxable income Exempt income Tax rates PIT calculation PIT administration 3

4. What is PIT? 4 Personal Income Tax A direct tax levied on the income of individuals. Serves as a tool for income redistribution among the population. Can assist in detecting and deterring illicit income

5. Legal reference 5 Law on Personal Income Tax No. 04/2007/QH11 (as amended by Law No. 26/2012/QH13 and Law No. 71/2014/QH13). Resolution No. 954/2020/UBTVQH14 dated June 2, 2020, on the adjustment of personal and dependent relief amounts. Decree No. 65/2013/ND-CP detailing several articles of the PIT Law and its amendments. Circular No. 111/2013/TT-BTC guiding the implementation of the PIT Law, its amendments, and Decree No. 65/2013/ND-CP. Key Amending Circulars to Circular No. 111/2013/TT-BTC: Circular No. 119/2014/TT-BTC Circular No. 151/2014/TT-BTC Circular No. 92/2015/TT-BTC (significant for business income) Circular No. 25/2018/TT-BTC Circular No. 80/2021/TT-BTC (significant for tax administration). Official letters and guidance issued by the Ministry of Finance (MoF), General Department of Taxation (GDT), and local tax authorities.

6. Who is subject to PIT Taxpayers include Residents and Non-residents (PIT will be different) 6 Tax res i dent Non - tax resident Subject to PIT on income earned in V i etnam and overseas ( i.e. worldwide income ) Subject to PIT only on income earned in V i etnam ( i.e . V i etnam sourced income ) It is important to determine tax residency status of a person.

7. Res i dency status OR 7 Have a regular accommodation in Vietnam Present in Vietnam from 183 days and above in : a calendar year; or 12 consecutive months Vietnamese citizens : Registered permanent address Foreign individuals : Registered address in temporary/ permanent residency card ; or Rental accommodation with accumulated rental period from 183 days in a tax year .

8. Res i dency status – Tax period First Tax Period (for individuals newly arriving in Vietnam): If present in Vietnam for 183 days or more in the first calendar year of arrival: The first tax period is that calendar year. If present in Vietnam for less than 183 days in the first calendar year, but for 183 days or more in the 12 consecutive months from the first arrival date: The first tax period is these 12 consecutive months. Subsequent Tax Periods: Following the first tax period (whether a calendar year or 12 consecutive months), subsequent tax periods are based on the calendar year . Counting Days: The arrival day and departure day are counted as one (1) day each. 8

9. Res i dency status – 1 st tax year 9 Expatriates come from the country signed DTA with VN 1 st tax year is calendar year Without signed DTA with VN 1 st tax year is from the first month of arrival to the end of the year 1 st tax year is calendar year (declaration of pre-assignment income) - 1 st tax year is 12 consecutive months from the 1 st date of arriaval - 2 nd tax year is calendar year

10. Res i dency status – Tax period example 10

11. Type of incomes subject to PIT Ten (10) types of income: ( i ) Employment income (iv) Capital investment (viii) Franchise (ii) Business income (v) Real property transfer (ix) Inheritance (iii) Capital transfer (vi) Winnings or prizes (x) Receipt of gifts (vii) Royalties Special cases PIT treatment based on residency status

12. Taxable income – tax resident 12 Type of imcome How a tax resident is taxed on that income Tax Rate (%) Business income Worldwide gross revenue from manufacturing, trading, services, and independent professional activities. 0.5% to 5% on gross revenue (if annual revenue > VND 100,) (Threshold expected to increase to VND 200m from 1 Jan 2026) Employment income Worldwide income from wages, salaries, allowances, bonuses, and benefits-in-kind. Progressive rates: 5%-35% Capital Investment Income Taxable on income including dividend, interest from the non-financial organization. 5% Capital Transfer Income Taxable on income including capital transfer, security transfer, transfer of share award and stock option - Capital contributions: 20% on net gain - Securities: 0.1% on sale proceeds

13. Taxable income – tax resident 13 Type of imcome How a tax resident is taxed on that income Tax Rate (%) Incomes from real estate transfer Sale proceeds from worldwide transfers (exemptions for certain family transfers or sole residential property). 2% on sale proceeds Prizes & Winnings Amount exceeding VND 10 million per prize/winning from worldwide sources. 10% Royalty Amount exceeding VND 10 million per payment/contract from worldwide sources (e.g., IP rights, technology transfer). 5% Incomes from franchising Amount exceeding VND 10 million per payment/contract from worldwide commercial franchises. 5% Incomes from inheritance Value exceeding VND 10 million per instance (for assets like securities, capital, real estate, vehicles, etc.). 10% Incomes from receipt of gifts Same with the receiving inheritance 10%

14. Taxable income – tax non-resident 14 Income Category Tax Rate (%) Employment Income 20% on gross income Business Income 1% - 5% on gross revenue (depending on the business activity) Capital Investment Income 5% Capital Transfer Income: - Securities Transfer 0.1% on sale proceeds - Capital Contribution Transfer 20% on net gain (if transfer of capital in a Vietnamese enterprise) Real Estate Transfer Income 2% on sale proceeds Prizes & Winnings 10% (on amount exceeding VND 10 million) Royalties 5% (on amount exceeding VND 10 million) Franchising Income 5% (on amount exceeding VND 10 million) Inheritances & Gifts 10% (on value exceeding VND 10 million for specified assets)

15. Employment income

16. PIT calculation 16 Below focuses on PIT calculation on employment income of Vietnam tax resident Tax Resident Tax Non-Resident Taxable Income Scope Worldwide employment income Vietnam-sourced employment income Tax Rates Progressive (5% to 35%) Flat rate: 20% Deductions Personal & dependent relief, compulsory insurance, qualifying donations, etc. No deductions allowed Tax Finalization Annual finalization required No annual finalization (tax withheld at source is final) PIT Formula (Taxable Income - Deductions) x Progressive Rates Taxable Income x 20%

17. Types of employment income Employment income includes, but is not limited to: Salaries, wages, and remuneration in cash or in kind. Allowances and subsidies (e.g., housing, transport, living allowances), unless specifically exempted. Remuneration received in various forms (e.g., commissions for salespersons/brokers). Income from participation in business associations, boards of directors/management, control boards, etc. Benefits paid by the employer for the employee or their dependents (cash or in-kind). Bonuses (e.g., performance, Tet/Lunar New Year bonus), except for certain state-recognized awards. Share awards / Stock options (taxed at various points depending on the scheme). Other benefits-in-kind. 17

18. Types of employment income Taxable benefits-in-kind given by employer to employee: Housing Rental Benefit: The actual rental paid by the employer, but capped at 15% of total taxable income (excluding the housing benefit itself). Utilities (electricity, water, etc.) paid by the employer are included in the rental amount for capping purposes. Life Insurance & Other Insurance with Accumulation: Premiums for life insurance or other types of insurance with savings/accumulation component paid by the employer for the employee. Membership Fees: Fees for recreational clubs (e.g., golf, sports clubs, spas) paid by the employer if the membership is in the employee's specific name. Personal Services: Costs of domestic help, personal tax consultancy fees, drivers for personal use, etc., paid by the employer. Other Allowances & Benefits: This is a broad category and can include items like company-paid overseas holidays for the employee's spouse if not directly related to business. 18

19. Income not subject to PIT Certain employment-related payments are exempt from PIT: Overtime & Night shift premiums: portion of salary/wages paid for overtime or night shift work that exceeds the normal daytime salary/wage for the same work. Hardship & hazard allowances: allowances for working in difficult, dangerous, or hazardous conditions, or in designated remote/economic zones, as stipulated by law. One-off relocation allowance: for expatriates assigned to Vietnam or Vietnamese employees assigned overseas (within prescribed limits). Severance & unemployment allowances: as per the Labor Code and social insurance regulations. Retirement pensions: paid by the Social Insurance Fund or from approved voluntary pension funds. Allowances from Social Insurance Fund: e.g., sickness, maternity benefits. Compulsory insurance contributions: employee's share of social, health, and unemployment insurance (including qualifying overseas compulsory contributions). Support for critical illness treatment: financial support from employers for employees or their dependents for treating critical illnesses (under specific conditions). 19

20. Benefits-in-kind (BIK) not subject to PIT: Mid-Shift Meals: If the employer organizes and provides meals directly to employees (e.g., canteen): Value of meals is exempt. If paid as a cash allowance: Exempt up to a prescribed limit (currently VND 730,000/month) . Annual home leave airfare: One round-trip airfare per year for expatriate tax residents working in Vietnam (or Vietnamese employees working overseas) for their annual home leave (excluding family members' tickets). School fees: for children of expatriate employees (working in Vietnam, children studying in Vietnam) or children of Vietnamese employees working overseas (children studying overseas), from kindergarten to high school, paid directly by the employer to the educational institution. Uniforms: Provided in kind: Exempt. Paid as a cash allowance: Exempt up to a prescribed limit (currently VND 5,000,000/year ). Business travel expenses: Reimbursed or covered costs for legitimate business travel (e.g., transport, accommodation for work trips). Job-related training fees: Fees for training that is directly relevant to the employee's job and improves their skills for the current role. 20 Income not subject to PIT

21. Deduction 21 Deductions Personal relief: VND11 mil/month Dependent relief: VND4.4 mil/month Voluntary pension fund within the cap VND1 mil /month Donations to qualifying charitable organizations/ funds Vietnamese /overseas compulsory insurance

22. Deduction Tax residents are entitled to the following deductions from their employment income before calculating PIT: Personal relief: VND 11,000,000 per month (VND 132,000,000 per year). Dependent relief: VND 4,400,000 per month per qualifying dependent. Compulsory Insurance Contributions: Employee's contributions to SHUI as per Vietnamese law. Includes contributions to qualifying compulsory overseas insurance schemes. Employer's contributions are not deductible by the employee. Voluntary Pension Fund Contributions: Contributions to approved voluntary pension funds, capped at VND 1,000,000 per month . Charitable, Humanitarian, and Study Promotion Donations: Donations to organizations and funds established and operating under Vietnamese law for charitable, humanitarian, or study promotion purposes. 22

23. Dependent relief Taxpayer can claim dependent relief for individuals who meet specific criteria and whose average monthly income from all sources does not exceed VND 1,000,000 . Children: Children under 18 years old (biological, legally adopted). Children 18 years or older who are disabled and unable to work. Children 18 years or older currently enrolled in university, college, vocational school, etc., with no income or average monthly income not exceeding VND 1,000,000. Spouse: Spouse outside of working age (as defined by labor law). Spouse within working age but disabled and unable to work. Parents & Parents-in-Law: (Biological parents, adoptive parents, step-parents, parents-in-law) Individuals outside of working age. Individuals within working age but disabled and unable to work. Other directly supported individuals (without their own means of support): E.g., siblings, grandparents, grandchildren, aunts, uncles, whom the taxpayer directly nurtures. Must be outside of working age or within working age but disabled and unable to work. Proof of dependency and registration with tax authorities are required. 23

24. Dependent relief One Dependent, One Taxpayer: Each qualifying dependent can only be claimed for relief by one taxpayer in a given tax year. Planning Opportunity: For example, a husband and wife must decide which one will claim dependent relief for their children. This can be a factor in PIT planning. 24

25. Net income vs Gross income NET Income Contract GROSS Income Contract Definition Income received by employee after PIT has been paid. Income received by employee before PIT is calculated. PIT responsibility The employer is responsible for paying the PIT due. The employee is responsible for paying the PIT due. Tax calculation basis Net income (plus taxable BIK) must be "grossed-up" to determine the assessable income before applying tax rates. PIT is calculated directly on the gross taxable income (after deductions) using progressive rates. Applicable Tax Rates Progressive rates (5% to 35%) applied to the grossed-up income. Progressive rates (5% to 35%) applied to taxable income.

26. Pro g ress i ve tax r ates 26 Monthly tax income (million VND) PIT rate (%) Up to 5 5 Over 5 to 10 10 Over 10 to 18 15 Over 18 to 32 20 Over 32 to 52 25 Over 52 to 80 30 Over 80 35

27. PIT calculation of Gross income Pre-tax monthly taxable income (Gross) - VND PIT payable - VND 5,000,000 and below Gross x 0.05 Above 5,000,000 to 10,000,000 (Gross x 0.1) -250,000 Above 10,000,000 to 18,000,000 (Gross x 0.15) -750,000 Above 18,000,000 to 32,000,000 (Gross x 0.2) - 1,650,000 Above 32,000,000 to 52,000,000 (Gross x 0.25) -3,250,000 Above 52,000,000 to 80,000,000 (Gross x 0.3) - 5,850,000 Above 80,000,000 (Gross x 0.35) - 9,850,000 27 GROSS

28. PIT calculation of Net income After-tax monthly taxable income (Net)-VND Pre-tax monthly taxable income (Gross)-VND 4,750,000 and below Net/0.95 Above 4,750,000 to 9,250,000 (Net-250,000)/0.9 Above 9250,000 to 16,050,000 (Net-750,000)/0.85 Above 16,050,000 to 27,250,000 (Net-1,650,000)/0.8 Above 27,250,000 to 42,250,000 (Net-3,250,000)/0.75 Above 42,250,000 to 61,850,000 (Net-5,850,000)/0.7 Above 61,850,000 (Net-9,850,000)/0.65 28 NET

29. Benefit i n k i nd and gross up 29 Gross Income: Income before deducting the individual's tax obligations. The individual bears the tax costs. Net-of-Tax Income: Income after deducting the individual's tax obligations. The employer bears the Vietnam tax costs arising from this net income. Gross-Up Requirement: If an employer pays net income and/or covers BIK, these amounts must be "grossed-up" to determine the total income assessable for PIT. Process: Start with Net Income. Add taxable BIK (e.g., housing, car for personal use – after applying any caps like the 15% for housing ). Subtract allowable deductions (personal/dependent relief, compulsory insurance). The result is the "net income after deductions" which is then grossed-up using the formulas from the previous slide. This gross-up typically increases the overall employment cost for the employer.

30. Determination of PIT for net income (exclusive of housing rental) 30 Net income (A) Deductions (B) Tax payable (E) = tax of (D) Assessable income (D) Net income after deductions (C) = (A) – (B)

31. Determination of PIT for net income (exclusive of housing rental) Ms. Lan receives a monthly net salary of VND 70,000,000 . Her employer also pays a taxable membership fee of VND 2,000,000 on her behalf. Ms. Lan contributes VND 3,150,000 for compulsory insurance (SI, HI, UI). She has 1 dependent (VND 4.4 million relief). Her employer bears all PIT. 31

32. Determination of PIT for net income (exclusive of housing rental) 32 Total Net Income & Taxable BIK: 70 (Net Salary) + 2 (Membership Fee) = 72 Total Deductions: 11 (Personal Relief) + 4.4 (Dependent Relief) + 3.15 (Insurance) = 18.55 Net Income for Grossing-Up (A): 72 - 18.55 = 53.45 Gross-Up (A) to find Assessable Income (B): Ms. Lan's income for gross-up (53.45) falls into the "Over 42.25 to 61.85" net income bracket. Assessable Income (B) = (53.45 - 5.85) / 0.70 = 47.6 / 0.70 = 68 Calculate PIT Payable on (B): Assessable income falls into the "Over 52 to 80" gross income bracket (30% rate). PIT = (68 x 30%) - 5.85 = 20.4 - 5.85 = 14.55 Total Gross Income = Net Salary + BIK + PIT = 70 + 2 + 14.55 = VND 86.55 million

33. Determination of PIT for net income (inclusive of housing rental) 33 Net income (A) Deductions (B) Assessable income (H) = Gross up of G Net income inclusive of housing rental (G) = (C)+(F) Net income after deductions (C) = (A) – (B) Grossed up income (exclusive of housing rental) (D) Taxable income for calculation of housing benefits (E)= (D) +(B) Taxable housing rental (F) = Min (E *15%, housing rental) Tax payable (I) = Tax of (H)

34. Determination of PIT for net income (inclusive of housing rental) Example 2: Same information as Example 1 Ms. Lan receives a monthly net salary of VND 70,000,000 . Her employer also pays a taxable membership fee of VND 2,000,000 on her behalf. Ms. Lan contributes VND 3,150,000 for compulsory insurance (SI, HI, UI). She has 1 dependent (VND 4.4 million relief). Additionally , her employer pays VND 15,000,000 per month for her housing rental directly to the landlord. Her employer bears all PIT. Calculate Ms. Lan's monthly PIT payable. 34

35. Determination of PIT for net income (inclusive of housing rental) 35 Step 1: Determine taxable housing benefit 1. Net Income for Grossing-Up (excluding housing benefit) - (A): Net Salary: 70 Taxable BIK (Membership Fee): 2 Personal Relief: 11 Dependent relief (1 person): 4.4 Compulsory insurance: 3.15  Net Income for Grossing-Up (A) = (70 + 2) - (11 + 4.4 + 3.15) = 53.45 2. Gross-Up (A) to find Assessable Income (excluding housing benefit) - (B): Net income for grossing-up (53.45) falls into the "Over 42.25 to 61.85" net income bracket. Assessable Income (B) = (53.45 - 5.85) / 0.70 = 68 3. Total Taxable Income (excluding housing benefit) - (C): This is the income base used to calculate the 15% housing cap. Total Taxable Income (C) = Assessable Income (B) + Deductions = 68 + 11 + 4.4 + 3.15 = 86.55 4. Determine Taxable Housing Benefit - (D): Actual Housing Rental Paid: 15 15% Cap: 15% of Total Taxable Income (C) = 15% * 86.55 = 12.9825 Taxable Housing Benefit (D) = Minimum of (Actual Housing Rental, 15% Cap) = 12.9825

36. Determination of PIT for net income (inclusive of housing rental) 36 Step 2: Calculate Final PIT Payable Final Net Income for Grossing-Up (including taxable housing benefit) - (E): Net Income for Grossing-Up (excluding housing) (from Step 1.A): 53.45 Taxable Housing Benefit (from Step 1.D): 12.9825  Final Net Income for Grossing-Up (E) = 53.45 + 12.9825 = 66.4325 Gross-Up (E) to find Final Assessable Income - (F): Final net income for grossing-up (66.4325) falls into the "Over 61.85" net income bracket. Final Assessable Income (F) = (66.4325 - 9.85) / 0.65 = 87.05 Calculate Final PIT Payable on (F): Final assessable income (87.05) falls into the "Over 80" gross income bracket (35% rate). Final PIT Payable = (87.05 * 35%) - 9.85 = 20.6175

37. Business income

38. Types of income Indiv i dual earnings income from business activ i ties such as: Product i on and trad i ng of goods/ provision of services (e.g., trader, restaurant, construction, etc.); Pract i cing cert i ficate (e.g., own l egal practice, own aud i ting practice); Rental i ncome; Ind i v i dual hav i ng bus i ness reg i stration certificates in Vietnam; If more than one parties shown i n the bus i ness registration cert i ficate (e.g. partnersh i p) , then the taxab l e income apportioned according to capital contribution or agreement basis. 38

39. Types of income 39 Exempt i on: Annual income is equal or lower than VND 100 mil. This threshold is expected to increase to VND 200 million per year effective from 01 January 2026 Agriculture, forestry, salt production, aquaculture activities that do not satisfy conditions for tax exemption. The tax exemption condition is that households and persons engaged in these activities must: Has legitimate rights to use, lease land and water surface to engage in agriculture, forestry, salt production, and fishery; and Resides in the locality where the agriculture, forestry, salt production or fishery takes place; and Raw agriculture, forestry products, salt, and fishery products are the products that are just cleaned, dried, husked, cut, salted, frozen, and put into ordinary storage.

40. PIT calculation 40 Income Resident Non-resident Business income World-wide income Flat rates No deductions No finalization PIT = Revenue * Flat tax rates Vietnam sourced income Flat rates No deductions No finalization PIT = Revenue * Flat tax rates

41. Tax rates 41 Business activities VAT (%) PIT (%) Distribution, Supply of Goods 1% 0.5% Services (excluding those below) 5% (or as applicable) 2% Construction (without supply of materials/equipment) 5% (or as applicable) 2% Manufacturing, Transport, Services with Goods 3% (or as applicable) 1.5% Construction (with supply of materials/equipment) 3% (or as applicable) 1.5% Leasing Property (e.g., houses, land, assets) 5% 5% Other Activities 2% (or as applicable) 1%

42. Other types of income

43. Tax rates and treatment Income from capital investment : Tax rate: 5% Declared at the time when the individual receives the income (each occasion basis), except for: dividend receive in form of share, bonus shares (declare when the share sold); cash dividend but re-invested to increase capital contribution (declare when capital withdrew). 43

44. Tax rates and treatment Income from transfer of capital contribution : 20% on the net gain (transfer price less purchase price less reasonable expenses) for Vietnam tax resident; 0.1% on the transfer price for Vietnam non-tax resident Declare at time of transfer procedures completed (each occasion basis). Income from transfer of securities/shares : Tax rate: 0.1% on the transfer price If listed, refer to the stock exchange selling price 44

45. Tax rates and treatment In the case of receipt of dividends paid in shares, the individual does not have to pay personal income tax upon receipt of the shares. Upon transfer of these shares, the individual must pay personal income tax on the income from capital investment and income from securities transfer. PIT on capital investment = par value of share x 5% PIT on securities transfer = selling price x 0.1% Example: Mr Nam is a shareholder of Shareholding Company X (listed on the Stock Exchange). In 2015, Mr Nam received 5,000 dividends paid in shares of Company X (the par value of each share is 10,000 dong ). In February 2017, Mr Nam transfers 2,000 shares of Company X at the price of 30,000 dong/share . In August 2017, Mr Nam transfers 7,000 shares of Company X at the price of 20,000 dong/share . Calculate total PIT amount that Mr Nam is required to pay. 45

46. Tax rates and treatment Income from transfer of property/real estate : 2% on transfer price Declared at time of transfer takes effect (e.g., contract sign date); If 2 or more owners, apportion according to their initial capital contribution ratio. 46

47. Tax rates and treatment Income from royalty : 5% on the income received in excess of VND10 million according to the transfer contract, irrespective of the number of times payment; Declare at time of the income is received. Income from franchising : 5% on the income received in excess of VND10 million according to the franchise, irrespective of the number of times payment; Declare at time of the income is received. 47

48. Tax rates and treatment Income from winnings : 10% on the income from winnings received in excess of VND10 million; Declare at time of the income is received (each occasion basis). Income from receipt of inheritance or gift : 10% on value of inherited or donated assets exceeding VND10 million; Inheritance > Declare at time when the transfer procedures is completed; Gift > Declare at time when the gift is received; To pay PIT on tax office notice, but not later than 30 days from date of receipt of tax office notice. 48

49. Exempt income

50. Exempt inc o me I ncome from transfer of property between "related persons" . Examples: Husband and wife Parents and chi l dren or adopted children Parent- i n-law and son-in- l aw or daughter-in-law Grandparents and grandchi l dren Siblings ( anh chi em ruot ) Income from transfer of residential house or right to use res i dential land and assets attached to it, where the transferor has only one sole residential house or the r i ght to use res i dential land in Vietnam . 50

51. Exempt inc o me Income being rece i pt of inheritance or gift of real estate between "related person" in item 1 in previous slide. Income of family household directly engaged in agricultural, fish in g, etc where the product has yet been processed or only been pre l i minary processed. Pensions paid by social insurance fund or overseas pension fund. Scholarship allowance. Compensation payment for claim from life or non-life insurance policies. lncome receivable from charitable or humanitarian funds, recognised by the Vietnamese Government. 51

52. PIT credit and PIT administration

53. Exc h an g e r a te u sed Computation of taxab l e i ncome must be made i n VND; The buying exchange rate issued by the bank where the taxpayer opens his/her account will be used to convert taxable income into VND, at the time of earning income. If taxpayer has no bank account in Vietnam, the Vietcombank buying exchange rate must be used. 53

54. Overseas tax credit App l icable to tax resident as they are subject to tax on both foreign/ overseas and Vietnam sourced i ncome; Tax credit i s al l owed on actual overseas tax payment but cap at V i etnamese PIT equiva l ent on such income; V i etnam's tax allocated to oversea income: Overseas income Total I ncome Total Vietnam's tax on total assessable income x

55. P IT administrat i on Tax registrat i on Reg i stration: Registering via income pay i ng entities or d i rectly with the tax authorit i es on an individual basis; Each ind i v i dual taxp a yer will have h i s/ her own tax code for income paying body declaration and fina l ization; or i ndiv i dual declaration and fina l izat i on; T i me l i ne for registration: For income paying entities registering for their staff and dependents: 10 working days from the deadline of final PIT return submission For business household/ individual: within 10 working days from the date of Business Registration Certificate 55

56. PIT administrat i on PIT declaration and PIT finalizat i on Withholding obligation The following types of income shall be subject to withholding at source by the income payers: All incomes of non-resident Employment income of residents signing labour contract with term from 3 months and longer Income from capital investment and transfer of securities, winnings, franchise and royalties Other payment to individuals who do not sign labour contract or labour contracts with term less than 3 months: when income is from VND2million and above for each payment, 10% withhold will be applied, unless the individuals confirm they have annual income less than the taxable level. Direct declaration The following cases, the individuals directly declare their PIT: Employment incomes paid from foreign organisations Business income 56

57. For employment income, tax has to be declared and paid provisionally on a monthly or quarterly (when the PIT withhold is less than VND50 million or taxpayers applying quarterly VAT declaration) basis by the 20th day of the following month or by the last day of the month following the reporting quarter, respectively. Annual final tax return must be submitted and any additional tax must be paid: Declared by the company: last day of the 3rd month from the end of the calendar year Self declared by individual: last day of the 4th month from the end of the calendar year For non-employment income : declared and tax to be paid on a receipt basis . 57 PIT administrat i on PIT declaration and PIT finalizat i on

58. Authorisation to income payers to finalise PIT For employment income , there are 02 cases the employees are allowed to authorize the employer (income payer) to perform the PIT finalization on behalf of them: Person has employment income, sign a labor contract of 3 months or more at one place and are actually working at that place at the time when the income payer performs the tax finalization (including cases of not working for 12 months of the year). 58 PIT administrat i on PIT declaration and PIT finalizat i on

59. Authorisation to income payers to finalise PIT For employment income , there are 02 cases the employees are allowed to authorize the employer (income payer) to perform the PIT finalization on behalf of them: Person has employment income, sign a labor contract of 3 months or more at one place and are actually working at that place at the time when the income payer performs the tax finalization (including cases of not working for 12 months of the year); and at the same time, has irregular income in other places with an average monthly income of no more than 10 million VND in the year and has PIT already deducted at a rate of 10%, and if there is no request for tax finalization for this income . 59 PIT administrat i on PIT declaration and PIT finalizat i on

60. 60 PIT administrat i on Allocation of PIT payment Income Allocation method PIT on incomes from salaries and wages paid at the HO to employees working at dependent units or business locations in other provinces. Taxpayers separately determine PIT amount that must be allocated to incomes from salaries and wages of individuals working in each province according to the actual tax withheld of each individual. In case the employee is transferred, rotated or seconded, based on the time of income payment and which province the employee is working in, the withheld PIT amount incurred shall be calculated for that province. PIT for income from winning of electronic lottery winners. Taxpayers (lottery companies) must allocate PIT from lottery winners to the relevant provinces: The province where the individual registered to participate in the prize (for distribution via telephone/internet), and The province where the electronic lottery tickets are issued (for distribution via terminals).

61. PIT administration Refund of PIT Can apply for PIT refund in cases : Total P I T previously paid to the tax office more than the PIT payab l e; P I T previously pa i d to the tax office; however, the taxable i ncome is less than the threshold l i mit.

62. Questions