VI Every Tet holiday, companies will give their employees lucky money envelopes, so is this money subject to Personal Income Tax? Let’s find out with Pham Consult through the article below!
Who pays personal income tax?
Pursuant to Article 2 of the Personal Income Tax Law 2007 stipulates:
Taxpayers
1. Personal income tax payers are resident individuals with taxable income specified in Article 3 of this Law arising within and outside the territory of Vietnam and non-resident individuals with taxable income specified in Article 3 of this Law arising within the territory of Vietnam.
2. A resident individual is a person who meets one of the following conditions:
a) Be present in Vietnam for 183 days or more in a calendar year or 12 consecutive months from the first day of presence in Vietnam;
b) Have a permanent residence in Vietnam, including having a registered permanent residence or having a rented house to live in Vietnam under a term lease contract.
3. Non-resident individual is a person who does not meet the conditions specified in Clause 2 of this Article.
Accordingly, personal income tax payers are:
– Resident individuals with taxable income arising within and outside the territory of Vietnam and non-resident individuals with taxable income arising within the territory of Vietnam
– A resident individual is a person who meets one of the following conditions:
+ Be present in Vietnam for 183 days or more in a calendar year or 12 consecutive months from the first day of presence in Vietnam.
+ Have a permanent residence in Vietnam, including having a registered permanent residence or having a rented house to live in Vietnam under a term lease contract.
Does the company’s New Year’s lucky money for employees have to pay personal income tax?
Pursuant to Article 104 of the 2019 Labor Code stipulates:
Bonus
1. Bonus is the amount of money or property or in other forms that the employer rewards the employee based on production and business results and the level of work completion of the employee.
2. Bonus regulations are decided by the employer and publicly announced at the workplace after consulting with the employee representative organization at the grassroots level for places where there is an employee representative organization at work.
In addition, Point e, Clause 2, Article 2 of Circular 111/2013/TT-BTC stipulates:
Taxable income
…
2. Income from salaries and wages
Income from salaries and wages is the income the employee receives from the employer, including:
…
e) Cash or non-monetary bonuses of any kind, including stock bonuses, except the following bonuses:
e.1) Bonuses accompanying titles conferred by the State, including bonuses accompanying emulation titles, forms of reward according to the provisions of law on emulation and commendation, specifically :
e.1.1) Bonuses accompanied by emulation titles such as National Emulation Soldier; Emulation soldiers at the level of ministries, branches, organizations at the Central, provinces and centrally run cities; Grassroots emulation soldiers, advanced workers, advanced soldiers.
e.1.2) Bonuses accompanied by other forms of reward.
e.1.3) Bonuses accompanied by titles awarded by the State.
e.1.4) Bonuses accompanying awards given by Associations and organizations belonging to political organizations, socio-political organizations, social organizations, socio-professional organizations of central and local levels awarded in accordance with the charter of that organization and in accordance with the provisions of the Law on Emulation and Commendation.
e.1.5) Bonuses accompanying the Ho Chi Minh Prize and State Prize.
e.1.6) Bonuses accompanied by medals and badges.
e.1.7) Bonuses accompanied by Certificates of Merit.
The authority to make reward decisions, bonus levels accompanying emulation titles, and forms of reward mentioned above must be in accordance with the provisions of the Law on Emulation and Commendation.
e.2) Bonuses accompanying national awards and international awards recognized by the State of Vietnam.
e.3) Bonuses for technical improvements, inventions, and inventions recognized by competent State agencies.
e.4) Rewards for detecting and reporting violations of law to competent State agencies.
…
According to the above regulations, the company’s New Year’s lucky money is considered a bonus and this money is not included in bonuses exempt from personal income tax.
Therefore, the company’s New Year’s lucky money is an income subject to personal income tax.
What are the responsibilities of individuals with taxable income?
Pursuant to Article 24 of the 2007 Personal Income Tax Law, amended by Clause 6, Article 1 of the 2012 amended Personal Income Tax Law, stipulates:
Responsibilities of organizations and individuals paying income and responsibilities of taxpayers who are resident individuals
1. Responsibility for declaring, withholding, paying taxes and finalizing taxes is prescribed as follows:
a) Organizations and individuals paying income are responsible for declaring, deducting, paying taxes to the state budget and finalizing taxes for all types of taxable income paid to taxpayers;
b) Individuals with taxable income are responsible for declaring and paying taxes to the state budget and finalizing taxes according to the provisions of law.
2. Organizations and individuals paying income are responsible for providing information about income and dependents of taxpayers under their management according to the provisions of law.
3. The Government regulates tax deduction levels appropriate to each type of income specified in Point a, Clause 1 of this Article and tax finalization specified in Clause 1 of this Article.
Thus, the responsibilities of individuals with taxable income are:
– Declare, deduct, pay taxes to the state budget and finalize taxes for all types of taxable income paid to taxpayers;
– Declare and pay taxes to the state budget and finalize taxes according to the provisions of law.
So, through the article on Pham Consult, we have helped you learn about the issue of whether the company’s New Year’s lucky money for employees must pay Personal Income Tax or not? Hope the above information helps your work.
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