On 21/6/2012, Congress agreed to the Personal Income Tax (PIT) exemption for individuals who have taxable income in grade 1. This is a significant decision in a resolution to help ease the difficulties for organizations and individuals in the difficult time.
Accordingly, the individuals having a taxable income from salary or wages and from business in grade 1 (taxable income up to 5 million) will be exempted for the last 6 months of the year. Individuals that have taxable income from grade 2 to 7 are not governed in this decision.
In particular, Circular 84/2008/TT-BTC dated September 30th, 2008 regulates
Personal Income Tax (PIT) from salary or wages and from business is the total taxable income is calculated as following: for each income level is determined by the taxable income multiplication the tax rate on tariff in current Personal Income Tax Law.
Taxable income is calculated by taxable amount minus deductions such as:
– Personal relief: 4 million / month
– Personal dependent: 1,6 million /per /month
– Employee contribution: social insurance, health insurance..
– Contribution about donations to charitable, humanitarian, educational promotion
Currently, the tax rate remains the same in the PIT Tax Law:
Tariff in current Personal Income Tax Law
|
Level |
Monthly taxable income (million VND) |
Rate (%) |
|
1 |
0-5 |
5 |
|
2 |
5-10 |
10 |
|
3 |
10-18 |
15 |
|
4 |
18-32 |
20 |
|
5 |
32-52 |
25 |
|
6 |
52-80 |
30 |
|
7 |
More than 80 |
35 |
Beside, the National Assembly resolutions also decided to reduce 30% Corporate Income Tax (CIT) in 2012 for small and medium enterprises (not including lottery business enterprises, real estate, securities, finance, banking, insurance, production of goods and services subject to special income tax, 1st graded businesses, special class of economic groups, corporations).
This proposed exemption also apply to intensive labor in production, processing, agriculture, forestry, fisheries, textiles, footwear, electronics, construction of economic infrastructure – social areas.
The government also decided to extend 9 months CIT in 2011 for the above enterprises and reduce 50% of land rent in 2012 for enterprises in the field of trade and services. The investors who are encountering financial difficulties are also allowed to delay payment of land use right up to 12 months.
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