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The Categories of income which are not included in the determination of an employee’s taxable personal income.

As we all know, not all workers who go to work have to pay personal income tax. Only the individual having "taxable income" should pay this tax. People having taxable income will have to declare its income in the tax period. This is called filing a personal income tax return. However, certain incomes are also exempt from personal income tax. To know what those incomes are? Follow this article by Viet Australia Auditing Ltd.

Pursuant to Clause 2, Article 2 of the consolidated document No. 68/VBHN-BTC dated December 19, 2019, incomes exempt from personal income tax include:

Employer support for critical illness, examination and treatment of the employee himself and the employee's family will not be subject to personal income tax.

- Family members of employee, in this case include: natural children, legally adopted children, illegitimate children, stepchildren of spouses, spouses, natural fathers, natural mothers, father-in-law, mother-in-law, mother-wife -in-law, father-wife -in-law, stepfather, stepmother, adoptive father, legal adoptive mother.

The level of support that is not included in taxable income is the actual amount paid in accordance with the voucher paid for hospital expenses, but must not exceed the amount that the employee and the employee's family paid after deducting the amount paid by the insurance organization.

The employer who pays for the support is responsible for keeping a copy of the medical fee payment document certified by the employer (in case the employee and the employee's family pay the rest of the payment after the insurance organization pays directly to the medical facility) or a copy of the medical fee payment receipt, a copy of the health insurance payment receipt certified by the employer (in the event the employee and the employee's relatives pay all hospital fees and the insurance organization pays the insurance premiums for the employee and the employee's relatives), together with the voucher of payment support for the employee and the employee's family member suffering from the fatal disease.

Money received according to regulations on the use of means of transport in State agencies, public non-business units, party organizations and organizations.

Amount received under the official residence regime as prescribed by law.

The Categories of income which are not included in the determination of an employee’s taxable personal income.

Amounts other than salary and wages paid for the commentary

When consulting, appraising and verifying legal documents, resolutions, political reports, participating in inspection and supervision delegations, receiving voters, receiving citizens, wearing costumes and other works. Other activities related to directly serving the activities of the Office of the National Assembly, the Ethnic Council and Committees of the National Assembly, the National Assembly Delegations, the Central Office and the Party Committees, the Office of the City Party Committee, Provincial Party Committee and the Committees of the Party Committee, Provincial Party Committee.

Money for mid-shift meals and lunch paid by the employer in the form of direct cooking, buying meals and issuing meal vouchers

In cases where the employer does not organize a mid-shift meal or lunch, but spends money on the employee, that amount is not included in the employee's taxable income if the expenditure level is consistent with the guidance of the Ministry of Labor and War Invalids and Social Affairs.

In cases where the expenditure is higher than the level guided by the Ministry of Labor, War Invalids and Social Affairs, the excess expenditure must be included in the taxable income of the employee.

- The specific level of expenditure applicable to State-owned enterprises and organizations and units under administrative and non-business agencies, the Party, organizations and associations must not exceed the guidance of the Ministry of Labor, War Invalids and Social Affairs. For non-State enterprises and other organizations, the level of expenditure shall be decided by the

The Categories of income which are not included in the determination of an employee’s taxable personal income

head of the unit in agreement with the chairman of the trade union, but the maximum shall not exceed the level applicable to State-owned enterprises.

Round-trip airfares paid by the employer for the foreign employee working in Vietnam, Vietnamese employees working abroad, on leave once a year.

- The basis for determining the airfares is the labor contract and the payment for the round-trip air ticket from Vietnam to the foreign country of nationality or the country where the foreigner's family lives; the payment for the round-trip air ticket from the country where the Vietnamese are working to Vietnam.

Tuition fees for children of foreign workers

Employers pay tuition fees for children of foreigners working in Vietnam to study in Vietnam; children of Vietnamese workers working abroad study abroad from preschool to high school.

Personal incomes received from sponsoring associations and organizations

- No personal income taxable income if the individual receiving the sponsorship is a member of an association or an organization, the funding is used from the State budget or is managed according to the State's regulations for the creation of literary and artistic works, scientific research works, etc. to perform the State's political tasks or according to an activity program in accordance with the Charter of that association or organization.

Payments paid by the employer to serve the transfer and rotation of foreign workers

Payments for the rotation of foreigners working in Vietnam, according to the provisions of the labor contract, complying with the standard working schedule according to international practices of a number of industries such as: petroleum, mining are not subject to personal income tax.

Example: + Mr. X is a foreigner who was transferred by oil and gas contractor Y to work at a drilling rig on the Vietnamese continental shelf. According to the labor contract, Mr. X's working cycle at the rig is 28 consecutive days, then he is entitled to a 28-day break. Contractor Y pays Mr. X the airfares from abroad to Vietnam and vice versa for each shift change, the cost of providing a helicopter to pick up Mr. X from mainland Vietnam to the rig and back, accommodation expenses in case Mr. X waits for the helicopter flight to take the rig to work, these amounts will not be included in Mr. X's personal income taxable income.

The amount of money paid by the organization or individual for the wedding or funeral

The amount of money paid by the organization or individual for the wedding or funeral of the employee itself and the employee's family according to the general regulations of that organization or individual and consistent with the level of determination of taxable income under the corporate income tax law, is not included in the employee's personal income taxable income.

The amount of money paid by the organization or individual for the wedding or funeral

Above are the categories of income which are not included in the determination of an employee’s taxable personal income as summarized by the Viet Australia  Auditing Ltd. We hope this information will be helpful for readers.

Công ty TNHH Kiểm toán Việt Úc - Viet Australia Auditing

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Kiểm toán Việt Úc là đơn vị chuyên nghiệp, cung cấp các dịch vụ kiểm toán, dịch vụ thuế, dịch vụ tư vấn doanh nghiệp tại Việt Nam và nước ngoài. Kiểm toán Việt Úc hội tụ các chuyên gia nhiều năm kinh nghiệm trong lĩnh vực tài chính và kiểm toán bao gồm các CPA Việt Nam, CPA Úc, và các nhân sự cấp cao từ Big4 như PwC, Deloitte...
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