– Pursuant to Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance guiding the implementation of the Law on Personal Income Tax, the Law amending and supplementing a number of articles of the Law on Personal Income Tax and Decree No. 65/2013/ND-CP of the Government detailing a number of articles of the Law on Personal Income Tax and the Law amending and supplementing a number of articles of the Law on Personal Income Tax:
+ Clause 2, Article 2 stipulates incomes from wages and remunerations:
“2. Incomes from wages and remunerations
Incomes from wages and remunerations (hereinafter referred to as wages) are incomes paid to employees from employers, including:
a) Wages, remunerations, and the other amounts paid as wages or remunerations in cash or not in cash.
dd) Other benefits in cash or not in cash apart from wages paid to the taxpayer by the employer in any shape or form:
…dd.7) Other benefits.
Other benefits paid to employees by the employers such as: payments during leave period or public holidays; payment for counseling, tax statement services for a particular person or group of people; payment for domestic servants such as driver, cook, and other domestic servants that work under contracts, etc.”
+ Clause 10, Article 2 stipulates incomes from receipt of gifts:
“10. Incomes from receipt of gifts
Incomes from receipt of gifts are incomes the person receives from organizations and individuals at home and overseas. To be specific:
a) Gifts being securities: shares, call options on shares, bonds, treasury bills, fund certificates, and other securities according to the Law on Securities; shares of the person in the joint-stock company according to the Law on Enterprises.
b) Gifts being capital in economic organizations and businesses: capital contribution to limited liability companies, cooperatives, partnerships, business cooperation contracts; capital in private enterprises and businesses of the person; capital in associations and funds established within the law, or the entire business if the private enterprise or business is under the ownership of the person.
c) Gift being real estate: rights to use land, rights to use land and property thereon; ownership of houses, including future houses, infrastructure and constructions on land, including off-the-plan constructions; rights to rent land or water surface; other incomes from inheritance being real estate in any shape or form, except for incomes from the gifts being real estate mentioned in Point d Clause 1 Article 3 of this Circular.
d) The ownership and use rights of gifts being other assets (cars, motorbikes, ships, barges, speedboats, towboats, yachts, airplanes, hunting guns, sporting guns) must be registered with state agencies.”
Based on the above regulations, refer to the following:
In case the Company gives gifts to employees but the gifts do not fall under the provisions of Clause 10, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance, they are not subject to personal income tax from receipt of gifts.
In case the Company pays monetary or non-monetary benefits in the nature of wages and remunerations to employees, they shall be included in the taxable income from wages and remunerations for employees according to the provisions of Clause 2, Article 2, Circular 111/2013/TT-BTC.