Vietnam raises monthly taxable personal income threshold by 22%

With the new threshold in place, set to take effect from January 1, 2020 retrospectively, there would be more than 1 million people whose incomes are not taxable.

The Standing Committee of the National Assembly (NA) has approved the government’s proposal to raise the personal income tax threshold from VND9 million (US$389) per month to VND11 million (US$475), according to Nguyen Truong Giang, deputy chairman of the NA’s Legal Committee and deputy general secretary of the NA.

 Illustrative photo.

Additionally, the family circumstance-based deduction for each dependent of a taxpayer has also been increased from VND3.6 million (US$155.42) per month to VND4.4 million (US$189.96).

Under the existing legislation, a reduction based on family circumstances means a sum of money deductible from pre-tax income from businesses, salary or wage of resident taxpayers.

With the new threshold in place, set to take effect from January 1, 2020 retrospectively, incomes of more than 1 million people will no longer be taxable.

Giang told local media the decision was taken based on the fact that the consumer price index (CPI) rose more than 20% from July 2013 to the end of 2019.

Those having paid income tax based on the previous standard deduction would be refunded by the end of this year.

 

The NA’s Finance – Budget Committee requested the government to evaluate the impact of the Law on Personal Income Tax in the 2011 – 2020 period to further raise the tax-free threshold, given some public opinions that the VND11-million threshold remains low compared to actual living costs.

With this adjustment, an individual with income less than VND20 million (US$863.44) and one dependent would have to pay tax of VND230,000 (US$9.93), 48% less than the amount paid currently, while those with higher income would be subjected to a 7% reduction in tax amount.

In 2019, over 6.88 million people paid personal income tax of a combined VND79.2 trillion (US$3.41 billion). “The figure would be reduced to VND68.92 trillion (US$2.97 billion), down 13% year-on-year,” the Ministry of Finance estimated.

The ministry expected a higher disposable income as a result of the adjustment would encourage household consumption and spur economic growth. Hanoitimes

Ngoc Thuy

Finance Ministry plans to raise personal income tax threshold

Finance Ministry plans to raise personal income tax threshold

According to Pham Dinh Thi, director of the MOF’s Tax Policy Department, the family circumstance deductions are defined in accordance with the amended PIT (personal income tax) Law.

VN Finance Ministry urged to amend out-of-date personal income tax law

VN Finance Ministry urged to amend out-of-date personal income tax law

The consumer price index (CPI) has increased by 22 percent compared with July 2013, when the 2012 amended PIT Law took effect. However, the taxation threshold remains unchanged.

 
 

Other News

.
Alibaba.com rolls out export-focused program for Vietnamese SMEs
Alibaba.com rolls out export-focused program for Vietnamese SMEs
BUSINESSicon  07/09/2020 

Alibaba.com, the global business-to-business (B2B) e-commerce platform of Alibaba Group, has launched a landmark initiative to help businesses in Vietnam go online and reach an enormous pool of qualified global buyers.

E-commerce gives impetus to woodworking sector
E-commerce gives impetus to woodworking sector
BUSINESSicon  06/09/2020 

In the rapid development of e-commerce, online stores and factories are one of the solutions with which enterprises can cope with the prolonged Covid-19 pandemic while laying a foundation for digitalized business

The path to economic recovery and further growth
The path to economic recovery and further growth
BUSINESSicon  06/09/2020 

While Vietnam has experienced an unprecedented boom in recent decades, the current pandemic is now having a clear negative impact on the economic outlook. 

Vietnam’s plywood suppliers under scrutiny over practices
Vietnam’s plywood suppliers under scrutiny over practices
BUSINESSicon  06/09/2020 

As the trade tensions between the United States and China refuse to slow down, Vietnam-based plywood exporters are under pressure of investigation for alleged issues with the sources of their input materials.

Local wood industry overshadowed by sourcing issues
Local wood industry overshadowed by sourcing issues
BUSINESSicon  05/09/2020 

Vietnam’s wood industry has shown signs of recovery in the third quarter of 2020. However, legal complications may arise through illegally-sourced raw materials from foreign suppliers and a lack of uniformity.

Consumers beware of e-swindlers preying on fledgling cashback apps
Consumers beware of e-swindlers preying on fledgling cashback apps
BUSINESSicon  06/09/2020 

While cashback is considered a strong method to encourage cashless payments, numerous websites and apps are taking advantage of uninformed consumers with untransparent and illegal multi-level marketing models.

One fewer thing to worry for enterprises
One fewer thing to worry for enterprises
BUSINESSicon  06/09/2020 

Businesses will have one fewer thing to worry about in 2021 as the minimum wage is not expected to be increased for privately-owned enterprises.

New strategies required to set deeper roots for wood industry
New strategies required to set deeper roots for wood industry
BUSINESSicon  06/09/2020 

To expand Vietnam’s wood industry sustainably, its development strategy must not only focus on the policies of importing countries but also domestic priorities.

Airline service fees reduced by half for next six months
Airline service fees reduced by half for next six months
BUSINESSicon  05/09/2020 

Fees for takeoff and landing and aircraft operating services for domestic flights will continue to be cut by 50 per cent for the next six months to support airlines affected by the COVID-19 pandemic, according to a Transport Ministry circular.

Funds enjoy growth in August
Funds enjoy growth in August
BUSINESSicon  05/09/2020 

Investment funds involved in Vietnam’s equity market reported positive growth in net asset value (NAV) in August due to a stock market upturn.

Vietnam aims to diversify local retail market
Vietnam aims to diversify local retail market
BUSINESSicon  05/09/2020 

The Ministry of Industry and Trade (MoIT) plans to consolidate traditional markets in rural areas while developing a large number of convenience stores and diversifying types and methods of modern business.

8-month trade surplus at record high, experts warn of risks
8-month trade surplus at record high, experts warn of risks
BUSINESSicon  05/09/2020 

Vietnam's trade surplus in the first eight months of the year was a record high. However, experts still see risks.

90 percent of Vietnamese millionaires invest in real estate
90 percent of Vietnamese millionaires invest in real estate
BUSINESSicon  04/09/2020 

While COVID-19 continues to impact the whole economy, most millionaires in Vietnam have been investing in the real estate market.

Vietnam retaining fast-growing status
Vietnam retaining fast-growing status
BUSINESSicon  04/09/2020 

Over past decades, Vietnam has weathered all difficulties to orchestrate economic miracles, with its deepened international integration bringing about massive opportunities to expand trade and investment.

Tough spot for steel ventures as pandemic cuts off progress
Tough spot for steel ventures as pandemic cuts off progress
BUSINESSicon  04/09/2020 

The global coronavirus developments coupled with the falling demand are adding more pressure for some steelmakers to lay idle their projects, cut products, or ponder mergers and acquisitions strategies to ensure their cash.

Corporate bond issuance expected to drop after new policies take effect
Corporate bond issuance expected to drop after new policies take effect
BUSINESSicon  04/09/2020 

Warnings from management agencies plus new policies that take effect soon will make it more difficult to issue corporate bonds, a capital mobilization channel that was worth $8.5 billion in the first seven months of the year.

Selling assets to pay debts, 'Boss Duc' still cannot escape difficulties
Selling assets to pay debts, 'Boss Duc' still cannot escape difficulties
BUSINESSicon  04/09/2020 

The enterprise of Doan Nguyen Duc, or Boss Duc as he is known, is still in doubt, though the businessman, once the richest man in Vietnam, has sold many assets to restructure his company.

Foreign tech firms eye big investments in VN
Foreign tech firms eye big investments in VN
BUSINESSicon  05/09/2020 

More tech could be coming to Vietnam soon as foreign enterprises demonstrate an appreciation for the country's attractive investment environment.

Anti-dumping lawsuits looming over exporters
Anti-dumping lawsuits looming over exporters
BUSINESSicon  03/09/2020 

Trade protectionism is on the rise around the world, as governments attempt to limit the economic damage from the coronavirus pandemic.

VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 5
VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 5
BUSINESSicon  05/09/2020 

Steelmakers urge import protection

 
 
 
Leave your comment on an article

OR QUICK LOGIN