A single personal income tax law and common rates will be applied to both foreigners and Vietnamese alike, Finance Minister Vu Van Ninh said on Sept. 5. Persons earning between 4-5 million VND (250-312 USD) per month or more would be subject to the tax under the latest draft law, which has been submitted to the government for consideration, Minister Ninh said
A single personal income tax law and common rates will be applied to both foreigners and Vietnamese alike, Finance Minister Vu Van Ninh said on Sept. 5.
Persons earning between 4-5 million VND (250-312 USD) per month or more would be subject to the tax under the latest draft law, which has been submitted to the government for consideration, Minister Ninh said.
The tax would apply to both Vietnamese and foreign individuals and also to household businesses which are not currently subject to the Ordinance on Taxation of High-Income Earners. The personal income tax law would also tax interest income, capital gains, gifts and inheritances.
Ninh said that his ministry would seek public comment on the draft law before submitting it to the National Assembly in January 2009.
The issue of taxing inheritance of real estate remains controversial and the draft law stipulates that only those who already own a home and then inherit an additional house or land use rights would be required to pay tax on the additional house or land use rights.
Capital gains earned on stock trading or dividends would also be included in the definition of taxable income. However, interest earned on government bonds and treasury bills would be exempt from the tax, the ministry said, to promote this form of investment needed for national development.
The draft law for the first time introduces the concept of deductions from taxable income, Ninh said, including a deduction for a taxpayers daily living expenses and a deduction for dependents of the taxpayer equal to 30-50 percent of the taxpayers standard deduction.
The draft law caps total deductions for dependants at no more than 10 million VND per month, which is equivalent to having about five dependants.
The tax will be progressive, with higher rates applied at higher income levels. The draft law proposes eight brackets, with the tax rate increasing by five percentage points for each bracket, starting at 0 percent to 35 percent
(Source: VNA)
