Decree 65/2013/ND-CP detailing several articles of the Personal Income Tax Law and the Law Amending and Supplementing Several Articles of the Personal Income Tax Law

Decree 65/2013/ND-CP, issued by the Government on 27 June 2013, provides detailed implementation of the Personal Income Tax Law of 2007 and its 2012 amending law. It is a core reference for personal income tax calculations on wages and salaries, defining taxpayers, residency, and the scope of taxable income. Taxpayers comprise resident and non-resident individuals with taxable income. For residents, taxable income covers income arising inside and outside Vietnam regardless of where it is paid; for non-residents, only income arising in Vietnam. An individual is a resident if present in Vietnam for at least 183 days in a calendar year or in 12 consecutive months from first arrival, or if having a regular residence in Vietnam through registered permanent residence or a housing lease of at least 183 days in the tax year; a person with a regular residence but present under 183 days who cannot prove tax residence elsewhere is treated as a Vietnamese resident. The Decree enumerates categories of taxable income, including business income and income from wages and salaries. Wage and salary income includes salaries, wages, and items of a wage nature received in cash or in kind; allowances and subsidies except listed exempt ones such as merit-based and veteran allowances, defence and security allowances, hazardous-work allowances, attraction and regional allowances, and statutory severance, job-loss, unemployment, and one-time retirement allowances under the Labour Code and Social Insurance Law; remuneration such as brokerage commissions and royalties; payments for serving on boards and associations; and non-wage benefits provided by the employer, such as housing, electricity, water, accumulated premiums on life and non-compulsory insurance, and voluntary pension fund contributions. For accumulated premiums and voluntary pension contributions that the employer buys or pays for the employee, the insurer or pension fund manager must withhold tax at 10 percent on the employer-funded accumulated portion before paying out, applicable from 1 July 2013. Bonuses are generally taxable except specified state honours, national and recognized international awards, technical-innovation and invention awards, and rewards for reporting legal violations. The Decree also lists items excluded from taxable wage income, such as employer support for treatment of dangerous diseases for the employee and immediate family, official-vehicle and public-housing arrangements, mid-shift meal allowances within the limit set by the Ministry of Labour, Invalids and Social Affairs, certain round-trip airfares for foreign and overseas-working employees, and tuition for employees' children at defined school levels. Income from capital investment, including loan interest and dividends, is also taxable. These definitions of residency, taxable wage income, exempt allowances, and the 10 percent withholding on employer-funded insurance accumulations directly shape personal income tax base computations.