ARE TET BONUS, 13th MONTH BONUS SUBJECT TO PERSONAL INCOME TAX?
Article 3, Personal Income Tax Act stipulates that the taxable income includes allowances, subsidies, and bonuses… Therefore, Tet bonuses must also pay PIT similar to monthly wages.
With the 13th month bonus, currently there is no law covering this matter. This is considered a bonus at the end of the year, which is determined by the businesses themselves in accordance with the bonus policy, the labor contracts, or based on profits that businesses enjoy…
Tet bonus and 13th month bonus are also subject to deduction policies such as dependents, family circumstances deductions… Whenever income is generated, individuals must pay PIT (except for cases exempted in according with regulations) under the law.
4 BONUSES NOT SUBJECT TO PERSONAL INCOME TAX
Point e, Clause 2, Article 2 of Circular 111/2013/TT-BTC stipulates that the following bonuses are not subject to personal income tax:
Firstly, bonuses allotted with awards conferred by the State, including bonuses allotted with decorations and other forms of accolades in accordance with the Law on Decorations and Accolades, including:
– Bonuses with decorations such as: State Exemplar in Productivity; Exemplar at the ministerial, branch, and organizational levels, or at the provincial and municipal levels; Exemplar of grassroots organizations, Model compatriot award, Model laborer award.
– Bonuses with other forms of rewards.
– Bonuses with accolades conferred by the State.
-Bonuses with prizes awarded by political associations and organizations, socio-political organizations, social organizations, socio-professional organizations of the central and local governments in accordance with the charter of that organization and in accordance with the provisions of the Law on Decorations and Accolades.
– Bonus allotted with the Ho Chi Minh Award or any State Award.
– Bonuses with Medals or Badges.
– Bonuses with Certificates of Merit.
Second, bonuses that are allotted with national and international awards recognized by the Socialist Republic of Vietnam.
Third, bonuses for technical improvements, innovations and inventions recognized by competent state agencies.
Fourth, bonuses for detecting and reporting violations of the law to competent state agencies.
Bonuses that do not fall into any of the above 4 categories are subject to personal income tax for individuals generating income.