Money is an indispensable means. Each individual earns money from different sources.

All sources of money that individuals earn are called income. We will have to pay a part to the state budget with each income, which is called Personal Income Tax.

There are two subjects that must pay personal income tax: residents and not residents in Vietnam.

Detail are as follow:

• For residents, taxable income is the income arising inside and outside the territory of Vietnam. (regardless of where the income is paid)
• For not residents, taxable income is income arising in Vietnam. (regardless of where the income is paid and received).

We learn about 10 sources of income of an individual, and how to calculate the amount of tax payable for each source.

One: Incomes from wages and remunerations

• Residents:

• Labor contracts for 03 months or longer: Apply the progressive tax table as prescribed in Circular 111 2013.
• Not sign a labor contract or labor contract for less than 03 months:

Personal income tax payable = Income over 2 million VND each time (multiplier) Tax rate 10%

• Not residents:

Personal income tax payable = Taxable income (multiplier) Tax rate 20%

Two: Incomes from business

For a business individual with an income of over 100 million VND in a year, the tax base is the taxable turnover and the percentage of tax calculated on turnover, we have the following formula:

In which:

Assessable revenue is the tax-inclusive revenue of all money received in the tax period. For example, for renting a house over 100 million a year, the tax payment rate is 10%, including 5% personal income tax, and 5% value-added tax.

The percentage is applied according to the List of assessable industries as specified in Circular No. 40 in 2021 of the Ministry of Finance:

• Percentage of personal income tax from 0.5% to 5%.
• Percentage of value added tax are 5% and 10%.

Three: Incomes from capital transfer

Personal income tax payable (=) Assessable income (x) 20%

In which: The assessable income from transferring contributed capital equals the transfer price minus the purchase price of the transferred capital and rational expenses related to the generation of the income from transferring capital.

For income from transferring securities

Personal income tax payable = Securities transfer price at a time (x) 0,1%

Four: Incomes from real estate transfer

Personal income tax payable = Transfer price (x) 2%

Five: Incomes from capital investment

Personal income tax payable = Assessable income (x) 5%.

Six and seven: Incomes from royalties and franchising

Personal income tax payable = Assessable income (x) 5%;

The assessable income from franchising is the excess over 10 million VND of income according to the transfer contract, regardless of the number of payments the taxpayer receives.

Eight, nine and ten: Incomes from winning prizes; inheritance and gifts

Personal income tax payable = Assessable income (x) 10%;

The assessable income from a prize is the excess over 10 million VND of the prize the taxpayer receives, regardless of the number of payments being made.

The assessable income from inheritance and gifts is the excess over 10 million VND of the inheritance or gifts received

In conclusion, we have learned about how to determine the amount of tax payable of 10 sources of income.