After the Government issued Decree 65/2013/ND-CP dated 27 June 2013, in order to implement regulations which are effective from 01 July 2013 of the amended Law on PIT before the issuance of a guiding Circular, the Ministry of Finance has issued Official Letter 8817/BTC-TCT dated 8 July 2013 to provide temporary guidance on implementation of the amended Law on PIT.

Below are notable changes in the amended Law on PIT, which shall be applied from 1 July 2013:

Family circumstance deductions

  • Personal deduction is increased from the current VND 4 million per month to VND 9 million per month.
  • Tax deduction for a qualified dependent increases from the current VND 1.6 million per month to VND 3.6 million per month.

Residency test

Duration of housing rental contract in Vietnam to determine tax residency increases from 90 days to 183 days, which is in line with international practice

Insurance premium

Accumulated fees for life insurance, other non-compulsory insurance contributions, and accumulated fees for voluntary pension funds purchased by the employer or contributed for employees, will not be added into periodic taxable income subject to PIT withholding of individuals. PIT on such benefits shall be withheld once the employees actually receive money on settlement from the insurance organizations;

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