Ordinance No. 14/2004/PL-UBTVQH11 Amending and Supplementing Certain Articles of the Ordinance on Income Tax for High-Income Individuals

ORDINANCE

Amending and supplementing certain Articles of

Ordinance on Income Tax for High-Income Individuals

Pursuant to the Constitution of the Socialist Republic of Vietnam in 1992, amended and supplemented by Resolution No. 51/2001/QH10 dated December 25, 2001 of the National Assembly, tenth session;

Pursuant to Resolution No. 17/2003/QH11 dated November 4, 2003 of the National Assembly, tenth session, fourth meeting, concerning the state budget estimate for 2004;

This Ordinance amends and supplements certain provisions of the Ordinance on Income Tax for High-Income Individuals which was adopted by the Standing Committee of the National Assembly on May 19, 2001,

Article 1.

Amending and supplementing certain provisions of the Ordinance on Income Tax for High-Income Individuals:

1. Clause 2 shall be amended and supplemented as follows:

"Article 2

The taxable income includes:
1. Regular income in the form of salaries, wages, allowances, bonuses; income from scientific and technical services, copyright usage fees for inventions, trademarks, information technology services, consulting services, training services, agency services; royalties; commissions; other income outside salaries and wages from participating in production, business, and service activities not subject to corporate income tax, except for the income specified in Article 3 of this Ordinance;
2. Irregular income in the form of:

a) Technology transfer, except in cases of gifts or donations;

b) Lottery winnings."

2. Article 3 shall be amended and supplemented as follows:

"Article 3
1. Temporary exemption from taxation on interest income from bank deposits, savings accounts, purchase of treasury bills, bonds, promissory notes, stocks.
2. Non-taxable income includes:
a) Travel allowances; hazardous duty allowances; regional allowances; seniority allowances for military personnel, customs officers, and telegraph operators; position allowances; responsibility allowances for civil servants; special allowances for some remote islands and border areas with particularly difficult living conditions; attraction allowances; travel expenses; food allowances, special allowances for certain industries and professions according to State regulations; other allowances from the State budget;
b) Awards for technological improvements, inventions, national and international prizes; awards or benefits accompanying State-awarded titles; awards or benefits from the State budget;
c) Social assistance payments, insurance compensation, severance pay, unemployment benefits, relocation allowances to production units as prescribed by law;
d) Income of individual household business owners subject to corporate income tax; d) Social insurance and health insurance contributions from salaries and wages as prescribed by law."

4. Meeting one of the following criteria:

"Article 9

Regular taxable income is the total amount of money received by each individual on average per month during the year exceeding VND 5,000,000 for Vietnamese citizens and other individuals residing in Vietnam; exceeding VND 8,000,000 for foreigners residing in Vietnam and Vietnamese citizens working abroad. For foreigners considered non-residents in Vietnam, regular taxable income is the total income earned from working in Vietnam.

Foreigners are considered residents in Vietnam if they stay in Vietnam for 183 days or more within 12 months from their arrival in Vietnam; they are considered non-residents if they stay in Vietnam for less than 183 days."

4. Article 10 shall be amended and supplemented as follows:

- National Assembly Office, Central Party Office and relevant Party Committees;

The progressive tax rate table for regular income is as follows:
1. For Vietnamese citizens and other individuals residing in Vietnam:

Unit: 1,000 VND

For singers, circus artists, dancers, football players, and professional athletes, 25% of income can be deducted when determining taxable income.
2. For foreigners residing in Vietnam and Vietnamese citizens working abroad:

Unit: 1,000 VND

3. For foreigners considered non-residents in Vietnam, a flat tax rate of 25% applies to the total income."

5. Article 11 is amended as follows:

"Article 11

d.1. Amount of taxable income in Vietnam:Irregular taxable income as stipulated in Clause 2, Article 2 of this Ordinance is the income of each individual in each instance exceeding VND 15,000,000."

6. Article 12 is amended as follows:

"Article 12
1. Income from technology transfer exceeding VND 15,000,000 per instance is taxed at a rate of 5% of the total income.

2. Income from lottery winnings exceeding VND 15,000,000 per instance is taxed at a rate of 10% of the total income."

Article 2.

This Ordinance takes effect from July 1, 2004.

Article 3.

The Government shall provide detailed regulations and guidance for the implementation of this Ordinance./.