Directive No. 22/2008/CT-TTg on the implementation of the Personal Income Tax Law

DIRECTIVE

Regarding the implementation of the Personal Income Tax Law

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The Personal Income Tax Law was passed by the XIIth National Assembly at its second session on November 21, 2007 and took effect from January 1, 2009; the President signed Decree No. 13/2007/L-CTN on December 5, 2007 to promulgate the full text of this Law.

The Personal Income Tax Law has a broad scope of regulation, involving many subjects and fields, thus requiring close participation and coordination among Ministries, agencies, local authorities at all levels, political organizations, political-social organizations, social-professional organizations, mass organizations, and the people in the organizational work for its implementation. Based on these requirements and to ensure effective implementation of the Personal Income Tax Law, the Prime Minister requests that the Ministers of the Ministries, Heads of the agencies under the Government, and Chairpersons of the People's Committees of the provinces and centrally governed cities immediately carry out the following tasks:

I. ESTABLISHING THE IMPLEMENTATION GUIDANCE COMMITTEE FOR THE PERSONAL INCOME TAX LAW

1. In July 2008, the Ministry of Finance shall take the lead, in collaboration with the Ministry of Home Affairs and the Office of the Government, to submit to the Prime Minister for decision the establishment of the Central Implementation Guidance Committee for the Personal Income Tax Law (hereinafter referred to as the Central Committee), headed by a Deputy Director in charge and members being leaders of relevant Ministries and agencies.

The Central Committee shall have a Standing Working Group located at the Ministry of Finance, led by a Deputy Minister of Finance, with members comprising representatives from units within the Ministry of Finance and relevant Ministries and agencies. The Central Committee shall be responsible for:

a) Developing programs, plans, schedules, and measures for implementing the Personal Income Tax Law.

b) Guiding, urging, and inspecting the Ministries, agencies, and localities in their implementation of the programs, plans, and measures set forth.

c) Every quarter, compiling and evaluating the implementation situation of the Ministries, sectors, and localities. Identifying and proactively handling issues arising during the implementation of the Personal Income Tax Law and this Directive according to their authority or proposing solutions to the Prime Minister for timely resolution.

d) The Head of the Central Committee shall decide specific policies and measures for the strict implementation of the Personal Income Tax Law and this Directive to achieve the set goals and requirements.

2. The Chairpersons of the People's Committees of the provinces and centrally governed cities shall establish the Implementation Guidance Committee for the Personal Income Tax Law at the local level (hereinafter referred to as the Local Committee) by August 2008, headed by a Deputy Chairman of the provincial People's Committee; members of the Local Committee include leaders of the Department of Finance, Tax Bureau, and related Departments and Bureaus. The Local Committee shall be responsible for:

a) Advising and proposing to the Party Committee at the local level to lead and direct the organization and implementation of the Personal Income Tax Law and this Directive on the local territory. Strictly organizing and implementing the programs, plans, and guidance of the Central Committee, ensuring compliance with the schedule, content, and requirements set forth.

b) Based on the programs, plans, schedules, and measures of the Central Committee, concretizing the content of the plan and measures for organizing and implementing the Personal Income Tax Law at the local level.

c) At the end of each quarter, compiling and evaluating the implementation situation of this Directive at the local level and reporting to the Central Committee.

d) In 2008, focusing on directing the completion of tax registration for all individuals with taxable income and organizations paying income to individuals within the local area.

II. WORK ON BUILDING AND PERFECTING LEGAL DOCUMENTS TO IMPLEMENT THE PERSONAL INCOME TAX LAW

1. By the third quarter of 2008, the Ministry of Finance shall take the lead, in collaboration with the Ministry of Justice and relevant agencies, to submit to the Government for issuance of the Decree detailing the implementation of the Personal Income Tax Law and Circulars guiding its implementation.

2. The Ministry of Planning and Investment shall study and amend regulations on business registration to provide that when multiple individuals jointly contribute capital to a business, the business registration certificate must clearly state the individual whose name is registered to facilitate the declaration and calculation of individual taxable income.

3. The Ministry of Labor, Invalids, and Social Affairs shall take the lead, in collaboration with the Ministry of Home Affairs and relevant agencies, to guide the determination of subsidy and allowance levels applicable to workers in various industries and professions as a basis for determining deductible income when calculating personal income tax; and guide the determination of dependents who are unable to work as a basis for calculating the family deduction.

4. The Ministry of Health shall study and issue a list of serious diseases as a basis for tax reduction; it shall take the lead, in collaboration with the Ministry of Labor, Invalids, and Social Affairs, to guide the certification of disabled individuals who are unable to work as a basis for calculating the family deduction.

III. STRENGTHENING PUBLICITY AND DISSEMINATION OF THE PERSONAL INCOME TAX LAW

1. The Ministry of Finance shall take the lead, in collaboration with the Ministry of Justice and the Ministry of Information and Communications, to effectively organize publicity about the purpose, significance, basic contents of the Law, guiding documents, and administrative procedures regarding personal income tax to all agencies, enterprises, and citizens so they understand, implement, and supervise the implementation. Proactively deploying a support and guidance system for taxation.

2. The Ministers of the Ministries and the Chairpersons of the People's Committees of the provinces and centrally governed cities shall be responsible for directing the publicity and dissemination of the Personal Income Tax Law within their respective Ministries, sectors, and localities.

3. Vietnam Television, Voice of Vietnam Radio, local radio and television stations shall allocate appropriate time to promote and disseminate the Law on Personal Income Tax. Central and local newspapers shall dedicate special columns to disseminate and publish promotional materials on personal income tax.

IV. RESPONSIBILITIES OF MINISTRIES, AUTHORITIES AND LOCALITIES IN ORGANIZING THE IMPLEMENTATION OF THE LAW ON PERSONAL INCOME TAX

1. The Ministry of Finance shall direct the Tax Department to intensify administrative reform and modernize tax management work according to Decision No. 201/2004/QD-TTg dated December 6, 2004 of the Prime Minister approving the program for tax system reform until 2010. In the short term, in 2008, the following tasks shall be implemented immediately:

a) Direct the Tax Department to coordinate with relevant agencies and units to organize tax registration for all subjects with taxable income and entities paying income. By no later than December 31, 2008, the tax registration for these subjects must be completed.

b) Invest in equipment and application software to manage taxpayers and taxable personal income. Support entities paying income in tax declaration, calculation, payment, and provide legal solutions and administrative procedures related to personal income tax.

c) Establish regulations for information sharing between the tax authority and agencies managing real estate, labor, immigration, banks, State Securities Commission, State Treasury to serve tax management work.

d) Organize training and learning sessions on tax laws and administrative procedures for tax officials, organizations paying income, and individual taxpayers. Publicize and ensure transparency in tax administrative procedures so that organizations and individuals are aware.

đ) Strengthen the specialized unit responsible for managing personal income tax within the tax system; increase the allocation of staff with professional qualifications and good moral character to participate in personal income tax management.

e) Coordinate with the State Bank of Vietnam to propose measures to strengthen the management of investment capital, capital transfer, and securities transfer activities to strictly control income from these activities.

2. The State Bank of Vietnam shall cooperate with relevant ministries and agencies to accelerate the implementation of the Payment Management Project, vigorously develop bank and credit institution payment methods, and move towards non-cash transactions in economic transactions according to the roadmap approved by the Prime Minister in Decision No. 291/2006/QĐ-TTg dated December 29, 2006 on "Approval of the Non-Cash Payment Program for the period 2006-2010 and orientation to 2020 in Vietnam."

3. The Ministry of Planning and Investment shall cooperate with relevant ministries and sectors to propose improvements to administrative procedures for business registration for enterprises operating in legal consultancy, auditing, accounting, and tax services to widely develop these services to enhance support for taxpayers in tax declaration, calculation, and payment in accordance with regulations.

4. The Ministry of Labor, Invalids and Social Affairs shall strengthen supervision over the implementation of labor and wage laws to monitor actual wage and salary payments by organizations and individuals to workers in compliance with the law.

5. The Ministry of Natural Resources and Environment, the Ministry of Construction shall direct provincial natural resources and environment departments, construction departments to strengthen management of real estate registration and transfer activities, issuance of land use right certificates, and house ownership certificates, while coordinating with the tax authority to strictly manage prices and income from real estate transfers in their respective areas.

6. The Ministry of Industry and Trade shall direct market management forces to strengthen inspections and oversight of compliance with business registration regulations, and strictly handle individuals actually engaged in business (including independent practitioners) who fail to register their businesses as required by law.

7. The Ministry of Public Security shall cooperate with the Ministry of Finance and law enforcement agencies to detect and severely punish cases of tax fraud, tax evasion, or failure to comply with personal income tax laws.

8. The Ministry of National Defense, the Ministry of Public Security shall direct agencies, units, and officers, workers, and employees under their jurisdiction to implement tax registration, declaration, and payment in accordance with the Law on Personal Income Tax and tax management laws.

Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairmen of provincial People's Committees directly under the central government, the Central Steering Committee, and local steering committees shall be responsible for organizing the implementation of this Directive.