Circular No. 62/2009/TT-BTC guiding amendments and supplements to Circular No. 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance guiding the implementation of certain provisions of the Law on Personal Income Tax and guiding the implementation of Decree No. 100/2008/NĐ-CP dated September 8, 2008 of the Government detailing certain provisions of the Law on Personal Income Tax.

CIRCULAR

Guidelines for amending and supplementing Circular No. 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance guiding the implementation of certain provisions of the Law on Personal Income Tax and guiding the implementation of Decree No. 100/2008/NĐ-CP dated September 8, 2008 of the Government detailing certain provisions of the Law on Personal Income Tax.

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Pursuant to the Law on Personal Income Tax (PIT) and Decree No. 100/2008/NĐ-CP dated September 8, 2008 of the Government detailing certain provisions of the Law on PIT;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to the guidance of the Prime Minister as stated in Official Letter No. 502/VPCP-KTTH dated January 20, 2009 and Official Letter No. 869/VPCP-KTTH dated February 12, 2009 of the Government Office regarding the guidance on implementing personal income tax;

The Ministry of Finance hereby guides the amendment and supplementation of Circular No. 84/2008/TT-BTC dated September 30, 2008 guiding the implementation of certain provisions of the Law on Personal Income Tax and guiding the implementation of Decree No. 100/2008/NĐ-CP dated September 8, 2008 of the Government detailing certain provisions of the Law on Personal Income Tax (hereinafter referred to as Circular No. 84/2008/TT-BTC) as follows:

Article 1. Supplement Clause 2, Section II, Part A of Circular No. 84/2008/TT-BTC as follows:

1. Supplement Paragraph 2.1.5 with the following non-taxable income items from salary and wages of resident individuals:

a) One-time relocation allowance for foreign nationals residing in Vietnam. The amount of the allowance shall be calculated based on the labor contract or agreement between the employer and employee.

b) The cost of round-trip air tickets purchased by the employer for foreign employees to return home once a year on leave. The basis for determination is the labor contract and the price marked on the air ticket from Vietnam to the country where the foreign national holds citizenship or where their family resides.

c) Tuition fees for the children of foreign nationals studying at Vietnamese schools paid by the employer based on the labor contract and payment receipts.

2. Supplement the guidance of Paragraph 2.1.5 as follows: For other benefits that employees enjoy, only those benefits for which the beneficiary can be identified will be included in taxable income; benefits for which the beneficiary cannot be specifically identified will not be included in the taxable income of individuals. Specifically, in some cases as follows:

a) Rent paid by the employer for housing: included in taxable income according to the actual amount paid but not exceeding 15% of total taxable income (excluding rent).

b) For expenses related to transportation services providing collective transport for employees from their residence to workplace and vice versa, such expenses will not be included in the taxable income of employees; in cases where individual transport is provided exclusively for specific individuals, such expenses must be included in the taxable income of the individual being transported.

c) For membership fees such as golf club memberships, tennis club memberships, cultural and artistic club activity fees, sports club fees, etc., if these fees are recorded under the name of an individual or group of individuals, they will be included in the taxable income of each individual using them. If they are used collectively without naming specific individuals or groups, they will not be included in the taxable income.

d) For other service charges serving individual activities related to health care, entertainment, sports, beauty, etc., if the charges are clearly recorded under the name of the individual benefiting, they will be included in the taxable income of that individual. In cases where the charges are made collectively for a group of employees without specifying the beneficiaries, they will not be included in the taxable income.

đ) For training costs paid by the employer to improve the skills and qualifications of employees relevant to their professional duties or according to the employer's plan, such costs will not be included in the employee's income. In cases where the training does not align with the employee's professional field or is not within the employer's plan, such costs must be included in the taxable income of the employee.

e) For midday meal allowances: not included in the taxable income of employees if the employer directly organizes midday meals for employees.

In cases where the entity paying the income does not organize midday meals directly but pays the midday meal allowance directly to employees, it will not be included in the taxable income of employees if the allowance level is consistent with the guidelines of the Ministry of Labor, Invalids, and Social Affairs. If the allowance exceeds the guideline level set by the Ministry of Labor, Invalids, and Social Affairs, the excess portion must be included in the taxable income of the employee.

The specific allowance levels applicable to state-owned enterprises and organizations permitted to engage in business operations under administrative, public service, party, mass organizations, and associations shall not exceed the level prescribed by the Ministry of Labor, Invalids, and Social Affairs. For non-state-owned enterprises and other organizations, the allowance level is determined by the head of the unit in consultation with the chairman of the trade union, but the maximum level shall not exceed the level applicable to state-owned enterprises.

f) For allowances for office supplies, travel expenses, telephone charges, uniforms, etc., if the allocation level is consistent with current state regulations, these allowances will not be included in taxable income. The allocation level applies as follows:

- For civil servants and staff working in administrative and public service agencies, mass organizations: the allocation level is applied according to the guidance documents of the Ministry of Finance.

- For employees working in business organizations, representative offices: the allocation level is consistent with the determination of corporate income tax according to the guidance documents implementing the Law on Corporate Income Tax.

- For employees working in international organizations, representative offices of foreign organizations: the allocation level is implemented according to the regulations of the organization or the representative office of the foreign organization.

3. Supplement Point 2.2 with the following allowances and subsidies that are deductible when determining taxable income from salary and wages:

For fields of work and industries where the State has stipulated allowance and subsidy systems, these allowances and subsidies will not be included in taxable income.

Article 2. Supplement the guidance for point 3.1, Clause 3, Section I, Part B of Circular No. 84/2008/TT-BTC on household deduction as follows:

1. Supplement the guidance for item 3.1.4 with the following contents:

1.1. In cases where the taxpayer has stepmothers or stepfathers outside the working age or within the working age but are disabled and unable to work, have no income, or have an average monthly income during the year not exceeding VND 500,000, the taxpayer shall be entitled to deduct dependents.

1.2. The individuals considered as dependents according to the above guidance and the guidance at item 3.1.4, item 3.1.5, Clause 3, Section I, Part B of Circular No. 84/2008/TT-BTC are specified as follows:

- Individuals within the working age who are considered as dependents must satisfy the following conditions simultaneously:

+ Being disabled and unable to work (except for children currently studying at universities, colleges, vocational high schools, or vocational training centers);

+ Having no income or having an average monthly income during the year not exceeding VND 500,000.

- Individuals outside the working age who are considered as dependents must have no income or have an average monthly income during the year not exceeding VND 500,000.

- For dependent grandparents, maternal grandparents, aunts, uncles, sisters, brothers, nephews, nieces, and other individuals, they must also satisfy the additional condition of being without support and directly supported by the taxpayer.

2. Supplement the guidance for item 3.1.7 as follows:

2.1. Documentation to prove the dependency of stepfathers and stepmothers includes: a copy of the taxpayer's birth certificate and a copy of the marriage certificate proving that they are stepfathers or stepmothers, or other relevant documents containing information confirming their status as stepfathers or stepmothers.

2.2. Additional guidance on documentation to prove the dependency of grandparents, maternal grandparents, aunts, uncles, sisters, brothers, nephews, nieces, and other individuals, and the content confirmed by the People's Committee of the commune for cases where the dependents are grandparents, maternal grandparents, aunts, uncles, sisters, brothers, nephews, nieces, and other individuals:

a. In cases where the dependents share the same household registration with the taxpayer, confirmation from the People's Committee of the commune is not required, only a copy of the household registration is needed.

b. In cases where the dependents do not share the same household registration but live together with the taxpayer: a copy of the temporary residence registration or a self-declaration form (according to Form No. 21a/XN-TNCN attached to this Circular) confirmed by the People's Committee of the commune where the taxpayer resides regarding the fact that the dependents are living together.

c. In cases where the dependents do not live together with the taxpayer but the taxpayer must directly support them: the taxpayer self-declares (according to Form No. 21b/XN-TNCN attached to this Circular) and requests the People's Committee of the commune where the dependents reside to confirm that the dependents are currently living in the locality and are not being supported by anyone else.

2.3. Additional guidance on the content confirmed by the People's Committee of the commune for cases where the dependents are disabled and unable to work:

In cases where the dependents are disabled and unable to work but do not have a medical confirmation from health authorities, the taxpayer self-declares (according to Form No. 22/XN-TNCN attached to this Circular) and requests the People's Committee of the commune where the dependents reside to confirm specific manifestations of the disability of the dependents; for example, confirming that the dependents are missing limbs, blind, suffering from intellectual disabilities (Down syndrome), affected by Agent Orange, etc.

In cases where the dependents suffer from diseases that render them unable to work (such as AIDS, cancer, end-stage renal disease, etc.) and have medical records from health authorities at district level or higher, only a copy of the medical record is required, without needing a confirmation from the People's Committee of the commune.

2.4. For employees working in economic organizations, administrative agencies, and public institutions who have declared their parents, spouses, children, and other individuals who qualify as dependents in their personal history, the documentation to prove the dependents can be chosen by the employee to apply according to one of the two methods below:

- Method 1: Only the Declaration Form for Dependent Registration (Form No. 16/ĐK-TNCN attached to Circular No. 84/2008/TT-BTC) with the confirmation of the Head of the Unit on the right side of the form is required. The Head of the Unit is only responsible for the following items: name, date of birth, and relationship with the taxpayer; other items are self-declared by the taxpayer and the taxpayer bears responsibility.

In case there is a change in the dependents, the taxpayer should request the Head of the Unit to confirm on the adjustment declaration form.

- Method 2: follow the guidance at item 3.1.7, point 3.1, Clause 3, Section I, Part B of Circular No. 84/2008/TT-BTC and the guidance in this Circular.

3. Supplement the guidance for item 3.1.8 as follows:

In cases where the taxpayer has regular and stable income from two or more sources; or has both business income and regular and stable salary income; or has regular and stable business income from two or more sources, the taxpayer may choose the place to declare the household deduction; specifically as follows:

- Regarding deductions for oneself: the taxpayer may choose to declare the deduction for oneself at one source of income generation; meanwhile, it is necessary to inform other income-paying units or tax authorities (where there are other business activities) about this to avoid duplicate deductions.

- Regarding deductions for dependents: in cases where the taxpayer has multiple dependents, if the number of dependents deducted at one source of income generation is insufficient, the taxpayer may register the remaining number of dependents for deduction at another source of income generation.

Article 3. Add a new point (3.3) to Clause 3, Section I, Part B of Circular No. 84/2008/TT-BTC as follows:

Mandatory insurance contributions deductible when determining taxable income include mandatory insurance contributions under the Labor Code, Social Insurance Law, Health Insurance Law such as social insurance, health insurance, occupational liability insurance for certain professions required to participate in mandatory insurance, unemployment insurance, etc. Other insurance contributions are not deductible from taxable income.

The level of insurance deductible shall be based on the guidance of the Ministry of Labor, Invalids and Social Affairs and the Ministry of Health. In cases where individuals pay the aforementioned insurance contributions themselves, the deductible level shall be based on the certificates from the insurance agency and the contribution rate according to the guidance of the Ministry of Labor, Invalids and Social Affairs and the Ministry of Health.

Article 4. Replace the content stated at point 3, sub-item 2.1.2 a, point 2.2, Clause 2, Section II, Part D Circular No. 84/2008/TT-BTC as follows:

For securities that have not been listed or registered for trading at the Securities Trading Center but the issuing company has authorized a securities company to manage the shareholder list and unlisted and unregistered securities at the Securities Trading Center, and the issuing company has not authorized a securities company to manage the shareholder list, the transfer price of securities serving as the basis for tax deduction shall be based on the price recorded in the transfer contract. If the contract does not record the price, the basis for tax deduction shall be the transfer price declared by the transferee. Individuals transferring securities without recording the price in the contract must bear responsibility for the accuracy of the declared content. In cases where the tax authority has grounds to determine that the price recorded in the contract or the self-declared price is not consistent with reality, the tax authority has the right to set the transfer price to recalculate the tax payable and impose penalties for tax fraud in accordance with the Tax Administration Law.

Article 5. Amend and supplement sub-item 1.2.7, Clause 1, Section II, Part D Circular No. 84/2008/TT-BTC as follows:

Organizations and individuals paying commission for sales agents; salaries, wages, remuneration, other payments to individuals performing services with a total income payment amounting to VND 500,000 or more per payment or the total value of commissions, service fees, must withhold tax before paying income to individuals according to the following guidelines:

- Uniformly apply a withholding rate of 10% on the income paid, except for cases where the Ministry of Finance has issued separate guidance on temporary withholding rates (such as insurance agent commissions, lottery agent commissions).

- In cases where an individual acts as a sales agent (including insurance agents, lottery agents) or performs services with only one income subject to withholding tax at the above rate but estimates that their total taxable income after deductions will not reach the threshold requiring tax payment (for example, if an individual's annual income is less than VND 48 million if single or under VND 67.2 million if they have one dependent or under VND 86.4 million if they have two dependents...), the individual receiving income must make a commitment (using Form No. 23/BCK-TNCN issued together with this Circular) to send to the payer of income for the payer to temporarily refrain from withholding 10% personal income tax. Based on the commitment of the recipient of income, the unit paying income temporarily does not withhold tax but must provide a list to the tax authority by the end of the year. The individual making the commitment bears responsibility for their commitment, and if fraud is discovered, they will be dealt with according to the Tax Administration Law.

- In cases where organizations or individuals hire temporary workers for over three months up to less than twelve months and have a labor contract, the withholding tax at a rate of 10% per payment or total income is not applied, but instead, temporary withholding tax is implemented according to the progressive scale calculated monthly.

Article 6. Supplement Point 2.2, Clause 2, Section II, Part D Circular No. 84/2008/TT-BTC regarding tax declaration for resident individuals with business income as follows:

1. For rental activities of houses and assets:

In cases where individuals rented out houses or assets before 2009 and received rent payments covering periods from 2009 onwards, declaring and paying corporate income tax (CIT) on the entire revenue collected in advance. From January 1, 2009, individuals renting out properties have the option to retain the previously paid CIT for revenues from 2009 onwards or recalculate according to the Personal Income Tax Law.

Individuals who request recalculation according to the Personal Income Tax Law must submit a written application to the tax authority that collected the corporate income tax on rental revenue. The application should clearly state the name of the lessor, lessee, pre-collected rental revenue, the period of pre-collection, the amount of CIT already paid for pre-collected revenue, along with the lease agreement and proof of CIT payment for revenue generated from 2009. Based on the application, lease agreement, and proof of CIT payment, the tax authority will calculate the personal income tax due for revenue generated from 2009.

If the recalculated personal income tax is lower than the previously paid corporate income tax, the tax authority will refund the excess tax paid or offset it against future tax liabilities. Refund or offset requests are made by the lessor.

In cases where the lease agreement stipulates that the payment to the lessor is tax-exclusive and the lessee pays the full tax on behalf of the lessor, the recalculation of tax according to the Personal Income Tax Law will also follow the guidance provided in this section.

2. Regarding the reduction of personal income tax for individuals engaged in business taxed under the fixed-rate method who temporarily cease operations:

During the tax assessment year, if an individual engaged in business ceases operations continuously for a full month (from the first day to the last day of the month) or longer, they will be eligible for a 1/3 reduction in quarterly tax; similarly, if they cease operations continuously for two full months or longer, they will be eligible for a 2/3 reduction in quarterly tax, and if they cease operations for a full quarter, they will be eligible for a complete exemption from quarterly tax.

Example: Mr. A is an individual engaged in business with a fixed tax liability of VND 12 million for 2009. During the year, Mr. A ceased operations continuously from February 20 to June 20. Mr. A will be eligible for tax reduction as follows:

- The continuous cessation months of Mr. A eligible for tax reduction are March, April, and May;

- Mr. A's quarterly fixed tax is VND 12 million / 4 quarters = VND 3 million

Therefore, the tax reduction Mr. A will receive is:

- In the first quarter: Since Mr. A ceased operations continuously for one month, he will be eligible for a 1/3 reduction in the first quarter's tax, equivalent to VND 1 million.

- In the second quarter: Mr. A ceased business continuously for two months, thus Mr. A is entitled to a reduction of 2/3 of the tax for the second quarter, equivalent to two million VND.

Individuals who cease business and are eligible for tax reduction must submit a tax reduction application form. The application form for tax reduction shall be prepared in accordance with the guidelines set out in Point 3, Section II, Part E of Circular No. 60/2007/TT-BTC dated June 14, 2007, issued by the Ministry of Finance, guiding the implementation of certain provisions of the Law on Tax Administration and guiding the implementation of Decree No. 85/2007/NĐ-CP dated May 25, 2007, issued by the Government detailing certain provisions of the Law on Tax Administration.

Based on the tax reduction application form, the tax authority directly examines the application form and issues a decision to reduce taxes.

3. Supplement the guidance on tax declaration for individuals or groups of individuals engaged in trade and subject to fixed turnover tax: In cases where actual business revenue exceeds the declared turnover during the tax year, individuals or groups of individuals engaged in trade must declare this to recalculate the total personal income tax payable for the year.

4. Supplement the guidance on tax declaration and payment for individuals engaged in itinerant trade (trading trips).

Individuals engaged in itinerant trade must temporarily pay personal income tax calculated on the income from each trading trip; the temporary personal income tax rate is 10% of the taxable income from each trading trip.

Individuals engaged in itinerant trade must simultaneously pay personal income tax and value-added tax (VAT) for each trading trip.

5. Supplement the guidance on tax declaration and payment for individuals engaged in trade requesting single invoices:

- Individuals engaged in trade (except those renting houses or assets) or individuals selling assets who request the tax authority to issue single invoices must temporarily pay personal income tax; the temporary personal income tax rate is 10% of the taxable income from selling a batch of goods or assets.

Individuals engaged in trade requesting the issuance of single invoices must simultaneously pay personal income tax and value-added tax (VAT) when receiving the single invoice.

If individuals engaged in trade request a refund of tax (or offset excess tax paid in subsequent periods), they must complete a final tax settlement at the end of the year to determine total taxable income, tax payable, tax already paid, tax requested for refund, or offset of excess tax paid in subsequent periods.

6. Supplement the guidance on tax declaration and payment for individuals or groups of individuals engaged in trade with multiple business locations across different districts, counties, provinces, or cities:

Individuals or groups of individuals engaged in trade must declare and temporarily pay personal income tax at the Tax Office where the business activity takes place and settle personal income tax for all taxable income from business activities with the Tax Office at one location where the individual has registered for tax deductions.

Article 7. Supplement the end of Clause 2, Section II, Part D of Circular No. 84/2008/TT-BTC regarding tax declaration for individuals with income from capital investment:

1. For cases where dividends are received in the form of shares or share bonuses:

Individuals receiving dividends in the form of shares or share bonuses do not need to pay personal income tax upon receipt of the shares. When transferring these shares, individuals must pay personal income tax on securities transactions and income from capital investments.

- The basis for determining the amount of personal income tax payable on income from capital investment is the dividend value recorded in accounting books or the quantity of shares actually received multiplied by the par value of the shares and the personal income tax rate applicable to income from capital investment. In cases where shares received as dividends or share bonuses are transferred at a price lower than the par value, personal income tax on capital investment is calculated based on the market price at the time of transfer.

Individuals transferring shares obtained through dividend or share bonus receipts must declare (using Form No. 24/KK-TNCN attached hereto) and pay personal income tax on capital investment at the Tax Office where the individual resides.

- The basis for determining the amount of personal income tax payable on income from the transfer of shares obtained through dividend or share bonuses is the actual transfer price at the time of transfer and the personal income tax rate applicable to income from securities transfers.

If the actual transfer price of the shares is lower than the par value, no personal income tax is required for the securities transfer.

If the actual transfer price of the shares is higher than the par value, the individual pays securities transfer tax at a rate of 0.1% of the actual transfer price or 20% of the difference between the actual transfer price and the par value or the dividend value recorded in accounting books.

After receiving dividends in the form of shares or share bonuses, if the individual transfers shares of the same type, they must declare and pay personal income tax on the dividends received immediately. If the number of shares transferred initially is less than the number of shares received as dividends or share bonuses, the individual will declare and pay personal income tax on the remaining shares in subsequent transfers until all shares are transferred.

2. For cases where individuals receive dividends in cash but do not accept them and instead increase their capital investment, the method of collecting personal income tax is similar to that for receiving dividends in the form of shares or share bonuses.

After receiving dividends in cash and increasing capital investment, if the individual withdraws capital from the enterprise or transfers capital, they must declare and pay personal income tax corresponding to the dividends received immediately. If the value of capital withdrawn from the enterprise or transferred initially is less than the value of the dividends received, the individual will declare and pay personal income tax on the remaining dividends in subsequent withdrawals or transfers until all dividends are accounted for.

Article 8. Amend and supplement Point 2.8, Clause 2, Section II, Part D of Circular No. 84/2008/TT-BTC:

Point 2.8, Clause 2, Section II, Part D of Circular No. 84/2008/TT-BTC provides as follows: "Based on the tax declaration form, the tax authority checks and calculates tax for the heir or gift recipient to pay into the state budget. In cases where the income from inheritance or gifts is under 10 million VND."

Now amended as follows: "Based on the tax declaration form, the tax authority checks and calculates tax for the heir or gift recipient to pay into the state budget. In cases where the income from inheritance or gifts is under 10 million VND or exempted from tax, the tax authority will confirm on the declaration form."

Article 9. Amend the tax declaration form for real estate transfer, inheritance receipt, and real estate gifts:

Issue the individual income tax declaration form for individuals with income from real estate transfer, inheritance receipt, and real estate gifts (Form No. 11/KK-TNCN), replacing Form No. 11/KK-TNCN issued together with Circular No. 84/TT-BTC.

Article 10. Supplement the tax payment deadline for real estate transfer, inheritance receipt, gift, capital contribution transfer, etc., as follows:

The deadline for paying individual income tax on activities involving real estate transfer, inheritance receipt, gift; capital contribution transfer, investment capital (in cases where direct tax declaration to the tax authority is required),... is the date indicated on the tax payment notice issued by the tax authority but not later than 30 days from the date of receiving the tax notice.

Article 11. Supplement reduction of individual income tax for workers in economic zones:

According to Clause 3, Article 34 of the Individual Income Tax Law, the income of individuals enjoying tax benefits as prescribed in legal normative documents prior to the effective date of the Individual Income Tax Law shall continue to enjoy such benefits.

Based on the above provisions, Vietnamese and foreign individuals working in economic zones from the effective date of Decree No. 29/2008/NĐ-CP dated March 14, 2008 of the Government and from January 1, 2009 onwards are all entitled to a 50% reduction in individual income tax.

Article 12. Implementation organization:

This circular takes effect 45 days from the date of signature and applies to income arising from January 1, 2009. Abolish the guidance contents in Circular No. 84/2008/TT-BTC dated September 30, 2008 and other circulars of the Ministry of Finance guiding individual income tax contrary to this circular.

Any difficulties encountered during implementation should be reported to the Ministry of Finance for timely resolution./.