Circular No.111/2013/TT-BTC on PIT

Dragon Law Firm provides this Circular to support in Personal Income Tax.

CIRCULAR

ON THE IMPLEMENTATION OF THE LAW ON PERSONAL INCOME TAX, THE LAW ON THE AMENDMENTS TO THE LAW ON PERSONAL INCOME TAX, AND THE GOVERNMENT'S DECREE NO. 65/2013/NĐ-CP ELABORATING A NUMBER OF ARTICLES OF THE LAW ON PERSONAL INCOME TAX AND THE LAW ON THE AMENDMENTS TO THE LAW ON PERSONAL INCOME TAX

Pursuant to the Law on Personal income tax No. 04/2007/QH12 dated November 21, 2007;

Pursuant to the Law on the amendments to the Law on Personal income tax No. 26/2012/QH13 dated November 22, 2012;

Pursuant to the Law on Tax administration No. 78/2006/QH11 dated November 29, 2006;

Pursuant to the Law on the amendments to the Law on Tax administration No. 21/2012/QH13 dated November 20, 2012;

Pursuant to the Government's Decree No. 65/2013/NĐ-CP dated June 27, 2013 elaborating a number of articles of the Law on Personal income tax and the Law on the amendments to the Law on Personal income tax;

Pursuant to the Government's Decree No. 83/2013/NĐ-CP dated June 22, 2013 elaborating a number of articles of the Law on Tax administration and the Law on the amendments to the Law on Tax administration;

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

At the request of the Director of the General Department of Taxation;

The Minister of Finance provides guidance on the implementation of the Law on Personal income tax, the Law on the amendments to the Law on Personal income tax, and the Government's Decree No. 65/2013/NĐ-CP elaborating a number of articles of the Law on Personal income tax and the Law on the amendments to the Law on Personal income tax:

Chapter 1.

GENERAL PROVISIONS

Article 1. Taxpayers

Taxpayers are residents and non-residents according to Article 2 of the Government's Decree No. 65/2013/NĐ-CP elaborating a number of articles of the Law on Personal income tax and the Law on the amendments to the Law on Personal income tax (hereinafter referred to as the Decree No. 65/2013/NĐ-CP) and earn taxable incomes according to Article 3 of the Law on Personal income tax and Article 3 of the Decree No. 65/2013/NĐ-CP.

Determination of taxable incomes earned by taxpayers:

Taxable incomes earned by residents are the incomes earned within or outside Vietnam’s territory, regardless of locations or payment and receipt.

Taxable incomes earned by non-residents are the incomes earned within Vietnam’s territory, regardless of the location of payment and receipt.

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Article 29. Effects

1. This Circular takes effect on October 01, 2013.

The regulations on personal income tax in the Law on the amendments to the Law on Personal income tax, and the Decree No. 65/2013/NĐ-CP from the effective date of the Law and Decree (July 01, 2013).

The guidance on personal income tax in the Circular No. 84/2008/TT-BTC dated September 30, 2008, Circular No. 10/2009/TT-BTC dated January 21, 2009, Circular No. 42/2009/TT-BTC dated March 09, 2009, Circular No. 62/2009/TT-BTC dated March 27, 2009, Circular No. 161/2009/TT-BTC dated August 12, 2009, Circular No. 164/2009/TT-BTC dated August 13, 2009, Circular No. 02/2010/TT-BTC dated January 11, 2010, Circular No. 12/2011/TT-BTC dated January 26, 2011, Circular No. 78/2011/TT-BTC dated June 08, 2011, Circular No. 113/2011/TT-BTC dated August 04, 2011 of the Ministry of Finance are abolished.

2. The guidance on personal income tax that are provided by the Ministry of Finance before this Circular takes effect and at odds with the guidance in this Circular are abolished.

Article 30. Responsibility to implement

1. The Law on Tax administration and its guiding documents shall apply to other contents related to tax administration that are not guided in this Circular.

2. The issues and difficulties pertaining to personal income tax that arise before January 01, 2013 shall comply with the effective guiding documents at that time.

3. The application of taxable income rate to the business persons guided in Article 8 of this Circular shall be implemented from January 1, 2014.

4. For the contracts to sell floors, contribute capital to obtain the right to buy floors, houses, and apartments that are signed before the effective date of the Government's Decree No. 71/2010/NĐ-CP dated June 23, 2010 elaborating and providing guidance on the implementation of the Law on Housing, and allowed to be transferred by the investors, tax shall be declared and paid similarly to transferring future houses.

5. If the person receives a land before January 01, 2009, applies for and issued with the certificate of rights to use land, ownership of houses and other property on land, only the personal income tax on the last transferred is paid. The tax on the previous transferred shall not be collected.

From January 01, 2009 when the Law on Personal income tax takes effect, the person that transfers real estate under a notarized contract or handwritten agreement shall pay personal income tax on the each transfer.

6. The persons eligible for personal income tax incentives before the Law on the amendments to the Law on Personal income tax takes effect are still eligible for such incentives for the remaining period.

7. When Socialist Republic of Vietnam signs International Agreements of which the regulations are different from this Circular, such the regulations of such International Agreements shall apply.

Organizations and individuals are recommended to report the difficulties that arise during the implementation to the Ministry of Finance (the General Department of Taxation) for consideration and settlement./.