VietnameseCircular No. 164/2009/TT-BTC dated August 13, 2009, of the Ministry of Finance providing guidance on personal income tax on prize winners in games at prize-game venues
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Circular No. 164/2009/TT-BTC dated August 13, 2009, of the Ministry of Finance providing guidance on personal income tax on prize winners in games at prize-game venues
| Issuing body: | Ministry of Finance | Effective date: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Official number: | 164/2009/TT-BTC | Signer: | Do Hoang Anh Tuan |
| Type: | Circular | Expiry date: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Issuing date: | 13/08/2009 | Effect status: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Fields: | Tax - Fee - Charge |
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THE MINISTRY OF FINANCE ______ No. 164/2009/TT-BTC | SOCIALIST REPUBLIC OF VIETNAM Independence- Freedom- Happiness ---------------------- Hanoi, August 13, 2009 |
CIRCULAR
Providing guidance on personal income tax on prize winners in games at prize-game venues
Pursuant to Personal Income Tax (PIT) Law No. 04/2007/QH12 dated November 21, 2007, and the Governments Decree No. 100/2008/ND-CP dated September 8, 2008, detailing a number of articles of the PIT Law;
Pursuant to the Government’s Decree No. 118/2008/ND-CP dated November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
Pursuant to the Prime Minister’s Decision No. 32/2003/QD-TTg dated February 27, 2003, promulgating the Regulation on prize-video game business applicable to foreigners;
Pursuant to the Finance Ministry’s Decision No. 91/2005/QD-BTC dated December 8, 2005, promulgating the Financial Management regulation applicable to prize-game business and Decision No. 84/20N7/QD-BTC dated October 17, 2007, promulgating the Financial Management Regulation applicable to prize-game business (amended and supplemented),
The Ministry of Finance provides guidance on PIT on winners in prize games as follows:
Article 1.
Scope of regulation
This Circular guides the determination of taxed income, and tax registration, withholding, declaration, payment and finalization for income from prizes in the following forms of game at prize-game venues: games between gamesters and gaming machines with attendants; games between gamesters themselves with attendants collecting the casino fee; games in which one or more gamesters play with automatic gaming machines without attendants; games in which prizes are won from jackpots or periodical prizes for lucky gamesters; and other forms of game at prize-game venues.
Article 2.
Subjects of application
This Circular applies to:
- Prize winners in games at prize-game venues of lawfully licensed business organizations.
- Business organizations licensed to deal in prize-game venues in accordance with law.
Article 3.
Definitions referred to in the Circular
- Prize winner means an individual playing a prize game and winning a prize under the game’s prize rules.
- Prize games means games defined at Point 1, Article 2 of the Financial Management Regulation applicable to prize-game business promulgated together with the Finance Minister’s Decision No. 91/2005/QD-BTC dated December 8, 2005.
- Conventional tokens means chips, intermediary chips and counters defined at Point 2, Article 2 of the Financial Management Regulation applicable to prize-game business promulgated together with the Finance Minister’s Decision No. 91/2005/QD-BTC dated December 8, 2005.
- Prize-game venues means venues defined at Point 5, Article 1 of the Financial Management Regulation applicable to prize-game business promulgated together with the Finance Minister’s Decision No. 91/2005/QD-BTC dated December 8, 2005.
- Game is determined as follows:
+ For games played in conventional tokens, a game starts when a gamester enters a prize-game venue and ends when he/she leaves the prize-game venue.
+ For games played in cash with automatic gaming machines, a game starts when a gamester cashes in/keys in a gaming machine and ends when he/she cashes out from the gaming machine.
+ For prizes from jackpots, periodical prizes for lucky gamesters and other similar forms of prize, each time of prize winning is regarded a separate game.
- Payer means an organization dealing in prize-game venues in accordance with law.
Article 4.
Tax bases
Tax bases include taxed income and tax rate.
1. Taxed income
a/ Taxed income is the value exceeding VND 10 million of income from prizes won in a game.
b/ Income from prizes won in a game is the difference between the cash amount a gamester receives and the cash amount he/she pays in that game.
- The formula for calculating income from won prizes is as follows:
Income from won prizes | = | Cash amount a gamester receives in a game | - | Cash amount a gamester pays in a game |
c/ In case income from won prizes is in a foreign currency, such income must be converted into Vietnam dong at the exchange rate announced by the State Bank and applicable at the time of income generation.
d/ Methods of determining the cash amount received and the cash amount paid in a game are as follows:
- For games played in conventional tokens:
+ The cash amount a gamester receives in a game is the total value gained through his/her exchanges of chips/counters for cash throughout the game.
+The cash amount a gamester pays in a game is the total value gained through his/her exchanges of cash for chips/counters throughout the game.
The cash amount received and the cash amount paid in a game shall be determined based on cash-chip/counter exchange invoices (form No. 03 enclosed with the Finance Minister’s Decision No. 91/2005/QD-BTC dated December 8, 2005) and invoices and documents under the current law on accounting.
Example 1: From the time of entering to the time of leaving a prize-game venue, Mr. A exchanged three times cash for chips with a total value of US$ 500 and exchanged twice chips for cash with a total value of US$ 700. Based on these exchanges, Mr. A’s income from won prizes and taxed income ale determined as follows:
* Income from won prizes = US$ 700 – US$ 500 = US$ 200.
* Taxed income = US$ 200 x US$/VND exchange rate - VND 10 million.
- For games played in cash with automatic gaming machines:
+ The cash amount a gamester receives in a game is the total value of the cashed-out amount when the game finishes minus the jackpot (if any).
+ The cash amount a gamester pays in a game is the total value gained through the times of key in/cash in a gaming machine throughout the game.
Particularly for prizes from jackpots, periodical prizes for lucky gamesters and other similar forms of prize, income from won prizes is the total value of won prizes without subtracting any expense.
Example 2: Mr. B played in cash directly with an automatic gaming machine. In a game, he twice keyed in with a total value of US$ 300. When the game finished, he cashed out the whole remaining amount from the gaming machine with a total value of US$ 1,500. In this game, Mr. B also won US$ 1,000 in prize from jackpots (the value of prize from jackpots had been accumulated in the cashed-out amount). Based on keyed-in and cashed-out amounts, Mr. B’s income from won prizes and taxed income include:
(1) Income from won prizes from jackpots, which is the total value of jackpots:
- Income from won prizes = US$ 1,000
- Taxed income = US$ 1,000 x US$/VND exchange rate - VND 10 million.
(2) Income from won prizes from the game with the automatic gaming machine:
- Income from won prizes : US$ 1,500 – US$ 1,000 – US$ 300 = US$ 200
- Taxed income = US$ 200 x US$/VND exchange rate - VND 10 million.
2. Tax rate
The PIT rate for income from prizes won in games at prize-game venues is 10%.
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