Vietnamese
Depending on the sources of each type of income, payable incomes can be calculated in accordance with the partially progressive tax tariff or whole progressive tax tariff. In order to understand the definition of the whole tax which is applicable to all types of income tax, please follow this article.
What is the whole tax?
Similar to the partially progressive tax tariff, the whole progressive tax tariff is popularly applied in the legal documents on personal income tax without any specific definition of the whole tax.
The whole tax can be defined based on the calculation of personal income tax for incomes in the whole progressive tax tariff as follows:
The whole tax or the whole progressive tax tariff is the calculation of personal income tax within which the payable personal income tax equals personal income tax (x) multiplied by a consistent tax rate irrespective of more or fewer incomes.
Therefore, it can be seen that the whole tax tariff (whole tax) is totally different from the partially progressive tax tariff, accordingly, personal income tax which is applied with the whole tax tariff has only one tax rate, on the contrary, the tax calculation of partially progressive tax tariff includes different tax levels and tax rates.
Which type of income applies to the whole tax tariff?
* Taxed incomes in accordance with the whole tax tariff and tax rate
Pursuant to Clause 1, Article 23, Law on Personal Income Tax 2007 and sub-point b.3, Point b, Clause 1, Article 25, Circular No. 111/2013/TT-BTC, the whole income tax tariff is as follows:
No. | Taxed income | Tax rate (%) |
1 | Incomes from capital investment | 5 |
2 | Incomes from copyright and franchising | 5 |
3 | Incomes from prize-winning | 10 |
4 | Incomes from inheritances and gifts | 10 |
5 | Incomes from capital investment | 20 |
6 | Incomes from securities transfer | 0.1 |
7 | (3) Incomes from transfer of real estate | 2 |
Note: - For foreigners working in Vietnam, income payers shall base themselves on the taxpayers’ working duration in Vietnam as written in contracts or documents on sending these foreigners to Vietnam to work to temporarily withhold tax according to the Whole Personal Income Tax Tariff for individuals who have worked in Vietnam for less than 183 days in a tax year (for non-residential individuals) with the tax rate of 20%. - Incomes from salaries and wages in the case of 10% withholding tax before payment, including: + Resident individuals who do not sign labor contracts. + Resident individuals who sign under 3-months labor contracts. | ||
* Personal income tax under the whole tax tariff
The tax calculation method for taxed incomes under the whole tariff is defined as follows:
Payable personal income tax amount = Taxed income x Tax rate (As above tariff)
Within that, the taxed income for each income has a different definition, in particular:
- Incomes from transfer of real estate:
Taxed income includes Incomes from the transfer of rights to use land and assets attached to land; Incomes from the transfer of right to own or use residential houses; Incomes from the transfer of right to lease land or water surface; Other incomes earned from the transfer of a real estate in any form.
The payable tax is defined in accordance with the formula as follows:
Personal Income Tax = 2% x Transfer price
- Incomes from prize-winning
Pursuant to Article 15, Circular No. 111/2013/TT-BTC, taxed incomes from prize-winning include: Lottery winnings; Sales promotion winnings; Betting winnings; Winnings in prized games and contests, and other forms of winning.
The payable tax is defined in accordance with the formula as follows:
Personal Income Tax = 10% x (Exceeding prize value - 10 million)
- Incomes from inheritances:
Article 16, Circular 111/2013/TT-BTC prescribes the taxed incomes from inheritances for incomes from inheritances that are securities, capital holdings in economic organizations or business establishments, real estate, and other assets subject to ownership or user registration.
The payable tax is defined in accordance with the formula as follows:
Personal Income Tax = 10% x (Exceeding inheritance value - 10 million)
Here is the answer to the question: What is the whole tax and how is it applied to the taxed incomes in the calculation of personal income tax?
