Personal Income Tax policy regarding some expenses paid to labor
On May 16th, 2018, General Department of Tax issued the official dispatch No 1801/TCT-TNCN. Whereby, there are some noticeable contents as follows:
- In case, Enterprise pays for some expenses regarding itsemployee such as consulting service fee or making temporary residence card or visa fee, those expenses shall be considered as taxable income of labor when determining Personal Income Tax (PIT).
- The tuition fees for children of foreign employees in Vietnam to study in Vietnam, for children of Vietnamese employees oversea to study overseas from preschool to high school, which is paid by the employer on their behalf, shall not be calculated as taxable income.
- Due to the specific characteristic of each kind of tax, there are some different regulations between Personal Income Tax and Corporation Income Tax such as the regulation regarding list of employee’s welfare compared with the practical average 1-month’s salary. However, law on PIT regulates the employee’s welfare as belows:
+ The payments for refresher courses for employees, which suit their professions or accords with plans of the employer, shall not be included in the incomes earned by employees.
+ The tax payers facing difficulties in paying tax due to natural disasters, accidents, or fatal diseases shall receive a tax reduction in proportion to the damage. The reduction shall not exceed the payable tax.
+ Supports provided by the employer for medical examination and treatment of fatal diseases suffered by employees and their families shall not be included in taxable incomes.
