In 2023, which types of income are not subject to mandatory social insurance contributions and are exempt from personal income tax? What are the specifics? - Reader Ngoc Ho
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Income not subject to mandatory social insurance contributions in 2023
According to Clause 26, Article 1 of Circular 06/2021/TT-BLDTBXH, the monthly salary used for calculating compulsory social insurance contributions does not include other benefits and allowances such as:
- Bonuses as stipulated in Article 104 of the 2019 Labor Code, including innovation bonuses.
- Meal allowance during shifts.
- Allowances for fuel, telephone, travel, housing, childcare, and raising young children.
- Support is provided when a worker's family member dies, when a family member gets married, for the worker's birthday, and as a subsidy for workers facing difficult circumstances due to work accidents or occupational diseases.
- Other support and subsidies recorded as separate items in the labor contract as stipulated in clause c2, point c, section 5, Article 3 of Circular 10/2020/TT-BLDTBXH.
Income exempt from personal income tax in 2023
Based on Article 4 of the Personal Income Tax Law 2007 (amended and supplemented in 2012, 2014, and 2020), the following income items are exempt from personal income tax:
(i) Income from the transfer of real estate between husband and wife; biological parents and their children; adoptive parents and their adopted children; father-in-law and mother-in-law and daughter-in-law; father-in-law and mother-in-law and son-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; and siblings.
(ii) Income from the transfer of housing, land use rights and assets attached to residential land by individuals in cases where the individual owns only one house and one plot of land.
(iii) Income from the value of land use rights granted to individuals by the State.
(iv) Income from inheritance or gifts of real estate between husband and wife; biological parents and their children; adoptive parents and their adopted children; father-in-law and mother-in-law and daughter-in-law; father-in-law and mother-in-law and son-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; and siblings.
(v) Income of households and individuals directly engaged in agricultural , forestry, salt production, aquaculture, and fishing activities that have not been processed into other products or have only undergone basic processing.
(vi) Income from the conversion of agricultural land allocated by the State to households and individuals for production.
(vii) Income from interest on deposits at credit institutions, interest from life insurance contracts.
(viii) Income from remittances.
(ix) The portion of wages for night work and overtime work that is paid at a higher rate than wages for daytime work and work during regular hours as prescribed by law.
(x) Pension payments made by the Social Insurance Fund; monthly pension payments made by voluntary pension funds.
(xi) Income from scholarships, including: Scholarships received from the state budget; scholarships received from domestic and foreign organizations under their scholarship support programs.
(xii) Income from compensation under life and non-life insurance contracts, compensation for work-related accidents, state compensation, and other compensation as prescribed by law.
(xiii) Income received from a charitable fund established or recognized by a competent state authority, operating for charitable and humanitarian purposes, and not for profit.
(xiv) Income received from foreign aid for charitable and humanitarian purposes, in the form of government and non-government aid approved by competent state authorities.
(xv) Income from salaries and wages of Vietnamese seafarers working for foreign shipping companies or Vietnamese shipping companies engaged in international transport.
(xvi) Income of individuals who are ship owners, individuals who have the right to use ships, and individuals who work on ships from activities providing goods and services directly serving offshore fishing and aquaculture operations.
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