In 2023, which income is not subject to mandatory social insurance (SI) and is exempt from personal income tax (PIT)? Specifically, how? - Reader Ngoc Ho
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Income not subject to mandatory social insurance in 2023
Pursuant to Clause 26, Article 1 of Circular 06/2021/TT-BLDTBXH, the monthly salary for compulsory social insurance does not include other benefits and welfare such as:
- Bonus according to regulations in Article 104 of the 2019 Labor Code, innovation bonus.
- Meal allowance.
- Allowances for gasoline, phone, travel, housing, babysitting, and childcare.
- Support when a worker has a relative who dies, a worker has a relative who gets married, on the worker's birthday, and subsidies for workers in difficult circumstances due to work-related accidents or occupational diseases.
- Other support and allowances are recorded as separate items in the labor contract as prescribed in Section c2, Point c, Clause 5, Article 3 of Circular 10/2020/TT-BLDTBXH.
Income exempt from personal income tax 2023
Pursuant to Article 4 of the Law on Personal Income Tax 2007 (amended and supplemented in 2012, 2014, 2020), the following incomes are exempt from personal income tax:
(i) Income from real estate transfers between husband and wife; biological father, biological mother and biological child; adoptive father, adoptive mother and adopted child; father-in-law, mother-in-law and daughter-in-law; father-in-law, mother-in-law and son-in-law; paternal grandfather, paternal grandmother and grandchild; maternal grandfather, maternal grandmother and grandchild; siblings.
(ii) Income from transfer of residential houses, land use rights and assets attached to residential land of individuals in cases where individuals have only one residential house or land.
(iii) Income from the value of land use rights of individuals to whom the State allocates land.
(iv) Income from receiving inheritance or gifts of real estate between husband and wife; biological father, biological mother and biological child; adoptive father, adoptive mother and adopted child; father-in-law, mother-in-law and daughter-in-law; father-in-law, mother-in-law and son-in-law; paternal grandfather, paternal grandmother and grandchild; maternal grandfather, maternal grandmother and grandchild; siblings.
(v) Income of households and individuals directly engaged in agricultural production, forestry, salt making, aquaculture, and fishing of unprocessed products or those that have only undergone conventional preliminary processing.
(vi) Income from conversion of agricultural land of households and individuals assigned by the State for production.
(vii) Income from interest on deposits at credit institutions and interest from life insurance contracts.
(viii) Income from remittances.
(ix) Wages for night work and overtime are paid higher than wages for day work and working during hours as prescribed by law.
(x) Pension paid by the Social Insurance Fund; pension paid monthly by the voluntary pension fund.
(xi) Income from scholarships, including: Scholarships received from the state budget; scholarships received from domestic and foreign organizations under the educational support program of that organization.
(xii) Income from life and non-life insurance contract compensation, occupational accident compensation, state compensation and other compensation as prescribed by law.
(xiii) Income received from charitable funds permitted to be established or recognized by competent state agencies, operating for charitable and humanitarian purposes, not for profit.
(xiv) Income received from foreign aid for charitable and humanitarian purposes in the form of government and non-government approved by competent state agencies.
(xv) Income from salaries and wages of Vietnamese crew members working for foreign shipping companies or Vietnamese shipping companies operating internationally.
(xvi) Income of individuals who are ship owners, individuals who have the right to use ships and individuals who work on ships from activities of providing goods and services directly serving offshore fishing and exploitation activities.
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