Decree No. 65/2013/ND-CP dated June 27, 2013 of the Government detailing a number of Articles of the Law amending on personal income tax No. 26/2012/QH13

In accordance with this Decree, Resident individuals who earn incomes from salaries or wages or business activities enjoy reduction based on family conditions from their taxable incomes before tax calculation. Level of reduction for a taxpayer himself/herself is VND 9 million/month (which is VND 108 million/year); level of reduction for each dependant of a taxpayer is VND 3.6 million/month given from the month the taxpayer’s obligation to nurture the dependant arises. If the National Assembly Standing Committee adjust the levels of reduction based on family conditions as prescribed in clause 4 Article 1 of the Law amending and supplementing some articles of the Law on personal income tax, the levels as regulated by the National Assembly Standing Committee will be applied for the next tax period. Each dependant may be counted only once for tax reduction for a taxpayer in a tax year. In case several taxpayers share a dependant they are obliged to nurture, they shall reach agreement on registration of this dependant for family circumstance-based reduction for one among them.

The Decree also states that beside the reduction from family conditions, resident individuals who earn incomes from business activities, salaries or wages enjoy their charity or humanitarian donations deductible from their taxable incomes, including: donations to organizations or establishments that care for or nurture children in special plights, disabled people and helpless elderly people; and donations to charity funds, humanitarian funds or study promotion funds.

Besides, the Decree also details 14 groups of tax-exemption income such as Incomes from transfer or real estate (including resident houses and construction works formed in future as prescribed by law on real estate business) between: spouses; parents and their children; adoptive parents and their adopted children; fathers-in-law or mothers-in-law and daughters-in-law or sons-in-law; grandparents and their grandchildren; or among blood siblings; incomes from transfer of residential houses, rights to use residential land and assets attached to residential land received by individuals who have only one residential house or right to use residential land in Vietnam; incomes from indemnities paid under life insurance policies, non-life insurance policies, compensations for labor accidents, compensations paid by the State and other compensations and so on.

This Decree takes effect on July 01, 2013 and replaces the Decree No. 100/2008/ND-CP dated September 08, 2008 and the Article 2 of the Decree No. 106/2010/ND-CP dated October 28, 2010.