Ministry delays new personal income tax law

Hanoi (VNA) - Implementation of the new Law on Personal Income Tax has been delayed until the end of May, with major tax provisions waived for certain classes of taxpayers, the Ministry of Finance announced late on Feb. 6.

Under Circular No. 27/2009/BTC, enforcement will be delayed for resident taxpayers,
meaning most foreigners living and working in the country will still have to pay
their taxes under the new Law on Personal Income Tax, which took effect on Jan. 1.

Deputy Minister of Finance Do Hoang Anh Tuan confirmed that, since the circular was
issued in February, taxes withheld from January wages would be refunded.

The deferment of income taxes for Vietnamese citizens or those who have obtained
resident status is intended as an economic stimulus measure, aimed at spurring
consumer spending during the current economic downturn.

Current regulations authorise the Ministry of Finance to delay or defer a tax, but
the National Assembly is required to vote on any exemption or reduction in taxes.
Legislators are expected to further review the issue of applying permanent
reductions or exemptions when the National Assembly reconvenes in May.

Under the circular, taxes will be deferred on income from wages and salaries,
capital gains and transfers, royalties, commercial concessions and inheritances, but
there will be no deferral of taxes on income from real estate transactions, lottery
winnings or cash gifts.-Enditem