Receiving record bonus, U23 Vietnam does not have to pay personal income tax

Pham Huyen• January 29, 2018 21:39

Tens of billions of dong in bonuses for the U23 Vietnam players will not be subject to personal income tax, Ms. Nguyen Thi Hanh, Director of the Personal Income Tax Department, General Department of Taxation, confirmed.

According to a source, the estimated bonus rain must have reached 30 billion, instead of just 20 billion before the Vietnam U23 team played the final match of the 2018 AFC Cup in Changzhou, China. Currently, the Vietnam Football Federation does not have exact statistics. However, this is a record bonus amount never seen before for a team in the history of Vietnamese football.

Answering the question, do players have to pay personal income tax (PIT) at a high rate of up to 35%? Ms. Nguyen Thi Hanh, Director of the PIT Department, General Department of Taxation said: "Players are completely entitled to the above bonus without having to pay PIT as some recent controversial opinions".

Vietnam U23 team.

Specifically, Ms. Hanh explained that the “bonus” that businesses, donors, and organizations give to the U23 team is a colloquial term that the press reports. According to the Personal Income Tax Law, it is a “gift”, which is also a form of income for individuals.

However, the Law as well as Decree 65 and especially Article 2, Clause 10, Circular 111 guiding personal income tax clearly state that individuals will have to pay personal income tax when receiving gifts in 4 forms including securities, corporate capital, real estate and assets that must be registered for ownership such as cars, motorbikes, yachts, sports guns, etc.

Thus, the bonus for U23 players is not a gift in the 4 gift groups above and is not an asset that requires ownership rights such as "red book, pink book" for houses, or "registration certificate" for vehicles, so it does not have to pay tax.

Learning more about this issue, it can be seen that bonuses according to the Personal Income Tax Law such as holiday bonuses, Tet bonuses, etc. from agencies and organizations for employees will still be subject to personal income tax. This is a type of income from wages and salaries and will be subject to tax according to the current progressive tax schedule. The highest tax rate is 35% for an average income of 80 million/month or more, after family deductions.

However, bonuses from employers, if attached to titles, medals, badges, certificates of merit of the State, attached to domestic and international awards, the individual receiving the bonus does not have to pay personal income tax.

In other words, even the bonus of more than 1.2 billion VND from the Vietnam Football Federation (VFF) for the U23 Vietnam team is not subject to tax.

According to preliminary information, a number of organizations and individuals have announced to give bonuses to the Vietnam U23 team such as Vietnam Professional Football Joint Stock Company (VPF) with a bonus of 1 billion VND, the Ministry of Culture, Sports and Tourism with a bonus of 2 billion VND, Vietcombank with a bonus of 1 billion VND; corporations such as Group, Tuan Chau FLC, Hoa Binh,... each unit with a bonus of 1 billion VND.