The Ministry of Finance issued the Circular No. 128/2014/TT-BTC dated September 05, 2014 guiding the reduction of personal income tax for individuals working in economic zones and border-gate economic zones, including individuals persons who sign labor contracts with economic zone management boards and state management agencies; individuals persons who labor contracts with organizations and individuals having business establishments in economic zones and actually work in economic zones….
Accordingly, For residents having taxable incomes, Temporarily paid income tax amount reduced is equal to the temporarily paid or deducted personal income tax amount (monthly, quarterly or each arising time) multiplied by 50% for determination of temporarily paid income tax amount and the to-be-reduced income tax amount is equal to the total payable income tax amount multiplied by 50%. For non-residents, the reduced personal income tax amount shall be the total taxable income in economic zones multiplied by (x) the tax rate applicable to non-residents multiplied by (x) 50%.
For individuals doing business in economic zones before January 1, 2009, and earning incomes from their business who are entitled to investment incentives under the Law on Enterprise Income Tax by the end of December 31, 2008, if the enterprise income tax exemption period has not yet expired, they will enjoy personal income tax exemption till the expiration of the remaining tax exemption period and after that, enjoy 50% reduction of personal income tax.
This Circular takes effect on October 20, 2014 and replaces the Circular No. 176/2009/TT-BTC dated September 09, 2009.
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