To: Tax Departments of Provinces and Cities Under Central Authority

Hanoi, 11 May 2002 2011

To: Tax Departments of provinces and cities under central authority

Through the implementation of Personal Income Tax Law in 2010, the General Tax Department guidelines clarify some issues relating to the taxable income, how to determine the payable tax amount, tax amount payable or overpaid, papertax finalization for the settlement of the personal income tax in 2010 as follows:

I.Subjects have to declare the settlement of personal income tax (PIT) in 2010:

1. Organizations and individuals must pay income tax credit, regardless of which generate no tax deduction or tax credit, shall have to declare personal income taxessettlement and the settlement instead of personal income tax for individualsauthorization.

For administrative units, business operations due to state budget funding, every month no tax deduction is temporary not have to file personal income tax settlement in 2010.

1. Organizations pay income consolidation, merger, division, termination of activities before the end of settlement activity to personal income tax withheld and certified personal income tax deduction for employees to do thefacilities for employees shall settle personal income tax last year.

In case the consolidation or merger, consolidation or organization may issue a merger of the tax deduction for the employees that the organization merged or merging organizations inherit all financial obligations, employment oforganizations consolidated or merged, consolidated or organizations merged organization to settle the tax withheld (including the organizations that are consolidating or merging organizations) and settled instead for the personal income taxthe labor organization's consolidation or merger if the organization authorized.

1. Resident individuals having income from salary, wages, income from business to personal income tax finalization of the cases:

+ Having a larger number of taxes deducted or advance tax paid;

+ Ask for reimbursement of overpaid tax.

1. Resident individuals having income from transfer of securities registered with the tax authorities of tax paid personal income tax rate of 20% of income to the tax settlement in the case:

+ There are documents and invoices to determine taxable income from the transfer of securities;

+ The payable tax amount taxed at the rate 20% greater than the number of temporary tax deduction at the rate of 0.1% in the year;

+ Ask for reimbursement of overpaid tax.

1. Individual residents who are overseas at the end of the contract work in Vietnam before leaving to make tax settlements with tax authorities.Case, a foreigner in a calendar year, an individual residing in Vietnam must be tax settlement from the beginning of the calendar year to December to leave Vietnam and be deducted from personal income tax already paid abroad byprovisions in the personal income tax law, unless a treaty on avoidance of double taxation between the two countries have different provisions.

II.Determine taxable income and taxable income personal income:

1. Taxable income from salary remuneration is determined by the total salaries, wages, remuneration, other income of the nature of salary or wages that the taxpayer received in 2010 under the directioninstructions in paragraph 2 of Section II of Part A of Circular No. 30/9/2008 84/2008/TT-BTC; Article 1 of Circular No. 27/3/2009 dated 62/2009/TT-BTC of the Ministry of Finance, Article 102/2010/TT-BTC Circular dated 11/01/2010 of the Ministry of Finance.

Incase income from salaries and wages paid in 12/2009 in 2010 have been included in income to determine taxable income for last 6 months of 2009 to the tax settlement shall not be declared as incometaxable in 2010 to settle again.

For example, income from salaries, wages 12/2009 by Mr. A was paid in 2010 shall be included in taxable income in 2010.This case, Mr. A has income into the income to determine taxable income for the last 6 months in 2009 to settle personal income tax are not required to declare taxable income in 2010 to settle again.

1. Individuals who are working abroad while in Vietnam and overseas income is defined as global income (not separate the income to pay for work in Vietnam), the total incomein Vietnam is determined as follows:

In case the foreigner individuals who are not present in Vietnam:

Total income
increase
in Vietnam / = / Total days
working in
Vietnam / x / Income from
salaries,
wages globally
(before tax) / x / Other taxable
income
(before taxes)
increase
in Vietnam

Total days
Working
in a year (*)

(*) Total number of working days in the year calculated according to the provisions of the Labor Code of Vietnam.

For other cases:

Total income
increase
in Vietnam / = / Total days
in
Vietnam / x / Income from
salaries,
wages globally
(before tax) / x / Other taxable
income
(before taxes)
increase
in Vietnam

365 days

Inside: Other taxable income (before taxes) increase in Vietnam are the other benefits in cash or not cash that foreign receivedexternal of salary or wages by the employer paid or pay protection for employee.

1. For income transferable securities:

Taxable income from transfer of securities is determined by stock price minus the purchase price, the costs related to the transfer.

Purchase
price / = / Real value of in Beginning balance + Real value purchase increate
Beginning balance + Amount the quantity purchased increate

III.Deductions are calculated when the tax settlement, as follows:

The definition of family circumstances deductions made under the guidance in Section I, Part B of Circular No.84/2008/TT-BTC dated 30/9/2008 of the Ministry of Finance; Article 2, Article 3 of Circular No. 62/ 2009/TT-BTC guidance on 03/27/2009 amendments and supplements Circular No.84/2008/TT-BTC date 30/9/2008 of the Ministry of Finance, Article 04 of Circular No. 02/2010/TT-BTC dated 11/01/2010 and additional guidance Circular No. 84/2008/TT-BTC dated 30/9/2008 of the Ministry of Finance. Incases being settled and the personal tax filing proof of dependents shall not be deducted from family circumstances.

Individual family circumstances to be deducted from the month dependent care obligations and change their dependents (regardless of date or obligation to nurture that change depending on the month or last month).For foreigners residing in Vietnam shall be deducted from his family situation to Vietnamuntil leavingVietnam.

Example: Mr. A has a child born on 27/7/2010 A shall be deducted from his family situation from October 7 / 2010 the amount was deducted from his family situation of 1.6 million per month.

Example: Mr. A is a foreign individual to Vietnam on 27/01/2010 and left Vietnam on 05/10/2010 then be deducted from his A family situation for himself since May 01/2010 to May 102010.

IV.Specify of tax payable:

1. Personal income tax payable for salary, wages are determined as follows:

-Specify of taxable income by the average monthly (=) total taxable income in 2010 divided (:) for 12 months;

-Specify the personal income tax to be paid each month equal (=) Income tax and the average monthly personal income tax rates associated with each progressive income tax;

-Specify the number of both personal income tax payable in 2010 equal (=) personal income tax to be paid each month (x) for 12 months;

-Specify amount of tax payable or overpaid equal (=) some of the personal income tax payable in 2010 minus (-) amount of tax withheld (if any).

For example, after the reduction of family circumstances 48 million for himself and two dependents 38.4 million (1.6 million persons × 2 × 12 months), social insurance and health insurance 20 millions.Also, no deductions other family circumstances.Taxable income of Mr. A in 2010 is 240 million:

Inside: January: 25million (including income from salary, wages and bonuses paid in the month 01/2010 in 2009 to 15 million) in February leave no income; March to September: 15million / month in October leaving no income, in November, December: 55 million per month.Mr. A's personal income tax is determined as follows:

Taxable income per month is:

240 million: 12 months = 20 million dong/1month

Personal income tax is a month:

20% × 20 million - 1.65 million = 2.35 million

Personal income tax in 2010 is:2.35 million × 12 = 28.2 million

1. Specify to pay personal income tax for foreigners who are resident in Vietnam in 2010 as follows:

-Specifyto taxable income by the average monthly (=) total taxable income from year-to-month leave Vietnam divided (:) for some months from year-to-time to leave Vietnam;

-Specifyto personal income tax to be paid each month equal (=) Income tax and the average monthly personal income tax rates associated with each progressive income tax;

-Identify to personal income tax payable (=) personal income tax to be paid each month (x) the number of months from year-to-time to leave Vietnam;

-Specify to amount of tax payable or overpaid by (=) personal income tax payable minus (-) amount of tax withheld (if any).

For example:

In 2010, Mr. A was a foreigner coming to Vietnam on 28 March and left Vietnam on 31 October, January and February, Mr. A has taxable income is 500 million personal income and personal income tax paid Mr. Aoverseas for this income 150 million.From March to October, Mr. A has income subject to personal income tax from salaries; wages in Vietnam is 700 million.Mr. A was family deduction for himself: 4 million/month, social insurance, health insurance and unemployment insurance 20 million.In addition, no other deductions (The country where he has signed a national agreement on the avoidance of double taxation with Vietnam).In this case, personal income tax payable in Vietnam is determined as follows:

+ Total number of months in Vietnam PIT: 10 months.

+ Total taxable income:

700 million + 500 million - 40 million - 20 million = 1140 million

+ Taxable income per month:

1140 million:10 months = 114 million

+ Personal income tax payable per month (under tax law in Vietnam) is:

35% × 114 million - 9.85 million = 30.05 million

+ Tax payable amount per month under the tax laws of Vietnam are:

30.05 million × 10 months = 300.5 million

+ Tax deductible for the distribution of income generated in foreign countries between proportional allocations of income earned abroad and the total taxable income is:

(500 million: 1200 million) × 300.5 million = 125.21 million

Amount Income tax Mr. A already paid abroad is 150 million bigger (>) 125.21 million amounts should be deducted by Mr. A personal income tax paid abroad is 125.21 million.

+ Amount personal income tax of Mr. A to be paid in Vietnamis:

300.5 million - 125.21 million = 175.29 million.

1. For income from transfer of securities:

1. Amount of tax payable (=) Income tax (x) 20% tax rate.
2. Specify amount of tax payable or overpaid by (=) the tax payable in the year minus (-)amount of tax paid.

V.Settlement procedures to declare personal income tax:

1. About declaration of tax finalization of the organization paying income:

1.1.Dossiers tax finalization:

1. Dossiers tax finalization for organizations and individuals to pay income from salaries and wages:

-Statement following form No. 05/KK-TNCN issued together with Circular No. 20/2010/TT-BTC dated 05/02/2010 of the Ministry of Finance and detailed list enclosedthis circular investment, as follows:

+ A list of income from salaries and wages paid to individuals who have signed labor contracts from 3 months in the form of 05A/BK-TNCN, regardless of income level have to pay taxes or not paytax.

+ A list of income from salaries and wages paid to individuals who do not sign labor contracts or has contracted to less than 3 months in the form No. 05B/BK-TNCN.

1. Dossiers tax finalization for organizations and individuals to pay income from capital investment, transfer of securities, copyrights, franchises, winning awards for individual and business income paid to individuals notresidents of the settlement declaration of personal income tax as form No.06/KK-TNCN and listing detail as form No.06B/BK-TNCN apply to income from transfer of securities issued attached Circular No.20/2010/TT-BTC Ministry of Finance.
2. For the insurance Agency settlement to declare personal income tax withheld from insurance agents in the form No. 02/KK-BH and listingdetail as form No. 02/KK-BH as Circular issued20/2010/TT-BTC of the Ministry of Finance.
3. For lottery agents to finalization PIT withheld from lottery agents in the form No.02/KK-XS and listing in detailform No.02A/BK-XS attached circular No.20/2010/TT-BTC of the Ministry of Finance.
4. The detailed list attached with the Statement must declare all income individuals, irrespective of the level of personal income tax deduction or not.

1.2.Submit Dossiers for apply the tax settlement:

-For organizations and individuals producing and trading: Submit Dossiers for apply the tax settlement in the tax offices directly managing the organization or individual business.

Incase the tax authorities receive in order, organizations and individuals to pay income filed for the organization is authorized.

-For other cases.

+ Central offices, agencies, the ministries, branches and provincial People's Committee, provincial agencies in filing tax returns Tax Department.

+ Agencies under or attached to the district People's Committees, district agencies in filing tax returns Tax Department.

+ The diplomats, international organizations, representative offices of foreign organizations,filing tax returns to Tax Department where they are headquartered agency or organization authorized to collect.

1.3.Time limit for filing tax settlement: at least 90 days after the end of 2010.

1. Declaration of tax finalization for individuals, groups and individuals dealing tax as declared:

2.1.For individual business

-Individuals who perform business declaration form of tax settlement as form No.09/KK-TNCN, appendix in the form No.09B/PL-TNCN issued attached Circular No. 20/2010/TT-BTC, 09C/PL denominatorPIT-issued together with Circular No.84/2008/TT-BTC (if any registered family circumstances deductions) and other documents evidencing payment of provisional tax in the year.

-Place of filing a tax settlement Tax Department directly manages.

-The deadline filing tax settlement is within 90 days after the end of 2010.

2.2.For individuals and business groups

-Personal representative's name for personal business groups documented in the form of finalization No.08B/KK-TNCN (issued with Circular No. 20/2010/TT-BTC of the Ministry of Finance) to specifytaxable income of the whole group and the taxable income of each individual business groups.

-Each individual in the business group received 01 original copy of the Statement of the group and make declarations of personal tax settlement.Settlement of tax declaration dossier for each individual business groups are:

+ Tax Statement of individuals and business groups (in the form No.08B/KK-TNCN issued with Circular No. 20/2010/TT-BTC of the Ministry of Finance).

+ Tax Declaration Form No. 09/KK-TNCN issued Circular No. 20/2010/TT-BTC of the Ministry of Finance, in the form No.09C/PL-TNCN Appendix issued with Circular No.84/2010/TT-BTC Ministry of Finance (if any registered family circumstances deductions).

+ The document has the temporary personal income tax in the period.

-Place of filing a tax settlement Tax Department where business groups and individuals conducting business.

-The duration of filing personal income tax settlement is within 90 days after the end of 2010.

2.3.For households and business have many shops, department stores, including stores and shops have 10 of the tax code and stores and shops have 13 of the tax code should tax settlement sum in the declarationstax settlement of shops, stores with 10 of the tax code.

1. Declaration of tax finalization for resident individuals having income from salary or wages:

3.1.Dossiers tax finalization:

-Statement of 09/KK-TNCN tax form, Form No. 09A/PL-TNCN Appendix issued together with Circular No. 20/2010/TT-BTC of the Ministry of Finance, Appendix Form No. 09C/ PL-PIT (if any registered family circumstances deductions) issued Circular No. 84/2008/TT-BTC of the Ministry of Finance;

-The documents proving the tax was deduction, was temporarily paid in the period, the declaration base on the evident issue by payer

-If the income received from international organizations, Embassies, Consulates and receive income from abroad must have documentation or certification of the amount paid by units and organizations to pay incomeabroad and accompanied by a confirmation letter in the form No.20/TXN-TNCN issued with Circular No.84/2008/TT-BTC of the Ministry of Finance.

3.2.Where to submit the Dossiers tax finalization:

1. Incase individuals with incomes from salary, wages in one will be submit application in the tax offices directly managing paid income units.
2. Incase individuals do not sign labor contracts or contract workers under 3 months were 10% deduction tax, will be submit the application in the tax office where the individual resides.
3. Incase individuals have income from salary and wages from two or more :

-Individuals with incomes from salaries, wages from two or more, will be submit at the tax office where manage the organizations and individuals to pay personal income that have signed labor contracts over 3 monthsand family circumstances deductions registration documents along with the tax deduction elsewhere;

-If a registered individual family deductions for themselves in an organization to pay will be submit the application in tax office manage the organization units that payer income;

-If individuals have not yet registered family deductions to the organization to payerwill be submit the application in the tax office manage the where resides.

1. Incase individuals have income from salary and wages directly filing tax settlement every month, will be submit application to tax office where individuals are filing tax returns months.

Example: Mr. X is the head of Rep. Office inVietnam and receiving income from abroad.From 01 January 2010 to 15 Sep 2010 Mr. X working in Hanoi and doing the tax declaration in Hanoi Tax Department.From 01 October 2010 Mr. X transfer to working in Ho Chi MinhCity and doing taxdeclaration in Ho Chi Minh City tax department.So, Mr. X will be submitapplying the tax settlement in 2010 in the Tax Department of Ho Chi Minh City.

3.3.Incase individuals have only one source of income from salary, wages in an organization pay income tax settlement for the authorization to payer income organizations.Individual authorization through settlement organizations pays income payable to the organization paying income following papers:

-Power of authorization for PIT finalization form No. 04-2/TNCN issued with Circular No.14/6/2007 dated 60/2007/TT-BTC of the Ministry of Finance;

-Invoices and documents evidencing the amounts deducted, such as receipts closed charitable, humanitarian, education promotion; receipts closed the coverage required under the provisions (if the individuals themselvesclosed); ....

Individuals were held to pay income settlements rather not have to make the personal income tax settlement procedures under the guidance in Circular No.84/2008/TT-BTC of the Ministry of Finance.Where individuals have been held, paid personal income certificate from the personal income tax deduction is not authorized to organizations and individuals to pay personal income tax revenue settlement (unless revoked and canceled PIT evident issue for to individuals).