ANALYSIS OF LAW ON PERSONAL INCOME TAX PRACTICES IN VIETNAM .... 25 Trang 6 CHAPTER I: INTRODUCTION Rationale of the research Uyển Nhi Scope of research Research methods Aim and objecti
FOREIGN TRADE UNIVERSITY Faulty of International Economics -*** GROUP ASSIGNMENT Taxation and Tax System in Vietnam LAW ON PERSONAL INCOME TAX Lecturer Class code Group Member list : : : : Trần Nguyên Chất ML143 14 Trần Thẩm Quỳnh - 1911155074 Vũ Thành Nam – 1911155053 Vũ Uyển Nhi - 1911115364 Vương Tú Vy - 1911155107 Nguyễn Phạm Thu Uyên - 1911155098 Ho Chi Minh, August 2022 TABLE OF CONTENT CHAPTER INTRODUCTION 1.1 Rationale of the research 1.2 Aim and objectives 1.2.1 Aims 1.2.2 Objectives 1.3 Scope of research 1.4 Research methods CHAPTER LAW ON PERSONAL INCOME OVERVIEW 2.1 Definition 2.2 Historical development of PIT law in Vietnam 2.3 Characteristics of PIT law No.71/2014/QH13 in Vietnam 2.4 Components of PIT law No.71/2014/QH13 in Vietnam 2.4.1 Individuals liable to PIT and tax resident status 2.4.2 Taxable income 2.4.3 Tax-exempt incomes 2.4.4 Tax bases CHAPTER ANALYSIS OF LAW ON PERSONAL INCOME TAX PRACTICES IN VIETNAM 10 3.1 Current legal documents of PIT in Vietnam 10 3.2 Achievements of personal income tax in Vietnam 12 3.3 Existing issues and limitations 13 3.4 Examples of personal income tax law application 14 3.5 Comparison with Singapore PIT law and implementations 15 3.5.1 Rationale of the selection of Singapore’s PIT for comparison 15 3.5.2 Resident income tax rate in Singapore and implications 16 3.5.3 Non-resident income tax rate in Singapore and implications 19 3.5.4 Implications 21 3.6 Findings on the execution of Vietnam’s personal income tax 21 3.6.1 Tax grade issues in Vietnam’s personal income tax 21 3.6.2 Issues on tax rate applicable to income from investment 22 3.6.3 Technological application in personal income tax administration 23 CHAPTER RECOMMENDATIONS FOR LAW ON PERSONAL INCOME TAX 25 4.1 Practical adjustments regarding tax rates for tax bracket levels 25 4.2 Flexible and on-time of personal income tax revision based on CPI 27 4.3 Technological implementation in tax management 27 CONCLUSION 29 REFERENCE 31 LIST OF TABLES Table 2-1 The partially progressive tax rate for residents Table 2-2 The whole income tax rate for residents Table 2-3 The PIT tax rate for non- residents 10 Table 3-1 Annual PIT revenue from 2007 to 2021 12 Table 3-2 Progressive resident tax rate in Singapore from YA2017 to YA2023 18 Table 3-3 Non-resident individual tax rate in Singapore 20 Table 4-1 Tax rates and bands of personal income tax in UK 25 LIST OF FIGURES Figure 3-1 Personal income tax rate on investment income in some countries in 2016 23 Work Allocation of Group 14 CHAPTER I: INTRODUCTION Rationale of the research Scope of research Research methods Aim and objectives Definitions and Characteristics of PIT law in Vietnam Historical development of PIT law in Vietnam CHAPTER II: OVERVIEW Characteristics of PIT law No.71/2014/QH13 in Vietnam Components of PIT law No.71/2014/QH13 in Vietnam Current legal documents of PIT in Vietnam Achievements of personal income tax in Vietnam Existing issues and limitations CHAPTER III: ANALYSIS OF PIT PRACTICES IN VIETNAM Examples of personal income tax law application Comparison with Singapore PIT law and implementations Findings on the execution of Vietnam’s personal income tax Practical adjustments regarding tax rates for tax bracket levels CHAPTER IV: Flexible and on-time of personal RECOMMENDATIONS income tax revision based on CPI Technological implementation in tax management CONCLUSION Formatting Uyển Nhi Thẩm Quỳnh Thành Nam Tú Vy Thu Uyên Uyển Nhi Uyển Nhi Document continues below Discover more from: Taxation KTEE301.4 Trường Đại học… 75 documents Go to course Mind Map - PIT Taxation 100% (1) Taxation - June 2021 Taxation 100% (1) Tax return advice Taxation None Cơ cấu thuế hiệu cho vận tải… Taxation None Tax ML143 K58CLC Detailed outline… Taxation 26 None Taxation - văn luật Taxation CHAPTER INTRODUCTION 1.1 Rationale of the research Personal income tax (PIT) has been around for a long time in tax history and is considered the most important tax to achieve the goal of social justice Up to now, Personal Income Tax has become a basic tax, playing a central role in the tax system of countries around the world, especially developed countries Because in addition to the purpose of redistribution, personal income tax is also a form of tax with a high proportion of contribution to the total state budget revenue (state budget) In recent years, the personal income tax of the countries is stipulated in the Law on Personal Income Tax and the reform of the personal income tax has been carried out in many countries around the world in such aspects as regulations on family circumstances reduction; the personal income tax rate; taxable income and taxexempt income; and regulations on tax administration reform In Vietnam, the predecessor of Personal Income Tax was the salary income tax in 1962, then from 1972 it was changed to PIT On December 27, 1990, the State promulgated the Ordinance on Income Tax for high-wage earners Over a period of application of the Ordinance, besides the positive aspects, there are also certain shortcomings such as unfairness and efficiency, etc., thus limiting the important role of PIT On November 21, 2007, the 12th National Assembly promulgated the Law on Personal Income Tax and officially took effect from January 2009 The system of Personal Income Tax policy documents includes 03 Laws (Law No 04/2007/QH12; Law No 26/2012/QH13; Law No 71/2014/QH13); 03 guiding decrees; 02 consolidated documents and 08 guiding circulars issued by the Ministry of Finance The promulgation of the Law on Personal Income Tax and guiding documents is a step forward in the efforts to reform PIT in Vietnam, creating a legal basis to contribute to income control However, how to enforce the law to both promote efficiency and ensure the fairness of PIT is a controversial issue among economists as well as society as a whole Besides the achieved results, the PIT policy system still has some limitations that need to be assessed and overcome to enhance equality and None efficiency Some provisions of the current Law on Personal Income Tax are still complicated, arise administrative procedures, not create favorable conditions for taxpayers and are difficult for tax administration; there is no appropriate tax policy to attract individuals who are high-tech human resources; Tax policy for individuals with income from winning is not appropriate Continuing to improve the personal income tax set out in the current conditions is an urgent issue, in order to meet the requirements of the renovation process national financial policy mechanism in general and practical service for tax reform with high results On November 18, 2016, the Politburo issued Resolution No 07-NQ/TW on policies and solutions to restructure the state budget and manage public debt to ensure a safe and sustainable national finance In Resolution No 07-NQ/TW, the goal of restructuring the state budget was set in the direction of ensuring a safe and sustainable national finance, contributing to macroeconomic stability At the same time, one of the solutions to achieve the above goal is to focus on restructuring revenue sources; perfecting the collection policy in association with the restructuring of the state budget in the direction of covering all revenue sources, expanding the revenue base, especially new revenue sources in line with international practices; increase the proportion of domestic revenue, ensure a reasonable ratio between indirect taxes and direct taxes, exploit taxes from property and natural resources well, protect the environment, minimize the integration of social policies in taxes and policies on tax exemption and reduction, ensuring tax neutrality, contributing to creating a favorable and fair investment and business environment, encouraging investment, and regulating reasonable income Therefore, in order to institutionalize the Party's and State's guidelines and views on tax policy in general and personal income tax in particular, it is necessary, contributing to building a synchronous tax policy system, in line with the best practices and practices tax reform trends in the world, ensuring fairness and encouraging people to work and get rich legally 1.2 Aim and objectives 1.2.1 Aims The thesis aims at the following two basic purposes: Overall research objective: Systematize the theoretical basis of Law on personal income tax, analyze the reform trend of PIT policy of countries around the world, evaluate the current situation of Vietnam's personal income tax policy, from That set out a number of orientations and recommendations for amendments to improve the PIT policy in the coming time, contributing to the implementation of the Strategy for Tax System Reform for the 2011-2020 period issued by the Prime Minister in Decision No 732 /QD-TTg dated 17/5/2011 Specific objectives: Systematize the theoretical basis of PIT, especially clarify the content of the tax base, tax calculation method, tax rates and PIT management; study international experiences, assess trends; policy analysis, current situation of Vietnam's personal income tax policy; give specific recommendations on Vietnam's PIT policy 1.2.2 Objectives The research object of the thesis is the Law on Personal Income Tax based on subjective and objective dynamics that govern all aspects of economic, political, and social life; are solutions to promote and develop the Law on Personal Income Tax in the context of globalization 1.3 Scope of research Analysis of The Law on Personal Income Tax include a great deal of knowledge about the purpose of the law, the revisions, as well as the impact of the law on many different aspects, the methods of calculation and the difference between Law on Personal Income Tax in Vietnam compared to other countries in the era of globalization and integration In addition to studies on the role and status of the law, research topics include the practice of applying the law from the perspective of tax collectors and taxpayers The research of the thesis is limited in the period when the personal income tax code is passed in 2007, used and revised up to now in 2022 The above-mentioned