THE MINISTRY OF FINANCE
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No. 176/2009/TT-BTC
Hanoi, September 09, 2009
 
CIRCULAR
GUIDING THE REDUCTION OF PERSONAL INCOME TAX FOR INDIVIDUALS WORKING IN ECONOMIC ZONES
 
Pursuant to November 21, 2007 Law No. 04/2007/QH12 on Personal Income Tax and the Government’s Decree No. 100/2008/ND-CP dated September 8, 2008, detailing a number of articles of the Law on Personal Income Tax;
Pursuant to November 29, 2006 Law No. 78/2006/QH11 on Tax Administration and the Government’s Decree No. 85/2007/ND-CP dated May 25, 2007, detailing a number of articles of the Law on Tax Administration;
Pursuant to the Government’s Decree No. 100/2008/ND-CP dated September 8, 2008, detailing a number of articles of the Law on Personal Income Tax;
Pursuant to Clause 5, Article 16 of the Government’s Decree No. 29/2008/ND-CP dated March 14, 2008, providing for industrial parks, export-processing zones and economic zones;
Pursuant to Article 10 of the Prime Minister’s Decision No. 33/2009/QD-TTg dated March 2, 2009, promulgating some financial mechanisms and policies applicable to border-gate economic zones;
Pursuant to the Government’s Decree No. 118/2008/ND-CP dated November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
In furtherance of the Prime Minister’s directing opinions in the Government Office’s Official Utters No. 502/VPCP-KTTH dated January 20, 2009, and No. 3045/VPCP-KTTH dated June 11, 2009, guiding the application of personal income tax;
The Ministry of Finance guides the reduction of personal income lax for individuals working in economic zones and border-gate economic zones (below collectively referred to as economic zones) as follows:
Article 1.
Subjects and scope of application
1. Eligible for reduction of personal income tax under the guidance in this Circular are Vietnamese and foreign individuals who are residents and non-residents in Vietnam under tax laws and directly work in economic zones, including:
a/ Cadres, civil servants and persons who sign labor contracts with economic zone management boards and state management agencies located in economic zones and actually work in economic zones.
b/ Laborers who sign labor contracts with organizations and individuals having business establishments in economic zones and actually work in economic zones.
c/ Laborers who work for organizations and individuals located outside economic zones who are sent to work in economic zones to perform economic contracts signed between these organizations and individuals and economic zone management boards or organizations or individuals conducting investment, production and business activities in economic zones.
d/ Individuals and groups of individuals who have fixed places of business in economic zones, conduct production and business activities under business registration certificates in economic zones and earn taxable income from business activities under the Law on Personal Income Tax.
2. Cadres, civil servants and contractual employees of economic zone management boards, state management agencies and organizations and individuals conducting investment, production and business activities in economic zones who do not directly work in economic zones are ineligible for reduction of personal income tax under this Circular.
Article 2.
Taxable incomes used as a basis for consideration for tax reduction
Incomes used as a basis for calculation of personal income tax amounts to be reduced under this Circular include:
- Taxable incomes from salaries or wages paid by state management agencies or organizations and individuals having business establishments in economic zones to those who work in economic zones or paid by organizations or individuals located outside economic zones to those who are sent to work in economic zones to perform economic contracts signed with economic zone management boards or organizations and individuals conducting investment, production and business activities in economic zones;
- Taxable incomes from production and business activities conducted in economic zones of individuals or groups of individuals who are granted business registration certificates in economic zones.
From January 1, 2009, incomes from salaries or wages and incomes of individuals directly conducting production and business activities in economic zones shall be determined under the Finance Ministry’s Circular No. 84/2008/TT-BTC dated September 30, 2008, and Circular No. 62/2009/TT-BTC dated March 27, 2009, amending and supplementing Circular No. 84/2008/TT-BTC dated September 30, 2008.
In case the Ministry of Finance provides other methods of determining incomes liable to personal income tax, these regulations will apply.
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