Are Tet bonuses taxable?

Many employees receive Tet bonuses and declare and settle their personal income tax every year. So is the Tet bonus a taxable income? YouMe Law Firm LLC answers this question as follows:

Clause 1, Article 104 of the 2019 Labor Code stipulates bonuses as follows:

“1. Bonus is the amount of money or property or in other forms that the employer rewards the employee based on the production and business results and the level of work completion of the employee.”
Point a) Clause 2, Article 3 of the 2007 Law on Personal Income Tax, amended by the Law on Amending and Supplementing a Number of Articles of the 2012 Law on Personal Income Tax, stipulates taxable income as follows:

“2. Income from salaries and wages, including:

a) Salaries, wages and amounts of the nature of salaries and wages;”
Point a) Clause 2, Article 3 of Decree No. 65/2013/ND-CP detailing a number of articles of the Law on Personal Income Tax and the Law amending and supplementing a number of articles of the Law on Personal Income Tax stipulates taxable income as follows:

“2. Income from salaries and wages that employees receive from employers, including:

a) Salaries, wages and amounts of the nature of salaries and wages received in cash or non-cash forms.”

In addition, according to Point e) Clause 1 Article 2 of Circular No. 111/2013/TT-BTC guiding the implementation of the Law on Personal Income Tax, the Law on amending and supplementing a number of articles of the Law on Personal Income Tax and Decree No. 65/2013/ND-CP of the Government detailing a number of articles of the Law on Personal Income Tax and the Law on amending and supplementing a number of articles of the Law on Personal Income Tax, taxable income is regulated as follows:
“According to the provisions of Article 3 of the Law on Personal Income Tax and Article 3 of Decree No. 65/2013/ND-CP, taxable income includes:
e) Cash or non-cash bonuses in any form, including bonuses in securities, except for the following bonuses:
e.1) Bonuses accompanying titles conferred by the State, including bonuses accompanying emulation titles, forms of commendation according to the provisions of the law on emulation emulation, rewards, specifically:
e.1.1) Bonuses accompanying emulation titles such as National Emulation Fighter; Emulation Fighter at the level of Ministries, branches, Central organizations, provinces, centrally-run cities; Emulation Fighter at the grassroots level, Advanced Labor, Advanced Fighter.
e.1.2) Bonuses accompanying forms of rewards.
e.1.3) Bonuses accompanying titles conferred by the State.
e.1.4) Bonuses accompanying awards awarded by Associations, organizations under Political Organizations, Socio-political Organizations, Social Organizations, Socio-professional Organizations of the Central and local levels in accordance with the charters of such organizations and in accordance with the provisions of the Law on Emulation and Rewards.
e.1.5) Bonuses accompanying Ho Chi Minh Prizes, State Prizes.
e.1.6) Bonuses accompanying Commemorative Medals, Badges.
e.1.7) Bonuses accompanying Certificates of Merit, Certificates of Merit.
The authority to decide on rewards, the amount of rewards accompanying the above emulation titles, and the forms of rewards must comply with the provisions of the Law on Emulation and Rewards.
e.2) Rewards accompanying national and international awards recognized by the State of Vietnam.
e.3) Rewards for technical improvements, inventions, and discoveries recognized by competent State agencies.
e.4) Rewards for detecting and reporting violations of the law to competent State agencies.”

Thus, Tet bonuses in cash or non-cash in any form are subject to personal income tax because they are amounts similar to salaries and wages that employers reward employees based on production and business results and the level of work completion of employees and are not included in the bonuses exempted from personal income tax according to regulations. Employees will have to pay taxes after deducting deductions (family deductions, social insurance premiums, etc.) to reach the level of personal income tax.