Mr. Dai's company also provides cash support to build houses of gratitude for poor households, and pays sick visits to employees' relatives. Does the company have to declare and deduct PIT for gifts with money spent on poor households? Is the visitation amount added to your income to calculate PIT?

Hanoi City Tax Department responds to this question as follows:

Pursuant to Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance 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 The Government's ND-CP 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 guides as follows:

In Clause 10, Article 2, taxable income from receiving gifts is as follows:

Income from gift receipt is an individual's income received from domestic and foreign organizations and individuals, specifically as follows:

a) For receiving gifts of securities, including: Shares, stock options, bonds, bills, fund certificates and other types of securities in accordance with the Law on Securities; shares of individuals in a joint-stock company in accordance with the Law on Enterprises.

b) For the receipt of gifts as capital in economic organizations, business establishments include: Capital in limited liability companies, cooperatives, partnerships, business cooperation contracts, capital in private enterprises, business establishments of individuals, capital in associations and funds permitted to be established in accordance with law, or the entire business establishment if it is a private enterprise, or an individual's business establishment.

c) Real estate gifts include: Land use rights; the right to use land with assets attached to the land; home ownership, including future housing; infrastructure and construction works attached to the land, including construction works to be formed in the future; the right to lease land; the right to rent water surface; other income received from inheritance is immovable in any form; minus income from gifts being real estate guided at Point d, Clause 1, Article 3 of this Circular.

d) For the receipt of gifts being other assets, ownership or use rights must be registered with the State management agency, such as: Cars; motorcycles, mopeds; ships, including barges, canoes, tugs and pushers; boats, including yachts; airplane; hunting rifles, sports guns".

Pursuant to Item g.1, Point g, Clause 2, Article 2 of Circular No. 111/2013/TT-BTC guiding the implementation of the Law on PIT, providing for items not included in taxable income:

"Article 2. Taxable incomes

… g) Not included in taxable income for the following items:

g.1) Employer's support for critical illness examination and treatment for the employee himself and the employee's relatives.

g.1.1) Relatives of employees in this case include: natural children, legally adopted children, illegitimate children, stepchildren of spouses; wife or husband; biological father, natural mother; father-in-law, mother-in-law (or father-in-law, mother-in-law); stepfather, stepmother; adoptive father, legal adoptive mother.

g.1.2) The level of support that is not included in taxable income is the actual amount paid according to the hospital fee payment voucher but must not exceed the hospital fee payment amount of the employee and employee's family after deducted from the amount paid by the insurance organization.

g.1.3) The employer paying the support is responsible for: Keep a copy of the medical fee payment voucher certified by the employer (in case the employee and the employee's family pay the remaining fee after the insurance organization pays directly to the medical facility) or a copy of the document of payment of hospital fees; a copy of the health insurance payment voucher certified by the employer (in case the employee and the employee's relatives pay the entire hospital fee, the insurance organization pays the insurance premium for the employee and relatives of employees) together with vouchers of payment of support for employees and relatives of employees suffering from serious diseases.

Pursuant to the above provisions, the case that your company pays gifts in cash is not subject to the provisions of Clause 10, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2013, so it is not eligible for PIT payment.

In case his company spends as a gift of house ownership, including houses to be formed in the future according to the provisions of Item c, Clause 10, Article 2 of Circular No. 111/2013/TT-BTC dated August 15 2013 is subject to PIT.

In case his company pays sick visits to employees' relatives, if this support is not included in the amounts not included in taxable income specified at Point g, Clause 2, Article 2 of Circular No. 111 /2013/TT-BTC, this expenditure is subject to PIT.

For expenses subject to PIT, the company is responsible for declaring and deducting PIT before paying income.