Common mistakes regarding personal income tax (PIT)?


- Amount of housing rental allowance: 

The house rent paid by the enterprise on behalf of the employee is included in the taxable income according to the actual amount paid. However, not exceeding 15% of total taxable income. This income does not include the rent. 

- Types of membership cards that employees are entitled to: 

+ For membership cards: golf course, tennis, sports, club activities ...: If the membership card states the name of the employee to be entitled to, this expense shall be included in taxable income of that employee. If a member's membership card is not registered but is shared with the whole group, this expense is not included in the employee's taxable income. These costs will instead be incorporated into the costs of the business. 

+ Similar to other services related to health care, aesthetic entertainment ...: If the contents clearly state the name of the individual entitled to enjoy, that expense must be included in the individual's taxable income. If the name of the beneficiary is not specified, but it is spent on the collective, this expense is not included in the employee's PIT. These costs will instead be incorporated into the costs of the business. 

However, it must be reasonable to be included in deductible expenses: This expense must be in the regulations or collective labor agreement of the enterprise, with specific decisions on the member card opening or allow employee to enjoy this service. 


- Expenses for stationery, business trip, costumes.... 

+ These stationery items or business travel expenses will not be included in the taxable income provided they comply with the regulations and are specified in one of the documents: collective labor agreement, labor contract, company regulations. 

+ Meal allowance: 

In case of cash payment: From October 15, 2016 when Circular 26/2016 / TT-BLDTBXH takes effect. The maximum amount of mid-shift meal expenses for employees does not exceed VND 730,000 / person / month. If the enterprise spends more than this amount, the excess will be subject to PIT for the employee. At the same time, the enterprise is not included in deductible expenses. 

If the shift meal allowance is made by self-cooking: If the enterprise organizes the shifts in the form of self-cooking, there is no limit on the expenditure. However, it is necessary to have sufficient invoices and documents. 

+ Costume allowance: 

If paying in cash: The expenses will be calculated according to the actual expenses but not exceed VND 5,000,000 / person / year. 

If the costumes are spent in kind: The spending will not be limited. However, there must be reasonable and valid invoices and documents for this costume. 

+ Expenses for vehicles transporting workers from residence to workplace and vice versa are not included in the employee's taxable income. 


- Expenses for technical innovations and inventions recognized and paid by competent state agencies will not be included in taxable income. However, if the enterprise continues to pay the bonus after that, the bonus will be subject to PIT. 


- Cash payments on behalf of employees for training to improve qualifications and skills. That course is suitable for the employee's expertise or according to the employer's plan, it is not included in the employee's taxable income. 


- The employee's or employee's relative medical care allowance will not be included in income subject to PIT. 


- Wages paid for overtime work on holidays, paid leave, overtime at night that are paid higher than normal hourly wages, the higher paid part of income is subject to PIT.