The Ministry of Finance is proposing to develop a draft Law on Personal Income Tax (replacement), in which it proposes to study and supplement regulations on reducing personal income tax on income from salaries and wages of individuals who are high-tech human resources.
Apply special incentive mechanisms and policies to attract and effectively use high-tech human resources at home and abroad.
The Ministry of Finance has proposed to study and supplement regulations on personal income tax (PIT) reduction for income from salaries and wages of individuals who are high-tech human resources (CNC) working at enterprises and projects in the fields of information technology (IT), agriculture, and agricultural product processing, including: CNC enterprises, CNC agricultural enterprises, CNC application projects in the list of CNC products prioritized for investment and development, CNC product manufacturing projects in the list of CNC products encouraged for development.
Explaining this proposal, the Ministry of Finance said that Article 5 of the Law on PIT stipulates: Taxpayers facing difficulties due to natural disasters, fires, accidents, and serious illnesses that affect their ability to pay taxes will be considered for tax reduction corresponding to the level of damage but not exceeding the amount of tax payable. This provision demonstrates the State's concern and support in cases where taxpayers face difficulties.
According to the current Personal Income Tax Law, the preferential exemption and reduction of personal income tax does not apply to individuals who are CNC human resources, while this is an important labor force that needs appropriate development incentives. The CNC Law also stipulates that the State focuses on investing in developing CNC human resources to reach regional and international standards; applying special incentive mechanisms and policies to train, attract and effectively use domestic and foreign CNC human resources, talented young forces in research, teaching, CNC incubation, CNC business incubation and other CNC activities (Clause 3, Article 4 of the CNC Law); Focusing on investing in CNC development in 04 technological fields: information technology, biotechnology, new materials technology, and automation technology. The CNC Law also stipulates that the Government is assigned to adjust and supplement the technology fields that need to focus on investing in CNC development depending on the needs of socio-economic development, national defense and security, in which CNC is guaranteed to be prioritized for investment and development in technology fields that must be suitable to the requirements and trends of advanced and modern science and technology development in the world, promote the country's advantages, be feasible and meet one of the specific conditions (Article 5 of the CNC Law).
Developing science and technology and CNC human resources is one of the important factors to increase productivity and promote economic growth. To further develop the science and technology sector, it is necessary to have policies focusing on attracting highly qualified individuals to participate in areas such as information technology or priority areas such as agriculture and agricultural processing. This is also a policy applied by a number of countries in the world. Accordingly, it is necessary to study and supplement appropriate regulations in the Personal Income Tax Law on the income of individuals who are CNC human resources working in enterprises such as: CNC enterprises, CNC application agricultural enterprises, CNC application projects in the list of CNC products prioritized for investment and development, CNC product manufacturing projects in the list of CNC products encouraged for development. The reduction of personal income tax for this group of subjects needs to be studied, ensuring harmony between the goals of encouraging the subjects that need to be prioritized to attract, maintaining a reasonable level of State budget mobilization and not distorting the role of personal income tax policy.
Because determining individuals as CNC human resources depends on many criteria as well as the development orientations of the country in each period. In case of adding regulations on reducing personal income tax for these subjects, it is also necessary to study to have regulations on criteria for determining individuals as CNC human resources to serve as a basis for implementation in the direction of assigning the Prime Minister to specify.
Proposal to delegate authority to the Prime Minister to decide on tax exemption in some special cases
The draft also proposes: Adding regulations assigning the Prime Minister to allow tax exemption in some special cases: foreign experts working in programs and projects funded by official development assistance (ODA); foreign experts working in foreign non-governmental programs and projects in Vietnam; Vietnamese individuals working at representative offices of international organizations under the United Nations System in Vietnam who are currently subject to tax exemption policies according to the Prime Minister's Decisions before the current Personal Income Tax Law takes effect, thereby ensuring the consistency of the tax law system and ensuring a transparent and stable legal basis.
In the current period, the preferential policy of exemption from personal income tax for foreign experts implementing ODA programs and projects and foreign non-governmental aid is still necessary to encourage and attract foreign loans and aid, creating favorable conditions for international organizations operating in Vietnam. At the same time, the policy of exemption from personal income tax for Vietnamese employees working for representative agencies of international organizations belonging to the United Nations system also needs to be maintained to ensure equality in tax obligations, because the salary that Vietnamese employees receive has fulfilled their income tax obligations according to the regulations of the United Nations. This tax is retained by the representative agency of the United Nations and considered as national income tax and put into the United Nations Tax Stabilization Fund and deducted from the annual contribution of the country to the United Nations budget.
Accordingly, to ensure the consistency of the tax law system and ensure the legal basis, it is necessary to study and supplement the provisions of the Personal Income Tax Law on the content of assigning the authority to the Prime Minister to decide on tax exemption in some of these special cases. These are also the subjects that are currently exempted from tax according to sub-law documents before the current Personal Income Tax Law comes into effect.
Khanh Linh
According to Government Electronic Newspaper