DECREE

DETAILING A NUMBER OF ARTICLES OF THE LAW ON PERSONAL INCOME TAX

THE GOVERNMENT

DECREES:

GENERAL PROVISIONS

Article l. - Scope of regulation

This Decree details a number of articles of the Law on Personal Income Tax and provisions on personal income tax registration, declaration and finanlization under the Law on Personal Income Tax.

Article 2. - Taxpayers

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a/ For resident individuals, their taxable incomes are incomes earned inside and outside the Vietnamese territory, regardless of when their incomes are paid;

b/ For non-resident individuals, their taxable incomes are incomes earned in Vietnam, regardless of where their incomes are paid.

2. A resident individual means a person who satisfies any of the following conditions:

a/ Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of his/her presence in Vietnam;

Individuals present in Vietnam under this Point means those whose

Presence is in the Vietnamese territory.

b/ Having a place of habitual residence in Vietnam in either of the following two cases:

- Having a registered place of permanent residence under the law on residence;

- Having a rented house for dwelling in Vietnam under the law on housing, under a rent contract with a term of 90 days or more in a tax year.

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Article 3. - Taxable incomes

Taxable incomes of individuals include the following kinds of income:

1. Incomes from production or business activities, including:

a/ Incomes from goods production or trading or service provision under law. Particularly for incomes from agricultural production, forestry, salt-making, aquaculture and fishing activities, personal income tax will only be imposed on individuals who do not fully satisfy the conditions for tax exemption specified in Clause 5, Article 4 of this Decree;

b/ Incomes from independent professional activities of individuals possessing practice licenses or certificates under law.

2. Salaries or wages receivable by employees from their employers, including:

a/ Salaries, wages and amount of similar nature receivable in monetary or non monetary forms;

b/ Allowances and subsidies, except those paid under the law on preferential treatment of persons with meritorious services; defense or security allowances; hazard or danger allowances for persons working in branches, occupations or jobs at places where exist hazardous or dangerous elements; allowances for attraction of laborers to work in certain branches or in certain regions specified by law; allowances for sudden difficulties , allowances for laborers suffering from labor accidents or occupational diseases; lump-sum maternity or child adoption allowances; allowances for working capacity loss, lump-sum retirement allowances, monthly survivorship allowances, severance and job loss allowances specified in the Labor Code, other allowances paid by Social Insurance, and allowances for combat of social evils;

Allowances and subsidies not accounted as taxable incomes specified at this Point must be prescribed by competent state agencies.

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d/ Sums of money eared from participation in business associations, boards of directors, control boards, management boards, associations, professional societies and other organizations;

e/ Other monetary or non-monetary benefits other than salaries and wages paid by employers to or on behalf of taxpayers in any form:

- House rents, charges for electricity, water and associated services (if any);

- Insurance for employees which employers are not obliged to purchase under law;

Membership fees and charges for other services such as healthcare entertainment, sports, recreation, beauty care, which are provided for individuals upon their request;

- Other benefits provided for by law.

f/ Monetary or non-monetary bonuses or rewards in any form, including also bonus securities, except for the following bonuses or rewards:

- Rewards accompanying honorary titles conferred by the State, including also those accompanying emulation titles and other commendation and reward forms under the law on emulation and commendation;

Rewards accompanying international or national prizes recognized by the Vietnamese State;

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- Rewards for detection of and reporting on illegal acts to competent state agencies.

3. Incomes from capital investment, including.

a/ Loan interests;

b/ Share dividends;

c/ Incomes from capital investment in other forms, including also capital contributions in kind, reputation, land use rights, creations or inventions; except for government bond interests.

4. Incomes from capital transfer, including:

a/ Incomes from transfer of capital holdings in economic organizations;

b/ Incomes from transfer of securities;

c/ Incomes from transfer of capital in other forms.

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a/ Incomes from transfer of rights to use land and assets attached to land;

b/ Incomes from transfer of the right to own or use residential houses;

c/ Incomes from transfer of the right to lease land or water surface;

d/ Other incomes earned from transfer of real estate.

6. Incomes from won prizes in cash or in kind, including:

a/ Lottery winnings;

b/ Sales promotion winnings in all forms;

c/ Betting or casino winnings;

d/ Winning in prized games and contests and other forms of winning.

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a/ Incomes from assignment or licensing of intellectual property objects: copyright and related rights; industrial property rights; rights to plant varieties;

b/ Incomes from technology transfer: technical know-how, technical knowledge, solutions to production rationalization and technological renewal.

8. Incomes from commercial franchising under the Commercial Law.

9. Incomes from inheritances that are securities, capital holdings in economic organizations or business establishments, real estate and other assets subject to ownership or use registration.

10. Incomes from gins that are Securities, capital holdings in economic organizations or business establishments, real estate and other assets subject to ownership or use registration.

Article 4. - Tax-exempt incomes

1. Incomes from transfer or real estate between spouses; parents and their children; adoptive parents and their adopted children; fathers-in-law or mothers-in-law and daughters-in-law or sons-in-law; grandparents and their grandchildren; or among blood siblings.

2. Incomes from transfer of residential houses, rights to use residential land and assets attached to residential land received by individuals who have only one residential house or land plot each.

3. Incomes from the value of land use rights of individuals who are allocated land by the State without having to pay land use levy or with reduced land use levy under law.

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5. Incomes of households and individuals directly engaged in agricultural or forest production, salt making, aquaculture, fishing and trading of aquatic resources not yet processed into other products or preliminarily processed aquatic products.

Households and individuals directly engaged in production activities specified in this Clause must satisfy the following conditions:

a/ Having lawful land or water surface use rights for production, and being directly engaged in agricultural or forest production, salt making or aquaculture. For fishing activities, they must have the right to own or use ships, boats and fishing gears and be directly engaged in these activities;

b/ They actually reside in localities where agricultural or forest production, salt making or aquaculture activities are conducted under the law on residence.

6. Incomes from conversion of agricultural land allocated by the State to households and individuals for production.

7. Incomes from interests on deposits at banks or credit institutions or interests from life insurance policies.

8. Incomes from foreign exchange remittances.

9. Salary or wage amounts paid for night shift or overtime work, which are higher than those paid for day shifts or prescribed working hours under law.

10. Retirement pensions paid by Social Insurance under the Law on Social Insurance. Individuals residing in Vietnam are eligible for exemption from personal income tax on pensions paid by foreign countries.

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a/ Scholarships granted from the state budget;

b/ Scholarships granted by domestic and foreign organizations under their study promotion programs.

12. Incomes from indemnities paid under life insurance policies, non-life insurance policies, compensations for labor accidents, compensations paid by the State and other compensations as provided for by law.

13. Incomes received from charity funds licensed or recognized by competent state agencies and operating for charity, humanitarian or non-profit purposes.

14. Incomes received from governmental or non-governmental foreign aid for charity or humanitarian purposes approved by competent state agencies.

The Finance Ministry shall specify procedures and dossiers for identification of tax-exempt incomes stated in this Article.

Article 5. - Tax reduction

1. Taxpayers who face difficulties caused by natural disasters, fires, accidents or severe diseases and affecting their tax payment ability may be considered for tax reduction corresponding to the extent of damage they suffer from but not exceeding payable tax amounts.

2. The Finance Ministry shall specify procedures and dossiers for and consideration of personal income tax reduction mentioned in this Article.

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TAX BASES FOR A NUMBER OF KINDS OF INCOME OF RESIDENT INDIVIDUALS

Section l. INCOMES FROM BUSINESS ACTIVITIES AND INCOMES FROM SALARIES OR WAGES

Article 6. - Taxed incomes from business activities, salaries or wages

1. Taxed incomes from business activities, salaries or wages are determined to be equal to taxable incomes from business activities, salaries or wages specified in Articles 7 and 11 of this Decree minus (-) the following amounts:

a/ Compulsory social insurance premiums under law, including: social insurance, health insurance, professional liability insurance for some professions subject to compulsory insurance;

b/ Reduction based on family circumstances specified in Article 12 of this Decree;

c/ Contributions to charity funds, humanitarian funds and study promotion funds specified in Article 13 of this Decree.

2. Taxed incomes of individuals who earn taxable incomes from both business activities and salaries or wages will be the total of their taxable incomes from business activities plus (+) their taxable incomes from salaries or wages minus (-) the amounts specified at Points a, b and c, Clause 1 of this Article.

Article 7. - Taxable incomes from business activities

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Article 8. - Turnover for calculation of taxable incomes from business activities.

1. Turnover for calculation of taxable incomes from business activities means the total of sales, processing remuneration, commissions, goods or service provision charges generated in a tax period.

The time of determination of turnover is the time of transfer of ownership of goods or completion of services or the time of making goods sale or service provision invoices, regardless of whether such turnover has been collected or not.

2. In some cases, turnover for calculation of taxable incomes is specified as follows:

a/ Turnover of goods sold by installment payment is determined according to selling prices of goods sold by lump-sum payment exclusive of deferred payment interest;

b/ Turnover of goods or services used for exchange or donation is determined according to the selling price of the same or equivalent product, goods or service at the time of exchange or donation;

c/ Turnover from goods processing means sums of money earned from processing activities, covering remuneration, costs of fuel, power and auxiliary materials and other expenses for the goods processing;

d/ Turnover from lease of assets means rents periodically paid by lessees under lease contracts. In case lessees pay rents in advance for many years, turnover for calculation of taxable incomes may be allocated to the number of years of advance rent payment or determined according to lump-sum rent payment;

e/ Turnover for calculation of taxable incomes in other cases shall be specified by the Ministry of Finance.

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1. Reasonable expenses specified in this Article must be actually paid amounts accompanied with sufficient invoices and vouchers under law.

2. Deductible reasonable expenses include:

a/ Salaries, wages, allowances, remunerations and other payments to laborers;

Salaries or wages of individuals who are heads of business households are not accounted as deductible reasonable expenses.

b/ Expenses for raw materials, materials, fuels, energy and goods actually used for the production and trading of goods or provision of services related to the generation of turnover and taxable incomes in a period, which shall be calculated according to their reasonable consumption rates and actual ex-warehousing prices determined by business households or individuals themselves that shall be held responsible before law.

c/ Expenses for depreciation, regular repair and maintenance of fixed assets used for the production and trading of goods or provision of services. The fixed asset depreciation level is determined based on the value of fixed assets and depreciation duration as specified by the Ministry of Finance;

d/ Paid interests on loans for production and business activities directly related to the generation of turnover and taxable incomes;

e/ Management expenses;

f/ Taxes, charges, fees, land rents payable under law for production, business or service activities;

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The Ministry of Finance shall specify other reasonable expenses which are deductible upon calculation of taxable incomes.

Article 10. - Taxable incomes and taxed incomes of business individuals who fail to strictly comply with regulations on accounting, invoices and documents.

1. For business individuals who fail to strictly comply with regulations on accounting, invoices and documents and cannot calculate turnover, expenses and taxable incomes, competent tax offices shall assess turnover and the ratio of taxable incomes in order to determine taxable incomes suitable to each production or business line.

2. Based on results of assessment of taxable incomes specified in Clause 1 of this Article, tax offices shall determine presumptive tax amounts according to the principles, order and procedures specified in Article 38 of the Law on Tax Administration.

Article 11. - Taxable incomes from salaries or wages

1. Taxable incomes from salaries or wages are determined according to Clause 2, Article 3 of this Law.

2. Time of determination of a taxable income from salary or wage is the time when an employer pays income to a taxpayer or when a taxpayer receives income.

Article 12. - Reduction based on family circumstances

Resident individuals who earn incomes from salaries or wages or business activities enjoy reduction based on family circumstances from their taxable incomes before tax calculation as follows:

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a/ Reduction for a taxpayer himself/herself, which is VND 48 million/year;

b/ Reduction for each dependant of a taxpayer, which is VND 1.6 million/month given from the month the taxpayer's obligation to nurture the dependant arises.

2. Each dependant may be counted only once for tax reduction for a taxpayer in a tax year. In case several tax payers share a dependant they are obliged to nurture, they shall reach agreement on registration of this dependant for family circumstance-based reduction for one among them.

3. Persons to be identified as dependants of taxpayers and bases for dependant identification are as follows:

a/ Under-18 children;

b/ Disabled children who are aged 18 years or older and incapable of working;

c/ Children who are studying at universities, colleges, professional secondary schools or job-training schools and have no income or have incomes not exceeding the level specified in Clause 4 of this Article;

d/ Persons who are beyond the working age or persons who are at the working age prescribed by law but are disabled and incapable of working or have no income or have incomes not exceeding the level specified in Clause 4 of this Article, including:

- Spouses of taxpayers;

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- Other helpless individuals whom taxpayers are obliged to directly nurture.

4. The income level serving as a basis for identification of dependants to be counted for reduction based on family circumstances is an average monthly income of VND 500,000 or less in a year from all income sources.

5. Taxpayer shall themselves declare the number of their dependants evidenced by lawful papers and be held responsible before law for the accuracy of their declaration.

6. The Ministry of Finance shall specify procedures and dossiers for declaration of dependants to be counted for reduction based on family circumstances under this Article.

Article 13. - Reduction for charity or humanitarian donations

1. Resident individuals who earn incomes from business activities, salaries or wages enjoy their charity or humanitarian donations deductible from their taxable incomes, including:

a/ Donations to organizations or establishments that care for or nurture children in special plights, disabled people and helpless elderly people;

b/ Donations to charity funds, humanitarian funds or study promotion funds.

2. Organizations, establishments and funds specified at Points a and b, Clause 1 of this Article must be those licensed or recognized by competent state agencies and operating for charity, humanitarian, study promotion or non-profit purposes.

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Article 14. - Partially progressive tariff

1. The partially progressive tariff applies to taxed incomes from business activities, salaries or wages.

2. The partially progressive tariff is specified below:

Tax grade

Taxed income per year (VND million)

Taxed income per month

(VND million)

Tax rate (%)

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Up to 60

Up to 5

5

2

Between over 60 and 120

Between over 5 and 10

10

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Between over 120 and 216

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15

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Between over 216 and 384

Between over 18 and 32

20

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Between over 384 and 624

Between over 32 and 52

25

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Between over 624 and 960

Between over 52 and 80

30

7

Over 960

Over 80

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Section 2. INCOMES FROM CAPITAL TRANSFER

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Taxed income from the transfer of a contributed capital amount is determined to be equal to the transfer price minus (-) the buying price of the contributed capital amount and reasonable expenses related to the generation of capital transfer income.

2. Transfer price means a sum of money receivable by an individual under a capital transfer contract.

3. Buying price of a contributed capital amount is determined to be the value of that capital amount calculated at the time of contribution or at the time of purchase.

4. Reasonable expenses related to the generation of capital transfer income are actually paid expenses with lawful invoices and vouchers, including.

a/ Expenses for completion of legal procedures necessary for the transfer;

b/ Charges and fees paid by the transferor into the state budget under law;

c/ Other expenses.

Article 16. - Taxed incomes from securities transfer

1. A taxed income from a transfer of securities, including also the right to purchase stocks, is determined to be equal to the selling price minus (-) the buying price of securities and expenses related to the transfer.

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a/ Selling prices of listed securities are prices of actual transfers at the Stock Exchange or the Securities Trading Center;

b/ Selling prices of securities of unlisted public companies, which have registered for trading at the Securities Trading Center, are prices of actual transfers at the Securities Trading Center;

c/ Selling prices of securities of units not falling into cases specified at Points a and b of this Clause are prices stated in transfer contracts or accounting books of units whose securities are transferred at the time of sale.

3. Buying prices of securities are determined as follows:

a/ Buying prices of listed securities are prices of actual purchases at the Stock Exchange or the Securities Trading Center;

b/ Buying prices of securities of unlisted public companies, which have registered for trading at the Securities Trading Center, are prices of actual purchases at the Securities Trading Center;

c/ Buying prices of securities of units not falling into cases specified at Points a and b of this Clause are prices stated in transfer contracts or accounting books of units whose securities are

transferred at the time of purchase.

4. Expenses related to the securities transfer are actually paid expenses with lawful invoices and vouchers, including:

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b/ Securities depository charge;

c/ Securities trust expense;

d/ Other expenses.

Article 17. - Tax rates

1. The tax rate for incomes from transfer of contributed capital is 20% of taxed income from each transfer.

2. The tax rate for incomes from securities transfer is 20% of taxed income of a whole year and applies only to taxpayers that strictly comply with legal provisions on accounting, invoices and documents, can compute their taxed incomes under Article 16 of this Decree and have made tax registration for stable payment with tax offices since December of the previous year.

For taxpayers other than those specified above, the applicable tax rate is 0.l% of the price of each securities transfer.

Section 3. INCOMES FROM REAL ESTATE TRANSFER

Article 18. - Taxed incomes from land use rights transfer

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2. Land use rights transfer prices are determined as follows:

a/ Transfer prices are actual prices stated in transfer contracts at the time of transfer;

b/ In case actual prices are unidentifiable or prices stated in transfer contracts are lower than land prices stipulated by provincial-level People's Committees at the time of transfer, transfer prices shall be determined according to land price brackets set by provincial-level People's Committees.

3. Land use rights transfer cost prices are determined in some specific cases as follows:

a/ For land areas allocated by the State with the collection of land use levy or land rent, land use rights transfer cost prices are based on receipts of land use levy or land rent amounts collected by the State;

b/ For land areas transferred from organizations and individuals, land use rights transfer cost prices are based on transfer contracts and lawful documents of monetary payment for receipt of land use rights or land lease right (if any);

c/ In case of land use rights auction land use rights transfer cost prices are winning bids.

4. Reasonable expenses related to the transfer of land use rights are actually paid expenses with lawful invoices and vouchers, including;

a/ Charges and fees prescribed by law and related to the grant of land use rights;

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c/ Other expenses directly related to the transfer of land use rights.

Article 19. - Taxed incomes from transfer of land use rights associated with construction works on land;

1. Taxed income is determined to be equal to the transfer price minus (-) the cost price and related reasonable expenses.

2. Transfer prices are specifically determined as follows:

a/ Transfer prices are actual prices stated in transfer contracts at the time of transfer;

b/ In case actual prices are unidentifiable, transfer prices are determined as follows:

- The value of transferred land is determined according to land price brackets set by provincial-level People's Committees at the time of transfer;

- The value of houses, infrastructure works and architectures attached to land is determined under the Construction Ministry's regulations on house classification; capital construction standards and norms; the actual residual value of works on land.

3. Cost prices are determined to be prices stated in transfer contracts at the time of purchase.

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a/ Charges and fees prescribed by law and related to the grant of land use rights;

b/ Expenses for land revamp and ground leveling;

c/ Expenses for repair or renovation of construction works on land;

d/ Other expenses directly related to the transfer.

Article 20. - Taxed incomes from transfer of the to own or use residential houses;

1. Taxed income is determined to be equal to the selling price minus (-) the buying price and related reasonable expenses.

2. Selling prices are actual transfer prices determined according to market prices and stated in transfer contracts.

3. Buying prices are determined to be those stated in purchase contracts.

4. Related expenses are actually paid expenses with lawful invoices and vouchers, including:

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b/ Expenses for house repair, renovation and upgrading;

c/ Other expenses directly related to the transfer of residential houses.

Article 21. - Taxed incomes from transfer of the right to lease land or water surface

1. Taxed income from transfer of the right to lease land or water surface is determined to be equal to the sublease rate minus (-) the lease rate and related reasonable expenses.

2. Sublease rates are determined according to actual rates stated in lease contracts.

In case sublease unit rates stated in contracts are lower than lease rates prescribed by provincial- level Peoples Committees by the time of sublease rates shall be determined according to lease rate brackets set by provincial-level People's Committees.

3. Lease rates are determined based on lease contracts.

4. Related expenses are actually paid expenses with lawful invoices and vouchers, including:

a/ Prescribed charges and fees related to the right to lease land or water surface;

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c/ Other expenses directly related to the sublease.

Article 22. - Tax rates

1. The tax rate applicable to incomes from real estate transfer is 25% of taxed incomes.

2. In case cost prices and related expenses, which serve as a basis for determining taxed incomes, are unidentifiable, the tax rate of 2% of transfer prices applies.

Section 4. INCOMES FROM INHERITANCES OR GIFTS

Article 23. - Taxed incomes from inheritances or gifts

Taxed incomes from inheritances or gifts

1. Taxed income from inheritance or gift is the value of an inherited asset or a gift, such as real estate, another asset subject to compulsory registration of ownership or use rights, including also securities or capital holding in an economic organization or business establishment, which exceeds VND 10 million received by a taxpayer upon each time of inheritance or gift receipt.

2. The determination of taxed incomes from various inherited assets or gifts must be based on market prices of these assets at the time of income generation, specifically as follows:

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- For listed securities: The determination of taxed incomes must be based on prices quoted at the Stock Exchange or the Securities Trading Center on the date of receipt of inheritances or gifts or the preceding date;

- For securities of unlisted public companies which have registered for trading at the securities Trading Center: The determination of taxed incomes must be based on prices quoted at the Securities Trading Center on the date of receipt of inheritances or gifts or the preceding date;

- For securities of companies other than those specified above: The determination of incomes must be based on securities value stated in accounting books of these companies on date of receipt of inheritances or gifts or the preceding date.

b/ For capital holdings in economic organizations or business establishments: The determination of taxed incomes must be based on the capital holding value stated in accounting books of these economic organizations or business establishments at the time of receipt of inheritances or gifts or the preceding date.

c/ For real estate:

- The value of land is determined according to land price brackets set by provincial-level Peoples Committees by the time of receipt of inheritances or gifts;

-The value of houses, infrastructure works and architectures attached to land is determined under the Construction Ministrys regulations on house classification; capital construction standards and norms; the actual residual value of works on land.

d/ For other assets: The determination of taxed incomes must be based on prices of these assets or assets of the same kind (if any) which are used for registration fee calculation.

Article 24. - Time of determination of taxed incomes

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2. Time of determination of taxed incomes from gifts is the time when organizations or individuals present these gifts to taxpayers or when taxpayers receive these gifts.

Article 25. - Tax rate

The tax rate applicable to incomes from inheritances or gifts is 10% of taxed incomes.

Chapter III

PROVISIONS ON ADMINISTRATION OF PERSONAL INCOME TAX

Article 26. - Tax registration and grant of tax identification numbers

1. Individuals having taxable incomes shall make tax registration with tax offices in order to be granted tax identification numbers.

2. Organizations and individuals paying taxable incomes shall make tax registration with tax offices in order to be granted tax identification numbers. In case income-paying organizations and individuals that are granted tax identification number before the effective date of this Decree may continue using these tax identification numbers.

Article 27.

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1. Tax withholding means that income-paying organizations and individuals deduct payable tax amounts from incomes of taxpayers before paying incomes.

2. Kinds of income subject to tax withholding:

a/ Incomes of non-resident individuals, including also those who are not present in Vietnam;

b/ Incomes from salaries or wages;

c/ Incomes from capital investment;

d/ Incomes from capital transfer or securities transfer.

e/ incomes from won prizes;

f/ Incomes from copyright;

g/ Incomes from commercial franchising.

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Article 28. - Cases not subject to tax withholding.

1. Tax withholding does not apply to:

a/ Incomes from business activities of resident individuals;

b/ Incomes from real estate transfer;

c/ Incomes from capital contributions of individuals;

d/ Incomes from inheritances or gifts of individuals.

2. In the cases specified in Clause 1 of this Article, taxpayers shall declare and pay tax directly to tax offices.

Article 29. - Declaration of personal income tax

1. Tax shall be declared by income-paying organizations and individuals that withhold tax under Article 27 of this Decree as follows:

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b/ Annual declaration:

Income-paying organizations and individuals shall make tax declarations for annual finalization of taxable incomes, withheld tax amounts and other reductions (if any).

2. Tax declaration by taxpayers:

a/ Business individuals or independent professional practitioners shall make quarterly tax declarations;

b/ Individuals shall make tax declaration upon each time of income generation for incomes from capital transfer (except for securities transfer); incomes from real estate transfer, inheritances or gifts;

c/ Individuals may make tax declaration for annual finalization of incomes from salaries, wages or business activities in case they strictly comply with legal provisions on accounting, invoices and documents, and pay tax according to their declarations, and incomes from securities transfer registered for tax payment at the tax rate of 20%.

3. The Ministry of Finance shall guide specifically the tax declaration and tax finalization mentioned in this Article.

Article 30. - Responsibilities of employers to withhold tax and make tax declaration when paying incomes being salaries or wages to individuals.

Employers shall withhold payable tax amounts from salaries or wages to be paid to their employees, make tax declaration and pay withheld tax amounts into the state budget, specifically as follows:

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Every month, employers shall temporarily calculate reduction based on family circumstances according to written declarations made at the beginning of the year by taxpayers in order to calculate payable tax amounts in the month, withhold and remit tax into the state budget, and will not be held responsible before law for the declaration for temporary calculation of reduction based on family circumstances.

2. For other wages and payments for individuals who do not enter into labor contracts, income-paying organizations and individuals shall temporarily withhold tax at the rate of 10% of paid incomes for individuals having tax identification numbers. For individual having no tax identification numbers, tax shall be withheld at the rate of 20%. Individuals whose incomes are subject to temporary tax withholding under this Clause are not required to make monthly tax declarations.

The Ministry of Finance shall specify the minimum income level subject to temporary tax withholding at the rates under this Clause.

Article 31. - Tax declaration by individuals earning incomes from business activities

1. Business individuals shall strictly comply with legal provisions on accounting, invoices and vouchers:

a/ For every quarter they shall make tax declarations and temporarily pay personal income tax according to temporarily accounted business results of that quarter. Temporarily paid tax amounts for each quarter shall be determined on the basis of taxable incomes minus reductions based on family circumstances for taxpayers themselves and their dependants and the partially progressive tariff,

b/ They shall make declarations for annual tax finalization and be held responsible before law for the truthfulness and accuracy of declared figures.

2. The identification of taxpayers being business individuals in some cases is specified as follows:

a/ In case there is only one person whose name is stated in a business registration, the taxpayer is identified to be the person named in that business registration;

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c/ In case many members of a household are engaged in the registered business, the taxpayer is identified to be the person named in the business registration. Other household members are identified as employees if they are aged full 15 year or more, or as dependants if they are aged less than 15 years.

3. The Ministry of Finance shall specify the tax declaration under this Article.

Article 32. - Tax refund

1. Individuals are entitled to tax refund in the following cases:

a/ Paid tax amounts are larger than payable tax amounts;

b/ Actual amounts of reduction based on family circumstances provided for in Article 12 of this Decree are larger than temporarily calculated ones;

c/ Charity and humanitarian contributions specified in Article 13 of this Decree, which are not yet subtracted upon tax calculation.

2. The Ministry of Finance shall specify procedures and dossiers for tax refund under this Article.

Chapter IV

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Article 33. - Effect

1. This Decree takes effect on January 1, 2009.

2. Provisions on administration of personal income tax of Chapter III of this Decree supersede the provisions on administration of income tax on high-income earners of the Government's Decree No. 85/2007/ND-CP dated May 25, 2007, detailing the implementation of a number of articles of the Law on Tax Administration.

Article 34. - Organization of implementation

1. The Ministry of Finance shall guide the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of provincial/municipal People's Committees shall implement this Decree.

ON BEHALF OF THE GOVERNMENT

PRIME MINISTER

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Nguyen Tan Dung