Article 1.- Vietnamese citizens living in the country or working, laboring in foreign countries and other individuals residing in Vietnam and having incomes; foreigners working in Vietnam and having incomes shall all have to pay income tax according to the provisions of this Ordinance.

Article 2.- Incomes subject to income tax include:

1. Regular incomes in the forms of salaries, wages, allowances, bonuses; incomes outside salaries and wages, which are paid for engagement in production, business and services activities not subject to enterprise income tax, except for those incomes specified in Article 3 of this Ordinance.

2. Irregular incomes in the following forms:

a/ Gifts, presents in kind sent from abroad;

b/ Technology transfer, copyright over inventions, marks, technical know-hows, construction technical designs, industrial designs and other services, except cases of donation thereof;

c/ Lottery prizes.

1. To temporarily not collect tax on incomes which are interests on bank deposits, interests on savings, interests on treasury bonds, government bonds, bills and shares.

2. Incomes not subject to income tax include:

a/ Night-shift allowances; allowances for hazardous and dangerous occupations; region allowances; seniority allowances for armed force personnel; special allowances for those working in a number of offshore islands and border areas with exceptionally difficult living conditions; job attraction allowances; working trip allowances; food ration expenses and special allowances for a number of branches and occupations according to the State-prescribed regime; various allowances for State officials and employees, and other allowances from the State budget;

b/ Monetary rewards for technical modifications, inventions and innovations, national and international prizes, monetary rewards accompanying the State-conferred titles, monetary rewards or other preferential treatments from the State budget;

c/ Social allowances, insurance indemnities, severance allowances, and allowances for transfer to work at production units as provided for by law;

d/ Incomes of individual business household owners, which are subject to enterprise income tax;

e/ Incomes earned in Vietnam by foreigners who are considered not residing in Vietnam for less than 30 days;

f/ Social insurance and medical insurance premiums paid from salaries and wages according to law provisions.

Article 4.- In cases where international treaties which Vietnam has signed or acceded to contain provisions different from those of this Ordinance regarding the income tax payment, the provisions of such international treaties shall apply.

Article 5.- Individuals liable to income tax shall be obliged to pay fully their income taxes in accordance with the provisions of this Ordinance.

Article 6.- All acts of tax evasion, tax delay and other acts of violating this Ordinance are strictly forbidden.

Article 7.- All State agencies, social organizations, people�s armed force units and citizens shall have to supervise and assist tax offices and tax officials in their task of collecting income tax.

Chapter II

BASES FOR TAX CALCULATION
AND TAX RATES

Article 8.- Bases for tax calculation are the taxable incomes and the tax rates.

Article 9.- The taxable regular income specified in Clause 1, Article 2 of this Ordinance is the total amount of money an individual earns on a monthly average a year, which is over VND 3,000,000 for Vietnamese citizens and other individuals residing in Vietnam and over VND 8,000,000 for foreigners residing in Vietnam and Vietnamese citizens laboring or working abroad. Particularly for foreigners who are considered not residing in Vietnam, their taxable regular income is the total income generated from their work in Vietnam.

Foreigners shall be considered as residing in Vietnam if they stay in Vietnam for 183 days or more in the period of 12 months from the date they arrive in Vietnam; and shall be considered as not residing in Vietnam if they stay in Vietnam less than 183 days in the same period.

Article 10.- The partially progressive tax rates applicable to regular incomes are prescribed below:

1. For Vietnamese citizens and other individuals residing in Vietnam:

Calculation unit: VND 1,000

For individuals who, after paying income taxes at the rates prescribed in this table, still have a remaining average income of over VND 15,000,000/month, they shall have to pay a surtax of 30% of the amount exceeding VND 15,000,000.

2. For foreigners residing in Vietnam and Vietnamese citizens laboring or working abroad:

Calculation unit: VND 1,000

3. For foreigners who are considered not residing in Vietnam, the tax rate of 25% shall apply to the total income amount.

Article 11.- The taxable irregular income is the income an individual earns each time, which is over VND 2,000,000 as prescribed in Clause 2, Article 2 of this Ordinance.

1. The partially progressive tax rates applicable to irregular incomes, except for the cases specified in Clauses 2, 3 and 4 of this Article, are prescribed below:

Calculation unit: VND 1,000

2. Income from technology transfer, which is over VND 2,000,000 for each transfer, shall be taxed at the rate of 5% of the total income.

3. Income from lottery prizes, which is over VND 12,500,000 for each winning, shall be taxed at the rate of 10% of the total income.

4. Income in the forms of gifts and presents in kind sent from abroad, which is over VND 2,000,000 per sending, shall be taxed at the rate of 5% of the total income.

Article 13.- Incomes in kind or in foreign currencies must be converted into Vietnam dong for use as basis for tax calculation.

The incomes in kind shall be calculated at the market prices at the time of their generation.

The incomes in foreign currencies shall be calculated at the average exchange rate on the inter-bank foreign currency market announced by the State Bank of Vietnam at the time of their generation.

Chapter III

TAX DECLARATION AND PAYMENT

Article 14.- Income tax on regular incomes shall be calculated on the average monthly basis for the year. Temporary tax declaration and payment shall be made every month. At the year�s end or upon the expiry of the contractual term, all taxable incomes must be summed up and the final settlement thereof must be carried out with the tax offices not later than February 28 of the subsequent year or 30 days as from the expiry of the contractual term.

Foreigners liable to income tax shall have to produce receipts for payment of income taxes before leaving Vietnam.

Article 15.- Income tax on irregular incomes shall be paid for each time of income generation.

Article 16.- Income tax payers shall have to declare and pay taxes in full and on time according to the regulations of the Ministry of Finance.

Article 17.- The Ministry of Finance shall organize the collection of income tax. Organizations and individuals that pay incomes shall have to withhold payable income tax before paying the incomes

Organizations and individuals that pay incomes and withhold income tax therefrom shall enjoy from 0.5% to 1% of the tax amount already paid into the State budget according to the regulations of the Ministry of Finance.

Article 18.- Organizations and individuals that pay incomes shall have to:

1. Fully declare to the tax offices the number of tax payers in their units, and their taxable regular and irregular incomes;

2. Keep accounting books and records related to the taxable incomes of those to whom the units pay incomes, and produce them at the request of the tax offices;

3. Receive the tax payers� declarations and submit them to the tax offices;

4. Withhold the payable income taxes, inform each tax payer thereof, and pay them into the State budget according to regulations.

Article 19.- The tax offices shall have the following tasks and powers:

1. Guiding, inspecting and urging the income tax declaration, calculation and payment.

2. Opening tax books, collecting income tax and issuing receipts for the payment thereof.

3. Making written records of, administratively sanctioning according to competence or proposing the penal liability examination of, violations of the Ordinance on Income Tax on High-Income Earners.

4. Considering and settling complaints and denunciations about income tax.

Chapter IV

TAX REDUCTION AND EXEMPTION

1. In cases where their lives are affected by natural calamities, enemy sabotage or accidents, the tax payers shall be considered for income tax reduction or exemption.

2. Tax payers shall be considered for income tax reduction or exemption in a number of special cases prescribed by the Government.

The Government shall specify the income tax reduction and exemption.

Chapter V

HANDLING OF VIOLATIONS AND COMMENDATION

Article 21.- The handling of violations of the Ordinance on Income Tax on High-Income Earners is prescribed as follows:

1. Individuals and organizations that fail to observe the regulations on the income tax declaration procedures and on the opening of accounting books as well as making records on income tax, and fail to withhold income tax amounts as prescribed, shall be sanctioned for tax-related administrative violations;

2. Individuals and organizations that commit acts of false declaration for tax evasion shall, apart from having to pay the full income tax amounts according to the provisions of this Ordinance, be fined one to three times the evaded tax amount; those evade tax in large amount or have been sanctioned for tax-related administrative violations but repeat them or commit other serious violations, shall be examined for penal liability according to law provisions;

3. Individuals and organizations that pay tax or fines later than the prescribed payment date or the date determined in the tax-related handling decisions shall, apart from having to pay the full tax or fine amounts, have to pay a fine of 0.1% of the delayed amount for each day of delayed payment;

4. Individuals and organizations that fail to pay tax or fines according to tax notices or tax-related handling decisions shall be dealt with as follows:

a/ Deductions shall be made from their money deposited at the treasuries or credit institutions for payment of the tax or fines. The treasuries or credit institutions shall have to make such deductions from the deposit accounts of the concerned organizations or individuals for payment of tax or fines into the State budget before recovering debts;

b/ Inventory of their assets according to law provisions to ensure the payment of outstanding tax and/or fine amounts.

Article 22.- Competence to handle violations specified in Article 21 of this Ordinance is prescribed as follows:

1. The heads of the tax offices that directly manage the tax collection shall have the right to handle the tax payers� violations specified in Clauses 1, 2 and 3, Article 21 of this Ordinance.

2. The directors of the provincial/municipal Tax Departments and district Tax Sub-Departments that directly manage the tax collection may apply the handling measures specified in Clause 4, Article 21 of this Ordinance and, for cases of violation specified in Clause 2, Article 21 of this Ordinance, transfer the dossiers to competent bodies for handling according to law provisions.

Article 23.- Individuals that obstruct or instigate other persons to obstruct the enforcement of this Ordinance, or obstruct the investigation and handling of violations of this Ordinance shall, depending on the nature and seriousness of their violations, be administratively sanctioned or examined for penal liability according to law provisions.

1. Tax officials or other individuals who abuse their positions and powers to appropriate or embezzle income tax amounts shall have to compensate to the State the whole appropriated or embezzled tax amounts and shall, depending on the nature and seriousness of their violations, be disciplined, administratively sanctioned or examined for penal liability according to law provisions.

2. Tax officials or other individuals who abuse their positions and powers to cover up violators, deliberately act contrarily or lack responsibility in the implementation of this Ordinance shall, depending on the nature and seriousness of their violations, be disciplined, administratively sanctioned or examined for penal liability according to law provisions.

3. Tax officials who, due to their lack of responsibility or deliberate wrong handling acts, cause losses to tax payers or handled persons, shall have to pay compensation to the loss sufferers.

Article 25.- The Government shall prescribe the commendation and reward regime for:

1. Tax offices and tax officials that have well fulfilled their assigned tasks.

2. Those who make merits in discovering cases of violation of the Ordinance on Income Tax on High-Income Earners.

Chapter VI

COMPLAINTS, STATUTE OF LIMITATIONS

Article 26.- Organizations and individuals may lodge complaints about the improper applications of the Ordinance on Income Tax on High-Income Earners to them.

Written complaints must be sent to the tax offices that directly manage the complainants or have decided on the handling measures within 30 days after the date of receipt of the deduction notices, tax notices, collection orders or handling decisions.

Pending the settlement of their complaints, the complainants shall still have to pay in full and on time the tax and/or fine amounts as notified.

The agencies that receive the written complaints shall have to consider and settle them within 15 days after the date of receipt of the complaints; for complicated cases, such time limit may be prolonged but must not exceed 30 days as from the date of receipt of the complaints; if the cases do not fall under their handling competence, they shall have to transfer the dossiers thereof or report them to the competent bodies for settlement and inform the complainants thereof within 10 days as from the date of receipt of the complaints.

Article 27.- In cases where the complainants disagree with the decisions of the complaint-receiving agencies or where the complaint-receiving agencies fail to settle their complaints within the time limit specified in Article 26 of this Ordinance, they may lodge complaints to the immediate superior agencies of the complaint-receiving agencies.

Article 28.- The tax offices shall have to return tax amounts or fines that have been improperly collected and pay compensation, if any, within 15 days as from the date of receipt of the handling decisions from their superiors or the competent agencies according to law provisions.

Article 29.- Where it is discovered and concluded that there has been false declaration for tax evasion or a mistake in tax calculation, the tax offices shall have to retrospectively collect the tax, fines or return the paid tax amounts within 5 years from the date the false declaration for tax evasion or the mistake in tax calculation is examined and discovered. Where individuals fail to register, declare and pay tax, the time limit for the retrospective collection of tax and fines shall start from the time the taxable income is generated.

Chapter VII

ORGANIZATION OF IMPLEMENTATION

Article 30.- The Government shall direct the organization of the income tax-related work throughout the country.

In case of a market price fluctuation of 20% or more, the Government shall propose the Standing Committee of the National Assembly to adjust the monetary levels in the income tax rate table to appropriate levels.

Article 31.- The Minister of Finance shall have to organize and supervise the income tax-related work throughout the country; settle income tax-related complaints and proposals falling under his/her competence.

Article 32.- The presidents of the People�s Committees at different levels shall direct and supervise the implementation of the Ordinance on Income Tax on High-Income Earners in their respective localities.

Chapter VIII

IMPLEMENTATION PROVISIONS

Article 33.- This Ordinance takes effect as from July 1, 2001.

This Ordinance replaces the May 19, 1994 Ordinance on Income Tax on High-Income Earners, which was amended by the February 6, 1997 Ordinance Amending a Number of Articles of the Ordinance on Income Tax on High-Income Earners and the June 30, 1999 Ordinance Amending a Number of Articles of the Ordinance on Income Tax on High-Income Earners.

All the previous provisions contrary to this Ordinance are hereby annulled.

Article 34.- The Government shall detail and guide the implementation of this Ordinance.

On behalf of the Standing Committee of the National Assembly
Chairman
NONG DUC MANH