GUIDANCE ON PERSONAL INCOME TAX (PIT) FOR GIFTS TO EMPLOYEES & COLLABORATORS

(Based on the guidance issued by the Hung Yen Provincial Tax Department)

During the process of recognizing, rewarding, or caring for employees, many enterprises provide gifts in cash or in kind. However, the Personal Income Tax (PIT) obligation for these gifts depends on their nature and method of payment.

This article summarizes the key content based on Official Dispatch No. 5070/HYE-QLDN1 dated December 3, 2025, issued by the Hung Yen Provincial Tax Department, along with related regulations.

🔍 1. Gifts in Kind – When PIT is Applicable ?

▶ Circumstances REQUIRING PIT Calculation

Determined as Taxable Gift if:

• Gifts requiring registration of ownership or usage rights, such as: Car, motorbike, ship, airplane, sport gun, etc.
• Gift value exceeding 10 million per receipt/occasion.

Applied Tax Rate: 10%

Calculation Method: Personal Income Tax Due = Taxable Value × 10%

▶ Circumstances NOT REQUIRING PIT Calculation

• List of gifts not subject to ownership registration.
• General benefits gifts, spending for the employees’ collective, no individual recipient’s name required.

➡ No Personal Income Tax (PIT) taxable income arising.

💰 2. Gifts in the nature of Salary or Wages

Determined as Taxable Gift if:

• In the nature of Salary and Wages.
• Payment to employees under Labor Contracts.
• Or payment to individuals without Labor Contracts or those with Labor Contracts of less than 3 months.

➡ Gift value included in PIT taxable income.

🔸 Personal Income Tax Deduction:

• Employees under Labor Contracts ≥ 3 months:
  → Deduction under the partially progressive tax rate.
• Collaborator / Labor Contracts < 3 months:
  → A 10% withholding applies if the total payment is ≥ 2,000,000 dong per payment.

🧾 3. Invoice obligation when giving gifts

An enterprise provides gifts in the form of goods or services to its employees or collaborators:

➡ Electronic invoicing required according to invoice regulation
(Pursuant to the Decree 70/2025/NĐ-CP, amendment of the Decree 123/2020/NĐ-CP).

📌 4. Recommendations for Enterprises

Enterprises need:

Cross-reference the recipient, method of payment, and gift value.
• Correctly classify the nature of the gift.
• Tax deductions and Invoice Issuance in Compliance with Regulations.

➡ Help avoid the risk of additional tax collection and penalties during tax inspection or settlement.

If you need a notification form, an internal form, or detailed instructions for enterprises, let me know.