{"id":4302,"date":"2026-01-19T15:24:31","date_gmt":"2026-01-19T08:24:31","guid":{"rendered":"https:\/\/thue.man.net.vn\/?p=4302"},"modified":"2026-01-20T11:37:13","modified_gmt":"2026-01-20T04:37:13","slug":"thu-nhap-chiu-thue-va-thu-nhap-tinh-thue-tncn","status":"publish","type":"post","link":"https:\/\/thue.man.net.vn\/en\/thu-nhap-chiu-thue-va-thu-nhap-tinh-thue-tncn\/","title":{"rendered":"Taxable income and income subject to personal income tax: Detailed guidance from experts."},"content":{"rendered":"

Taxable income and income subject to personal income tax are two fundamental concepts, yet they often cause confusion during tax declaration and settlement for both individuals and businesses. According to statistics from the General Department of Taxation, thousands of errors in tax settlements occur annually due to incorrect determination of deductible items, leading to unnecessary late payments or tax arrears. Understanding these regulations is crucial. <\/span>Personal Income Tax Law No. 04\/2007\/QH12<\/span><\/a> And consolidated accounting documents are a mandatory requirement for accountants.<\/span><\/p>\n

The importance of clearly distinguishing between taxable income and income subject to personal income tax (PIT) is not only about complying with the law but also about helping individuals optimize their legitimate tax benefits. This is especially relevant in the context of adjusted regulations regarding personal allowances. <\/span>Resolution 954\/2020\/UBTVQH14<\/span><\/a>, Understanding the true nature of different types of income will help businesses minimize legal risks. This article from MAN experts will provide a detailed analysis of all the in-depth aspects of this issue.<\/span><\/p>\n

The legal nature of taxable income and income subject to personal income tax.<\/b><\/h2>\n

To fully understand the tax calculation process, we first need to place these concepts within the context of the current legal framework.<\/span><\/p>\n

\"B\u1ea3n
The legal nature of taxable income and income subject to personal income tax.<\/figcaption><\/figure>\n

Definition of Taxable Income as stipulated by regulations<\/b><\/h3>\n

Taxable income is the total amount of income an individual receives from various sources during the tax period, after deducting tax-exempt income. According to Article 2 of Circular 111\/2013\/TT-BTC, taxable income from salaries and wages includes salaries, fees, allowances, and subsidies (excluding deductions as prescribed).<\/span><\/p>\n

The determination <\/span>taxable income<\/span><\/a> Taxable income requires a clear distinction between what is "received" and what is "taxable." Taxable income is the "input" of the tax calculation, including monetary and non-monetary benefits that employers pay to employees.<\/span><\/p>\n

Definition of Taxable Income<\/b><\/h3>\n

Taxable income is the remaining income after deducting allowances such as personal allowances, mandatory insurance contributions, charitable and humanitarian contributions, and educational contributions from taxable income. This is the final figure which is then multiplied by the progressive tax rate.<\/span><\/p>\n

In our auditing practice, we have found that many accountants often overlook voluntary contributions or incorrectly determine dependent deductions, leading to discrepancies in taxable income and net income. <\/span>personal income tax<\/span><\/a>.<\/span><\/p>\n

The formula for calculating and the relationship between taxable income and income subject to personal income tax.<\/b><\/h2>\n

Applying standardized formulas is key to ensuring accuracy in financial reporting and tax settlement documents.<\/span><\/p>\n

\"C\u00f4ng
The formula for calculating and the relationship between taxable income and income subject to personal income tax.<\/figcaption><\/figure>\n

General formula<\/b><\/h3>\n

The relationship between these two indicators is expressed by the following formula:<\/span><\/p>\n\n\n\n
\n

Taxable income = Taxable revenue \u2013 Deductions<\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

In this case, taxable income is calculated as follows:<\/span><\/p>\n\n\n\n
\n

Taxable income = Total income \u2013 Tax-exempt amounts<\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Detailed comparison table of taxable income and income subject to personal income tax.<\/b><\/h3>\n

Below is a summary table to help you quickly distinguish between these two concepts in tax accounting:<\/span><\/p>\n\n\n\n\n\n\n\n\n
Detailed comparison table of taxable income and income subject to personal income tax.<\/b><\/caption>\n
Criteria<\/b><\/td>\nTaxable income<\/b><\/td>\nTaxable income<\/b><\/td>\n<\/tr>\n
Legal basis<\/span><\/td>\nArticle 2 of Circular 111\/2013\/TT-BTC<\/span><\/td>\nArticle 7 of Circular 111\/2013\/TT-BTC<\/span><\/td>\n<\/tr>\n
Scope<\/span><\/td>\nBroad (covers most income)<\/span><\/td>\nNarrow (referring to the remaining income subject to tax)<\/span><\/td>\n<\/tr>\n
Exclusions<\/span><\/td>\nTax-exempt income (holiday pay, hazardous work allowance, etc.)<\/span><\/td>\nDeductions (family allowance, insurance, charity)<\/span><\/td>\n<\/tr>\n
Purpose<\/span><\/td>\nDetermine the total income level that must be included in the management scheme.<\/span><\/td>\nDetermine the exact amount of tax payable to the government.<\/span><\/td>\n<\/tr>\n
Order of determination<\/span><\/td>\nPredetermined<\/span><\/td>\nDetermine later<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Tax-exempt income \u2013 A prerequisite for determining taxable income.<\/b><\/h2>\n

Before calculating taxable income and income subject to personal income tax, accountants need to filter out items that are not subject to tax (tax-exempt income).<\/span><\/p>\n

Income from compensation and insurance<\/b><\/h3>\n

According to regulations, compensation from life insurance, non-life insurance, and work-related accident compensation are not included in taxable income. This is to protect the social security rights of workers in risky situations.<\/span><\/p>\n

Special allowances and subsidies<\/b><\/h3>\n

Not all income is included in taxable income and personal income tax. Allowances stipulated by the State for hazardous and dangerous work, regional allowances, severance pay, and unemployment benefits under the Labor Code are all excluded when calculating taxable income.<\/span><\/p>\n

Deductions from taxable income for personal income tax purposes.<\/b><\/h2>\n

This is the most important part of converting taxable income to income subject to tax.<\/span><\/p>\n

Personal deductions according to Resolution 954\/2020\/UBTVQH14<\/b><\/h3>\n

Currently, <\/span>personal allowance<\/span><\/a> It is currently being applied as follows:<\/span><\/p>\n