The year-end period is always a time when employees pay close attention to welfare benefits such as the 13th-month salary, attendance bonuses, or prizes from year-end parties. However, not everyone clearly understands which income items are taxable and which are exempt. In this article, Vo & Associates will clarify these regulations based on the latest Law on Personal Income Tax.

1. 13th-Month Salary and Attendance Bonuses

First and foremost, it should be understood that the majority of monetary amounts received by employees from enterprises during the year-end are identified as income from wages and remunerations. Pursuant to Clause 2, Article 3 of the Law on Personal Income Tax 2025, taxable income from wages and remunerations includes:

• Wages, remunerations, and items of the nature of wages or remunerations;
• Remuneration, benefits in cash or non-cash forms;
• Allowances and subsidies, except for: those prescribed by law on incentives for people with meritorious services; defense and security allowances; allowances for toxic or dangerous sectors, occupations, or workplaces with toxic factors, etc.

It is evident that the 13th-month salary constitutes wages, remunerations, and items of the nature of wages or remunerations. Meanwhile, an attendance bonus is understood as an allowance paid by the employer to the employee for full attendance, compliance with the law, and completion of the required working days in a month, calculated based on the ratio of actual working days.

The Hanoi Tax Department issued Official Letter No. 73512/CT-TTHT (2018), which records: “The 13th-month salary of an employee is part of the taxable income from wages and remunerations of an individual.” Furthermore, Official Letter No. 79557/CT-TTHT (2018) stipulates: “Allowances for housing, gasoline, and attendance are included in the taxable income of the employee.”

In conclusion, 13th-month salaries and attendance bonuses are subject to personal income tax, and employees must fulfill their tax obligations in accordance with the law.

Note: Although the Law on Personal Income Tax 2025 takes effect on July 1, 2026, the provisions relating to income from business and income from wages and remunerations of resident individuals shall apply from the 2026 tax period.

2. Prizes (Year-end Parties, Performances)

In addition to cash, many enterprises organize lucky draws during year-end parties. Unlike wages, these items are classified as income from winnings. According to Clause 6, Article 3 of the Law on Personal Income Tax 2007, taxable income from winnings includes:

• Lottery winnings;
• Winnings from promotional activities;
• Winnings from betting, or casinos;
• Winnings from games and competitions with prizes, and other forms of winning.

Articles 15 and 23 of this Law further provide:

• The taxable income from winnings is the prize value in excess of 10 million VND received by the taxpayer upon each instance of winning.
• The time of determination of taxable income is when the organization or individual pays the income to the taxpayer.
• The tax rate for income from winnings is 10%.

=> Therefore, for winnings from year-end parties or performances, if the value exceeds 10 million VND, personal income tax must be paid.

3. Bonuses in Kind (e.g., Gold, Machinery)

Regarding bonuses in kind (such as gold, machinery, or household appliances), many employees mistakenly believe that only cash is taxable. However, under current regulations, non-monetary bonuses remain subject to personal income tax.

Pursuant to Article 104 of the Labor Code 2019, a “bonus” is an amount of money, property, or other forms that the employer rewards the employee based on business performance and the employee’s level of task completion. Additionally, under Clause 2, Article 3 of the Law on Personal Income Tax 2025, taxable income includes benefits in cash or non-cash forms, and bonuses in kind are not listed as tax-exempt items under Articles 4 and 5 of this Law.

In brief, when an employee receives a bonus in kind (e.g., Gold, Machinery), they must pay personal income tax. To ensure the employee receives the full value of the item, the enterprise may opt to pay the personal income tax on their behalf. Note that this tax-paid amount is still considered part of the individual’s taxable income and must be fully finalized and declared according to the law.

4. In which cases are employees entitled to a Personal Income Tax (PIT) refund for the aforementioned paid amounts?

Many individuals are concerned when tax is withheld immediately upon receiving a bonus; however, this amount is merely a provisional tax payment. Pursuant to Article 6 of the Law on Personal Income Tax 2025, which stipulates: “annual tax periods for income from business and income from wages and remunerations of resident individuals; tax periods upon each instance of income generation for other types of income of resident and non-resident individuals; the time for determining taxable income; tax finalization; and tax refunds in cases where the amount of tax paid by an individual is greater than the amount of tax payable or where the income has not reached the taxable threshold.”

As such, personal income tax amount paid monthly (or upon receipt of a bonus) is only a provisional payment. At the end of the year, taxpayers shall perform tax finalization. At this stage, the Tax Authority will accurately determine the total tax liability. If the provisionally paid amount exceeds the actual tax payable, or if the individual’s income does not reach the taxable threshold, the employee will be entitled to a tax refund.

5. Which bonuses and winnings are exempt from tax obligations?

Employees are exempt from tax on bonuses (income from wages and remunerations) for certain specific groups, including:

• Income from the performance of scientific, technological tasks, and innovation.
• Vietnamese crew members working for foreign shipping lines or Vietnamese shipping lines engaged in international transportation.
• Foreign experts working for programs or projects funded by non-refundable ODA, or foreign non-governmental organization programs/projects in Vietnam; Vietnamese individuals working for representative offices of international organizations within the United Nations System in Vietnam; and individuals participating in United Nations peacekeeping forces.
• Personal income tax exemption for a period of 05 years for income from wages and remunerations of individuals who are high-quality digital technology industrial human resources in the following cases: a) Income from digital technology industrial projects in concentrated digital technology zones; b) Income from R&D projects, production of key digital technology products, semiconductor chips, or artificial intelligence (AI) systems; c) Income from digital technology industrial human resource training activities.
• Personal income tax exemption for a period of 05 years for income from wages and remunerations of high-tech human resources performing R&D activities in high technology or strategic technology belonging to the List of high technologies prioritized for development investment or the List of strategic technologies and strategic technology products as prescribed by the law on high technology.

In summary, bonuses specified under Articles 4 and 5 of the Law on Personal Income Tax are exempt from tax obligations. Regarding income from winnings, any portion of the winning value that is 10 million VND or less shall not be subject to personal income tax.

For each specific case, please contact Vo & Associates for detailed advice.

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