Personal Income Tax (PIT)

Tax on maternity pay from Social Insurance funds

On 17 July 2008, the GDT issued Official Letter No. 2741/TCT-TNCN providing guidance on taxation applicable to maternity pay that is paid out of the Social Insurance fund.

The OL clarifies the tax treatment on two distinct types of maternity pay as follows:

• Wages and salaries paid to female employees by the Social Insurance fund during their maternity period as prescribed under the law on Social Insurance, shall be subject to PIT as a normal salary item.

• The lump sum one-off payment which equals to two months minimum monthly wages (currently at VND540,000) per birth, is not subject to PIT.

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