Are savings deposits subject to tax?

When individuals or organizations deposit money into a bank for a specific period of time to earn a profit corresponding to the interest rate offered by that bank, this interest rate is called bank savings interest.

Saving money in a bank to earn interest is a popular way for many people to keep their idle funds. (Illustrative image)

This is a safe investment channel not only for individuals but also for many businesses. According to regulations, whether or not savings deposits are subject to tax depends on whether the account holder is an individual or a business. Specifically, as follows:

For individuals

Currently, individuals who deposit savings into banks are not subject to personal income tax. This is stipulated in Article 2 of Circular 111/2013/TT-BTC guiding the Law on Personal Income Tax and Decree 65/2013/ND-CP issued by the Minister of Finance .

The reason is that the government wants to encourage the circulation of currency in the market. In addition, it is also an important channel for mobilizing capital for the economy .

For businesses

According to Article 7 of Circular 78/2014/TT-BTC, as amended and supplemented by Article 5 of Circular 96/2015/TT-BTC, interest earned on bank deposits is considered other income subject to Corporate Income Tax. Specifically:

Other income refers to taxable income during the tax period that does not fall under the business lines or sectors listed in the business registration of the enterprise. Other income includes income from interest on deposits, interest on loans (including late payment interest, installment interest), credit guarantee fees, and other fees in loan agreements.

In cases where interest income from deposits and loans exceeds interest payments on borrowed funds as stipulated, after offsetting, the remaining difference is included in other income when determining taxable income.

In cases where interest income from deposits and loans is lower than interest payments on borrowed funds as stipulated, after offsetting, the remaining difference is deducted from the main business income when determining taxable income.

Therefore, if a business generates any income from interest earned on bank deposits, it will have to pay corporate income tax. This is because it is also considered a source of income for the business.

Duc Thien (compiled)

Source: https://vtc.vn/gui-tiet-kiem-co-phai-dong-thue-ar813446.html