ACCA - TAXATION

Part B – PERSONAL INCOME TAX

MULTIPLE CHOICE QUESTIONS

Each question is worth 3 marks.

1. Which TWO statements below are correct?

(1) In cases where there are disparities between the provisions of Double Tax
Avoidance (DTA) Agreements and those of domestic laws, the provisions of the
domestic laws shall apply.
(2) In case where there are disparities between the provisions of the DTA Agreements
and those of domestic laws, the provisions of the Agreements shall apply.
(3) The DTA Agreements normally creates new tax obligations or tax obligations that
are different from or heavier than those prescribed by the domestic tax laws
(4) The DTA Agreements shall not create new tax obligations or tax obligations that
are different from or heavier than those prescribed by the domestic tax laws

A. (1) & (2)

B. (1) & (3)
C. (2) & (4)
D. (3) & (4)

2. The statement below is correct or not?

An income-paying entity which pays an amount to an individual providing services
without a labour contract where the total income to be paid is one million dong on
each occasion, then such income-paying entity must deduct PIT (10% of the
income) before paying such amount to the individual.

A. Correct
B. Incorrect

3. Ms. Tiffany is working part-time for ABC Co without a labor contract. Her monthly
income is VND6millon. She has only this one source of income. She estimates that
total income in 2020 shall be below taxable threshold. She registed her personal tax
code.
Which statement below is correct?
A. The ABC Co needs to withhold her PIT 10% upon payment of income
B. The ABC Co needs to withhold her PIT with progessive tax rate upon payment
of income.
C. Ms. Tiffany could make a commitment in stipulated form and submit to the
paying body for not withholding tax
4. Mr Phu, a 40-year-old Vietnamese citizen, is general director of GIV JSC, a
Vietnamese joint stock company with diversified operations in various sectors in
Vietnam. In his remuneration package for 2019, his incentive bonus includes an award
of 100,000 shares of GIV JSC if he successfully achieves the corporate performance
as set out at the beginning of 2019. Tony can choose to receive either the shares or
cash equivalent to the market share price as at 31 December 2019. In both cases the
award will be made in June 2020.
The market price of the GIV JSC shares as at 4 January 2019 and 31 December 2019
was VND45,000 and VND48,000 respectively.
GIV JSC has obtained guidance from the tax authorities instructing that the share
options are taxable in the year when the shares are sold, and that the taxable
employment income is the difference between the market price at the time of exercise
and the exercise price (i.e. the price which the employee has to pay for the shares).
Tony is responsible for his personal income tax (PIT).
Required: the tax rates and timing of taxation in respect of the sale of the shares
received as an incentive bonus of Mr Tony Phu’s investment income for the
year 2010;

A. If Tony chooses to receive the shares, the investment income (capital gain) from
the sale of the shares will become taxable when they are sold, and PIT will be
payable at the rate of 20% of the profit gain
B. If Tony chooses to receive the shares, the investment income (capital gain) from
the sale of the shares will become taxable when they are sold, and PIT will be
payable at the rate of 2% sales proceeds
C. If Tony chooses to receive the shares, the investment income (capital gain) from
the sale of the shares will become taxable when they are sold, and PIT will be
payable at the rate of 0·1% of the sales proceeds.

5. Mr Phu, a 40-year-old Vietnamese citizen, is general director of GIV JSC, a

Vietnamese joint stock company with diversified operations in various sectors in
Vietnam. In his remuneration package for 2019, he will receive a share option to
purchase 50,000 shares of GIV JSC at the nominal value of VND10,000 per share
at the beginning of 2019. These options had to be mandatorily exercised on 4
January 2019 (i.e. Tony had to purchase the shares on that date), and the
purchase cost of VND500 million was to be deducted from the additional salary
he received in February 2019. The shares were sold on 31 December 2019 at
their market price and the proceeds paid in cash to Tony on the same date.
The market price of the GIV JSC shares as at 4 January 2019 and 31 December
2019 was VND45,000 and VND48,000 respectively. On 6 August 2019, GIV JSC
paid a dividend of VND6,000 per share held (including the shares received from
the exercise of the share options). GIV JSC has obtained guidance from the tax
authorities instructing that the share options are taxable in the year when the
shares are sold, and that the taxable employment income is the difference
between the market price at the time of exercise and the exercise price (i.e. the
price which the employee has to pay for the shares). Tony is responsible for his
personal income tax (PIT).
Required: the tax rates and timing of taxation in respect of the sale of the shares
received from the exercise of the share options of Mr Tony Phu’s investment
income for the year 2019.
A. The investment income (capital gain) from the sale of the shares will become taxable
on 4 January 2019, and PIT will again be payable at the rate of 0·1% of the sales
proceeds
B. The investment income (capital gain) from the sale of the shares will become taxable
when they are sold on 31 December 2019, and PIT will again be payable at the
rate of 0·1% of the sales proceeds.

C. The investment income (capital gain) from the sale of the shares will become
taxable when they are sold on 31 December 2019, and PIT will again be payable
at the rate of 2% of the sales proceeds
D. The investment income (capital gain) from the sale of the shares will become
taxable on 4 January 2019, and PIT will again be payable at the rate of 5% of the
sales proceeds.
6. Mr Phu, a 40-year-old Vietnamese citizen, is general director of GIV JSC, a
Vietnamese joint stock company with diversified operations in various sectors in
Vietnam. In his remuneration package for 2019, he will receive a share option to
purchase 50,000 shares of GIV JSC at the nominal value of VND10,000 per share
at the beginning of 2019. These options had to be mandatorily exercised on 4
January 2019 (i.e. Tony had to purchase the shares on that date), and the
purchase cost of VND500 million was to be deducted from the additional salary
he received in February 2019. The shares were sold on 31 December 2019 at
their market price and the proceeds paid in cash to Tony on the same date.
The market price of the GIV JSC shares as at 4 January 2019 and 31 December
2019 was VND45,000 and VND48,000 respectively. On 6 August 2019, GIV JSC
paid a dividend of VND6,000 per share held (including the shares received from
the exercise of the share options). GIV JSC has obtained guidance from the tax
authorities instructing that the share options are taxable in the year when the
shares are sold, and that the taxable employment income is the difference
between the market price at the time of exercise and the exercise price (i.e. the
price which the employee has to pay for the shares). Tony is responsible for his
personal income tax (PIT),
Required: the tax rates and timing of taxation in respect of the dividend from the
shares of Mr Tony Phu’s investment income for the year 2019.
A. Dividends are subject to PIT at the rate of 0.1% 6 August 2019
B. Dividends are subject to PIT at the rate of 2% on 31 December 2019.
C. Dividends are subject to PIT at the rate of 5% on 6 August 2019
D. Dividends are subject to PIT at the rate of 5% on 31 December 2019.