I. SUBJECTS SUBJECT TO TAX FINALIZATION
1. For individuals who directly finalize with tax authorities
Residents who earn incomes from salaries, wages from two or more places but do not meet the conditions for being authorized to make finalization as prescribed, must directly declare PIT finalization with tax authorities if there is additional tax payable or overpaid tax to be refunded or offset in the next tax period.
Individuals present in Vietnam for less than 183 days in the first calendar year, but counting in 12 consecutive months from the first day of presence in Vietnam for 183 days or more, the first year of finalization is 12 consecutive months from the first day of presence in Vietnam.
Individuals who are foreigners ending their working contracts in Vietnam shall make tax finalization declarations with tax authorities before leaving the country. If an individual has not yet completed tax finalization procedures with the tax agency, he/she shall authorize an income paying organization or another organization or individual to finalize tax according to regulations on tax finalization applicable to individuals. In case the income paying organization or other organizations or individuals receive authorization for finalization, they must be responsible for the additional PIT payable or have the overpaid tax refunded.
Residents earning incomes from salaries, wages paid from abroad and residents earning incomes from salaries, wages paid from international organizations, Embassies, Consulates that have not yet withheld tax in the year, they must finalize directly with tax authorities, if there is additional tax payable or overpaid tax amount, request refund or offset in the next tax period.
Residents who earn incomes from salaries, wages and are also eligible for tax reduction due to natural disasters, fires, accidents, fatal diseases that affect their ability to pay tax shall not authorize income-paying organizations, individuals to finalize tax on their behalf, but must directly declare finalization with tax authorities as prescribed.
2. For organizations, individuals paying incomes with salaries, wages
Organizations, individuals that pay income with salaries, wages are responsible for PIT finalization, regardless of whether tax withholding or not, and PIT finalization on behalf of authorized individuals. In case the individual authorizes the PIT finalization for the organization and has an additional tax payable after the finalization of 50,000 VND or less and is eligible for tax exemption, the income-paying organization, individual shall still declare such income-paid personal information in their personal income tax finalization declaration dossiers and do not aggregate additional payable tax amounts of individuals whose additional tax payable after finalization is 50,000 VND or less. In case the income-paying organization has finalized PIT before the effective date of Decree No. 126/2020/ND-CP, it will not be processed retroactively.
In case an individual is an employee who is transferred from the old organization to the new organization because the old organization merges, divides, separates, converts the type of enterprise or the old organization and the new organization are in the same system, the new organization is responsible for finalizing PIT as authorized by the individual for both the income paid by the old organization and the new income-paying organization shall collect the PIT withholding voucher issued by the old income-paying organization to the employee (if any).
If an income-paying organization, individual dissolves, goes bankrupt, terminates operation, terminates contracts or reorganizes its enterprise, it must make a PIT finalization up to the time of dissolution, bankruptcy, operation termination, contract termination or enterprise reorganization. In case of conversion of the type of enterprise (excluding equitized state-owned enterprises) and the converted enterprise inherits all tax obligations of the converted enterprise, it is not required to make PIT finalization until the date of decision on the conversion of the enterprise, the enterprise shall declare the finalization at the end of the year.
3. For authorization of personal income tax finalization
Residents earning incomes from salaries, wages authorize personal income tax finalization for income-paying organizations, individuals, specifically as follows:
– Individuals earning incomes from salaries, wages sign labor contracts for 03 months or more at a place and are actually working there at the time the income-paying organization, individual performs tax finalization, including the case of not working for full 12 months in a calendar year. If an individual is an employee who is transferred from the old organization to the new organization because the old organization merges, divides, separates, converts the type of enterprise or the old organization and the new organization are in the same system, the individual is authorized to finalize the tax for the new organization.
– Individuals earning incomes from salaries, wages sign labor contracts for 03 months or more at a place and are actually working there at the time the income-paying organization, individual performs tax finalization, including the case of not working for full 12 months in a calendar year; and at the same time have current income elsewhere in the year on average not more than 10 million VND and have been withheld PIT at the rate of 10% if there is no requirement for tax finalization on this income.
– After an individual has authorized the tax finalization, the income-paying organization has made the tax finalization on behalf of the individual, if detecting that the individual is directly subject to tax finalization with the tax authority, the income-paying organization shall not adjust its PIT finalization, only issue tax withholding voucher to the individual according to the finalization number and write in the lower left corner of the tax withholding voucher the following: “Company … Finalized PIT on behalf of Mr/Ms…. (by authorization) at line (No) … of the Appendix List 05-1/BK-TNCN” for the individual to directly finalize tax with the tax authority. If the income-paying organization, individual uses electronic PIT withholding vouchers, they shall print and convert from the original electronic PIT withholding vouchers and write the above-mentioned contents in the converted printed copies to provide to taxpayers.
II. SUBJECTS NOT SUBJECT TO TAX FINALIZATION
1. For individuals
Individuals earning incomes from wages, salaries in the following cases are not required to finalize personal income tax:
– Individuals whose additional personal income tax payable after the finalization of each year is 50,000 VND or less. Tax-exempt individuals in this case determine the exempted tax amounts themselves, are not required to submit personal income tax finalization dossiers and are not required to submit tax exemption dossiers. In case the finalization period from 2019 and earlier has been finalized before the effective date of Decree No. 126/2020/ND-CP, no retroactive processing shall be carried out;
– Individuals whose personal income tax payable is smaller than the temporarily paid tax amount without request for tax refund or offset in the next tax return period;
– Individuals earning incomes from salaries, wages sign labor contracts for 03 months or more at an unit, and at the same time have a current average monthly income of not more than 10 million VND in other places in the year and have been withheld PIT at the rate of 10%, if there is no request, then no tax finalization is required for this income;
– Individuals whose employer buys life insurance (except voluntary retirement insurance), other optional insurance with accrued premiums for which the employer or insurance enterprise has withheld PIT at the rate of 10 % on the premium amount corresponding to the part purchased or contributed by the employer to the employees, employees do not have to finalize PIT on this income.
2. For organizations, individuals paying incomes with salaries, wages
Organizations, individuals paying incomes with salaries, wages that are not required to make PIT finalization include: organizations, individuals that do not generate income-payment in the year; income-paying organizations, individuals temporarily stop operating and doing business for the whole calendar year.
III. FAMILY ALLOWANCES
1. Family allowances rate
The family allowances rate is specified in Resolution No. 954/2020/UBTVQH14 dated June 2, 2020 of the National Assembly Standing Committee, specifically as follows :
– The deduction for taxpayers is 11 million VND/month (132 million VND/year);
– The deduction for each dependent is 4.4 million VND/month.
2. Deductions for dependents
To be eligible for deduction for dependents, taxpayers must register for deduction for dependents according to regulations. If taxpayers have not yet calculated family allowances for dependents in the tax year, deduction for dependents shall be calculated from the month in which the raising obligation arises when the taxpayer makes tax finalization and has registered for family allowances for dependents. Particularly for other dependents as guided in Item d.4, Point d, Clause 1, Article 9 of Circular 111/2013/TT-BTC, the deadline for registration of family allowances is December 31 of the tax year, past the above time limit, the family allowances for that tax year will not be calculated.
If taxpayers subject to authorization for finalization have not yet calculated family allowances for dependents in the tax year, deduction for dependents shall also be calculated from the month in which the raising obligation arises when the taxpayer makes the authorized finalization and has registered for family allowances for dependents through an income-paying organization.
Employees who work at dependent units, business locations, receiving income from salaries and wages from the head office in another province, can register for family allowances for dependents at the tax authority managing the head office or dependent units, business locations. In case the employee registers for family allowances for dependents at the dependent unit, business location, the dependent unit, business location is responsible for transferring the employee’s documents proving dependent to the head office. The head office is responsible for reviewing and keeping documents proving dependent according to regulations and presenting them to tax authorities for tax inspection and examination.
If the individual changes the workplace, the registration and submission of documents proving dependent must still be carried out under the guidance at Item h.2.1.1.1, Point h, Clause 1, Article 9 of Circular 111/2013/TT-BTC of the Ministry of Finance.
3. Documents regarding family allowances for dependents
a) For individuals who submit a document for registration of direct dependents at the tax office, the document shall include:
+ Dependent registration form, made according to form No. 07/DK-NPT-TNCN issued together with Appendix II of Circular 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
+ Documents proving dependents as guided at Point g, Clause 1, Article 9 of Circular 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance.
+ In case the dependent is directly raised by the taxpayer, it must be certified by the People’s Committee of the commune/ward where the dependent resides, made according to form No. 07/XN-NPT-TNCN issued together with Appendix II of Circular 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
b) In case an individual registers for family allowances for dependents through an income-paying organization or individual, the individual shall submit a dependent registration document as guided at Point a, Clause 3, Section III of this Official Dispatch to the income-paying organization or individual. Income-paying organizations or individuals summarize it according to the Appendix Summary of dependent registration for the people with family allowances, form no. 07/THDK-NPT-TNCN issued together with Appendix II of Circular 80/2021/TT-BTC dated September 29, 2021 by the Ministry of Finance and submit it to the tax authority according to regulations.
IV. TAX FINALIZATION DECLARATION PROCEDURES
1. Tax finalization declaration
1.1. Dossier of declaration of PIT finalization
At Point b, Section 9.2 and Point b, Section 9.9, Clause 9 of Appendix I issued together with the Government’s Decree No. 126/2020/ND-CP dated October 19, 2020 providing for PIT finalization declaration dossiers.
In Clause 2, Article 87 of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance guiding: “2. The tax declaration form prescribed in this Circular is applicable to tax periods starting from January 1, 2022 onward. The tax finalization declaration for the tax period 2021 is also applied according to the form specified in this Circular.”
Accordingly, the PIT finalization declaration from the tax year 2021 is as follows:
a) For individuals who declare PIT finalization directly with tax authorities, the PIT finalization dossier includes:
– Personal income tax finalization declaration form No. 02/QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
– Appendix of list of family allowances for dependents, form No. 02-1/BK-QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
– Copies (photocopies from the original) of documents proving the tax amount deducted, temporarily paid in the year, tax paid abroad (if any). In case the income-paying organization fails to issue tax withholding documents to the individual because the income-paying organization has ceased to operate, the tax authority shall base on the tax branch’s database to consider and process the tax finalization dossier for the individual without having the tax withholding documents. In case the income-paying organization, individual uses an electronic PIT withholding document, the taxpayer shall use the copy of the electronic PIT withholding document (the paper copy shall be converted from the original electronic PIT withholding documents by the taxpayer themselves sent by the income-paying organization, individual).
– A copy of the tax withholding certificate (specifying which income tax declaration has been paid) issued by the income-paying agency or a copy of the bank statement for the tax amount paid abroad with the taxpayer’s certification in the case prescribed by foreign law, foreign tax authorities do not issue certificates of tax payment.
– Copies of invoices and vouchers evidencing contributions to charity funds, humanitarian funds, study promotion funds (if any).
– Documents proving the amount of money paid by the foreign income-paying unit, organization in case the individual receives income from international organizations, embassies, consulates and receives income from abroad.
– Dossier for registration of dependents as guided at Point a, Clause 3, Section III of this Official Letter (if deductions are calculated for dependents at the time of tax finalization for dependents who have not yet registered dependents) .
b) For organizations and individuals paying income, the PIT finalization declaration dossier is as follows:
– Personal income tax finalization declaration form No. 05/QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
– Appendix of a detailed list of individuals subject to tax according to the partial progressive schedule, form No. 05-1/BK-QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
– Appendix of a detailed list of individuals subject to tax at the full tax rate, form No. 05-2/BK-QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
– Appendix of detailed list of dependents for family allowances, form No. 05-3/BK-QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry Finance.
c) In case the individual authorizes the income-paying organization to finalize on behalf of the individual, the individual shall make a Power of Attorney for personal income tax finalization from the tax period of 2021 according to form No. 08/UQ-QTT- issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry Finance.
1.2. Additional declaration of PIT finalization declaration
– In case organizations, individuals make additional declarations without changing their tax obligations, they only have to submit an explanation of the additional declaration and relevant documents, not have to submit an additional declaration.
– In case organizations, individuals have not submitted the annual tax finalization declaration, the taxpayer shall make additional declarations of monthly and quarterly tax declaration with errors or omissions, and concurrently summarize additional declaration data into the annual tax finalization declaration.
– In case organizations, individuals have submitted the annual tax finalization declaration, then:
+ For individuals who directly declare tax or directly finalize tax, only additionally declare the annual tax finalization declaration dossier.
+ For organizations, individuals that pay incomes with salaries, wages, they must also make additional declarations for the annual tax finalization declaration and the monthly and quarterly declarations with corresponding errors or omissions.
2. Where to submit tax finalization declarations
The place to submit the personal income tax finalization dossier shall comply with the specific instructions in Clause 8, Article 11 of the Government’s Decree No. 126/2020/ND-CP dated October 19, 2020. In case an individual declares and submits a PIT finalization declaration at the website https://canhan.gdt.gov.vn, the system has a function to assist in determining the finalization tax authority based on information related to the tax obligations arising in the year declared by the individual.
The place to submit the personal income tax finalization dossier is determined as follows:
2.1. Income-paying organizations shall submit PIT finalization declarations to the tax offices directly managing such income-paying organizations.
2.2. For individuals who directly finalize with tax authorities
– Residents who earn salary, wages in one place and are eligible to self-declare tax in the year, shall submit tax finalization declaration dossiers at the tax office where the individual directly declares tax in the year as prescribed at Point a, Clause 8, Article 11 of Decree No. 126/2020/ND-CP. If an individual has income from salary, wages at two or more places, including the case where there are both direct declaration of income and withheld income from the paying organization, he/she shall submit tax finalization declaration dossiers at the tax agency where the largest source of income is in the year. In case the largest source of income cannot be determined in the year, the individual shall choose the place to submit the finalization dossier at the tax agency directly managing the paying organization or the place where the individual resides.
– Residents earning salary, wages that are eligible for withholding at source from two or more places shall submit a tax finalization declaration as follows:
+ Individuals who have calculated family allowances for themselves at any income-paying organization, individual shall submit a tax finalization declaration at the tax agency directly managing such income-paying organization, individual. If an individual changes his/her workplace and at an organization, individual paying the final income with family allowances, he/she shall submit the tax finalization declaration to the tax authority managing the organization, individual paying the final income. If an individual changes his/her workplace and at an organization, individual paying the final income without family allowances, he/she shall submit the tax finalization declaration to the tax authority where the individual resides. If the individual has not yet calculated the family allowances for himself/herself at any income-paying organization, individual, he/she shall submit the tax finalization declaration to the tax authority where the individual resides.
+ In case the resident does not sign a labor contract, or signs a labor contract for less than 03 months, or signs a service provision contract with income at one place or many places where 10% has been withheld, he/she shall submit the tax finalization declaration to the tax authority where the individual resides.
+ Residents in the year and earn incomes from salaries, wages at one place or many places but at the time of finalization do not work at any income-paying organizations, individuals, the place of submission of tax finalization declaration dossiers shall be where the individual resides.
– Residents earning incomes from salaries, wages that directly finalize PIT with tax authorities and have a dossier of request for tax reduction due to natural disasters, fires, accidents, fatal diseases, the place of submission of tax finalization declaration dossiers is the tax agency where the individual submits the tax reduction dossiers. Tax agencies handling tax reduction dossiers are responsible for handling tax finalization dossiers according to regulations.
V. DEADLINE FOR SUBMISSION OF TAX FINALIZATION DECLARATION
Pursuant to the provisions at Points a and b, Clause 2, Article 44 of the Law on Tax Administration No. 38/2019/QH14 of the National Assembly, the deadline for declaring and submitting PIT finalization dossiers is as follows:
– For income-paying organizations: The deadline for submitting tax finalization declarations is the last day of the third month from the end of the calendar year.
– For individuals who directly finalize tax: The deadline for submitting tax finalization dossiers is the last day of the fourth month from the end of the calendar year. If an individual has a PIT refund but is late in submitting a tax finalization declaration as prescribed, no penalty will be applied for administrative violations in overdue tax finalization declaration.
– If the deadline for submitting tax finalization dossiers coincides with a prescribed holiday, the deadline for submitting tax finalization dossiers is the next working day of that holiday according to the provisions of the Civil Code.