Are benefits for employees in disadvantaged areas subject to personal income tax in Vietnam?

Are benefits for employees in disadvantaged areas subject to PIT in Vietnam?

According to Article 2 of Circular 111/2013/TT-BTC, taxable incomes are specified as follows:

Taxable incomes

According to Article 3 of the Law on PIT and Article 3 of the Decree No. 65/2013/ND-CP, the incomes subject to PIT (hereinafter referred to as taxable incomes) include:

1. Incomes from business

Incomes from business are incomes earned from the production and sale. To be specific:

a) Incomes from production and sale of goods and services that belong to all industries such as: production, goods sale, construction, construction, restaurants, service provision including lease of houses, right to use land, water surface, and other property.

b) Incomes from freelance works of individuals in the fields that are licensed or certificated as prescribed by law.

c) Incomes from agriculture, forestry, salt production, and fishery that are not eligible for tax exemption according to Point e Clause 1 Article 3 of this Circular.

2. Incomes from wages and remunerations.

Incomes from wages and remunerations (hereinafter referred to as wages) are incomes paid to employees from employers, including:

a) Wages, remunerations, and the other amounts paid as wages or remunerations in cash or not in cash.

b) Allowances and benefits, except for:

b.1) Monthly benefits, lump-sum benefits and allowances according to regulations of law on incentives for contributors.

b.2) Monthly allowances and lump-sump allowances for the persons that participate in the resistance movements, national defense, fulfillment of international tasks, and discharged volunteers.

b.3) Benefits for national defense and security; subsidies for the armed forces.

b.4) Benefits for dangerous or harmful works.

b.5) Benefits for employees in disadvantaged areas.

b.6) Irregular allowances for difficulties, occupational accident benefits, occupational illness benefits, lump-sum allowances for childbirth or adoption, maternity leave benefits, post-maternity recovery benefits, benefits for reduction in work ability, lump-sum pension, monthly widow’s pension, severance pay, redundancy pay, unemployment benefits, and other benefits according to the Labor Code and the Law on Social insurance.

b.7) Benefits for beneficiaries of social security.

b.8) Benefits for senior officers.

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The benefits for employees in disadvantaged areas are not subject to PIT.

Are benefits for employees in disadvantaged areas subject to PIT in Vietnam? (Image from Internet)

What is the deadline for annual PIT finalization in Vietnam?

According to Article 28 of Decree 65/2013/ND-CP, monthly, the income payer will temporarily deduct the tax based on the salaried income of the employees.

According to Clause 1, Article 55 of the Law on Tax Administration 2019:

Tax payment deadlines

1. In case tax is calculated by the taxpayer, the tax payment deadline is the deadline for submission of the tax declaration dossier. In case of submission of supplementary tax documents, the tax payment deadline is the deadline for submission of the erroneous tax declaration dossier.

The deadline for paying corporate income tax, which is paid quarterly, is the 30th of the first month of the next quarter.

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Additionally, according to Clause 2, Article 44 of the Law on Tax Administration 2019 regarding the deadline for PIT finalization:

Deadlines for submission of tax declaration dossiers

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. For taxes declared annually:

a) For annual tax statement dossiers: the last day of the 3rd month from the end of the calendar year or fiscal year. For annual tax declaration dossiers: the last day of the first month from the end of the calendar year or fiscal year

b) For annual PIT statements prepared by income earners: the last day of the 4th month from the end of the calendar year;

c) For presumptive tax declarations prepared by household businesses and individual businesses: the 15th of December of the preceding year. For new household businesses and individual businesses: within 10 days from the date of commencement of the business.

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The PIT finalization deadline is thus divided into two periods for two different cases:

- No later than the last day of the third month from the end of the calendar year or fiscal year for the tax settlement declaration filed by the enterprise on behalf of the employee.

- No later than the last day of the fourth month from the end of the calendar year for the PIT finalization declaration filed directly by the individual.

What is the time limit for PIT refund after submitting tax finalization dossiers in Vietnam?

According to Article 75 of the Law on Tax Administration 2019:

Time limits for processing tax refund claims

1. In case a claim is eligible for refund before inspection, within 06 working days from the day on which the tax authority issues the notice of receipt of the claim, the tax authority shall decide whether to provide the refund, demand inspection before refund in the cases mentioned in Clause 2 Article 73 of this Law, or reject the claim if it is unqualified.

In case information on the tax refund claim is different from that of the tax authority, the tax authority shall request the taxpayer in writing to provide explanation and additional information. The time needed for providing explanation and additional information shall not be included in the time limit for processing tax refund claims.

2. In case a claim is subject to inspection before refund, within 40 working days from the day on which the tax authority issues the notice of receipt of the claim, the tax authority shall decide whether to provide the refund or reject the claim.

3. If the tax authority fails to issue the tax refund decision by the deadline specified in Clause 1 and Clause 2 of this Article, the tax authority shall pay an interest at 0,03% per day on the refundable and the number of days late. The interest shall be paid by central government budget in accordance with regulations of law on state budget.

The time limit for PIT refund is thus stipulated as follows:

- For cases of tax refund before inspection, no later than 06 working days from the date the tax authority issues a notice of acceptance of the file and the tax refund processing time, the tax authority must decide to refund the tax.

- For cases of inspection before tax refund, no later than 40 days from the date the tax authority issues a written notice of acceptance of the file and the tax refund processing time, the tax authority must decide to refund the tax.