If not requesting a tax refund, does the tax authority automatically refund personal income tax in Vietnam?

Vietnam: If not requesting a tax refund, does the tax authority automatically refund personal income tax in Vietnam?

Based on Article 28 of Circular 111/2013/TT-BTC regarding personal income tax refunds as follows:

Tax Refund

1. Personal income tax refunds apply to individuals who have registered and have a tax code at the time of submitting the tax finalization dossier.

2. For individuals who have authorized tax settlement to the organization or individual paying income, the individual's tax refund is carried out through the income-paying organization or individual. The income-paying organization or individual offsets the excess paid, underpaid taxes of the individuals. After the offsetting, if there is still an excess tax paid, it can be offset against the following period or refunded if there is a request for refund.

3. For individuals who declare directly to the tax authority, they can choose to receive a tax refund or offset it in the following period at the same tax authority.

4. In cases where individuals are eligible for a personal income tax refund but have delayed submitting the tax finalization declaration, no administrative penalty for declaring tax finalization will be applied.

Thus, based on the above regulation, if there is no request for a personal income tax refund, the excess tax paid will automatically be offset in the next tax period. Furthermore, the tax authority will not proactively refund taxes to the worker.

If not requesting a tax refund, does the tax authority automatically refund personal income tax in Vietnam?(Image from the Internet)

What does the personal income tax refund claim for salary and wage income include?

Based on the provisions in Clause 1, Article 42 of Circular 80/2021/TT-BTC specified as follows:

Excess Payment refund claim

1. Personal income tax refund claim for income from salaries and wages

a) In cases where the organization or individual paying income from salaries and wages finalizes on behalf of individuals with authorization

The dossier includes:

a.1) Written request for handling excess tax payment, late payment interests, fines following form No. 01/DNXLNT issued with Appendix I of this Circular;

a.2) Power of attorney in accordance with legal regulations in cases where the taxpayer does not directly perform the tax refund procedure, except where a tax agent submits a tax refund claim according to the signed contract between the tax agent and the taxpayer;

a.3) Tax payment voucher list following form No. 02-1/HT issued with Appendix I of this Circular (applicable to income-paying organizations or individuals).

b) In cases where individuals with income from salaries and wages directly finalize tax with the tax authority, having excess paid tax and request a refund on the personal income tax finalization declaration, there is no need to submit a refund claim.

The tax authority resolves refunds based on the personal income tax finalization dossier to settle excess payment refunds for taxpayers according to regulations.

2. The dossier for excess payment refunds for other taxes and charges includes:

...

Thus, the personal income tax refund claim for income from salaries and wages includes:

- For cases where organizations or individuals paying income from salaries and wages finalize on behalf of individuals with authorization:

+ Written request for handling excess tax payment, late payment interests, fines following form 01/DNXLNT issued with Appendix 1 of Circular 80/2021/TT-BTC;

Form 01/DNXLNT: Download here.

+ Power of attorney in accordance with legal regulations in cases where the taxpayer does not directly perform the tax refund procedure, except where a tax agent submits a tax refund claim according to the signed contract between the tax agent and the taxpayer;

+ Tax payment voucher list following form 02-1/HT issued with Appendix 1 of Circular 80/2021/TT-BTC (applicable to income-paying organizations or individuals).

Form 02-1/HT: Download here.

- In cases where individuals with income from salaries and wages directly finalize tax with the tax authority, having excess paid tax and request a refund on the personal income tax finalization declaration, there is no need to submit a refund claim.

The tax authority resolves refunds based on the personal income tax finalization dossier to settle excess payment refunds for taxpayers according to regulations.

What are cases where individuals are eligible for personal income tax refunds in Vietnam?

Based on Clause 2, Article 8 of the Law on Personal Income Tax 2007 regulations on cases where individuals are eligible for personal income tax refunds as follows:

Tax Management and Refunds

1. The taxpayer registration, declaration, tax deduction, payment, settlement, refund, handling of violations against tax laws, and tax management measures are carried out in accordance with the provisions of tax management laws.

2. Individuals are eligible for tax refunds in the following cases:

a) The amount of tax paid is greater than the amount of tax payable;

b) Individuals have paid tax but have taxable income below the taxable threshold;

c) Other cases as decided by competent state authorities.

Thus, based on the above regulations, individuals are eligible for personal income tax refunds in the following cases:

- The tax amount paid is greater than the amount payable.

- Individuals have paid tax but their taxable income does not reach the taxable threshold.

- Other cases as regulated by competent state authorities.