Is it required to submit a tax return if there is no arising personal income tax withholding in Vietnam?

Is it required to submit a tax return if there is no arising personal income tax withholding in Vietnam?

Based on Clause 3 Article 7 of Decree 126/2020/ND-CP, as amended by Clause 2 Article 1 of Decree 91/2022/ND-CP, which specifies the cases where the PIT declaration form is not required as follows:

Tax Declaration Dossiers

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3. Taxpayers are not required to submit tax declaration dossiers in the following cases:

a) Taxpayers engaged in activities and businesses subject to non-taxable according to tax laws for each type of tax.

b) Individuals with income exempt from tax according to personal income tax laws and as stated at point b, clause 2, Article 79 of the Tax Administration Law, except individuals receiving inheritance or gifts that are real estate; transferring real estate.

c) Export processing enterprises only engaged in export activities are not required to submit value-added tax declaration dossiers.

d) Taxpayers temporarily ceasing activities and business according to Article 4 of this Decree.

đ) Taxpayers submitting dossiers to terminate the tax code, except for cases of ceasing operations, terminating contracts, reorganizing enterprises per clause 4, Article 44 of the Tax Administration Law.

e) Personal income tax declarants who are organizations or individuals paying income, subject to monthly or quarterly PIT declarations, and there is no arising personal income tax deduction in that month or quarter.

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Simultaneously, Clause 1 Article 25 of Circular 111/2013/TT-BTC states that tax deduction is when the organization or individual paying income calculates the tax amount to be deducted from the taxpayer's income before paying them.

Thus, according to the above regulation:

- If there is an arising PIT deduction in a month/quarter, a PIT declaration form must be submitted.

- If there is no arising PIT deduction in a month/quarter, a PIT declaration form is not required.

Is it required to submit a tax return if there is no arising personal income tax withholding in Vietnam? (Image from the Internet)

When are taxpayers exempted from submission of tax declaration dossiers in Vietnam?

Based on Clause 3 Article 7 of Decree 126/2020/ND-CP as amended by Clause 2 Article 1 of Decree 91/2022/ND-CP, the following cases are specified where taxpayers are not required to submit tax declaration dossiers:

- Taxpayers only engaged in activities and businesses subject to non-taxable according to tax laws for each type of tax.

- Individuals with income exempt from tax according to personal income tax laws and as stated at point b, clause 2, Article 79 of the Tax Administration Law 2019, except individuals receiving inheritance or gifts that are real estate; transferring real estate.

- Export processing enterprises only engaged in export activities are not required to submit value-added tax declaration dossiers.

- Taxpayers temporarily ceasing activities and business according to Article 4 of this Decree.

- Taxpayers submitting dossiers to terminate the tax code, except for cases of ceasing operations, terminating contracts, reorganizing enterprises per clause 4, Article 44 of the Tax Administration Law 2019.

- Personal income tax declarants who are organizations or individuals paying income, subject to monthly or quarterly PIT declarations, and there is no arising personal income tax deduction in that month or quarter.

What are penalties for failing to submit the PIT declaration form in Vietnam?

Based on Article 13 of Decree 125/2020/ND-CP, the following regulations apply:

Penalties for Violating Tax Declaration Submission Deadlines

1. A warning shall be issued for late tax declaration submission from 01 to 05 days, given extenuating circumstances.

2. A fine ranging from VND 2,000,000 to VND 5,000,000 applies for late tax declaration submission from 01 to 30 days, excluding cases stated in Clause 1 of this Article.

3. A fine ranging from VND 5,000,000 to VND 8,000,000 applies for late tax declaration submission from 31 to 60 days.

4. A fine ranging from VND 8,000,000 to VND 15,000,000 applies to one of the following acts:

a) Late tax declaration submission from 61 to 90 days;

b) Late tax declaration submission from 91 days or more without arising tax payable;

c) Failing to submit a tax declaration without arising tax payable;

d) Failing to submit appendixes as required for tax management concerning businesses with related-party transactions along with the corporate income tax settlement dossier.

5. A fine ranging from VND 15,000,000 to VND 25,000,000 applies for late tax declaration submission over 90 days from the deadline, provided there arises tax payable and the taxpayer has paid the full tax amount, late payment interest into the state budget before the tax authority announces the tax inspection or audit decision, or before the tax authority makes a record of the late submission as stipulated in clause 11 Article 143 of the Tax Administration Law.

In cases where the fine amount, if applied according to this clause, exceeds the tax amount arising from the tax declaration, the maximum fine in such cases shall be equal to the tax amount arising but not lower than the average amount of the fine range stipulated in clause 4 of this Article.

6. Remedial measures:

a) Must pay the overdue tax amount to the state budget for violations stated in clauses 1, 2, 3, 4, and 5 of this Article if the late tax declaration leads to late tax payment;

b) Must submit the tax declaration and appendices thereto for violations stated in points c and d of clause 4 in this Article.

According to the above regulations, the level of administrative penalty for failing to submit a PIT declaration form is determined based on the length of the overdue period.

In addition to administrative penalties, violators (both organizations and individuals) are also required to implement remedial measures.

Note: The administrative penalty levels specified above apply to organizational violations. In case of individual violations, the administrative penalty level is half that imposed on organizations.