May probationary employees under 3 months request the employer to provide PIT withholding certificate in Vietnam?
What are regulations on PIT withholding for probationary employees under 3 months in Vietnam?
Pursuant to Clause 2 Article 3 of the 2007 Law on Personal Income Tax, amended by Clause 1 Article 1 of the 2012 Amended Law on Personal Income Tax, which regulates taxable income from salaries and wages, the salaries of probationary employees are still considered subjects to PIT.
Simultaneously, based on Point i, Clause 1, Article 25 of Circular 111/2013/TT-BTC which defines PIT withholding in certain cases as below:
Withholding Tax and Tax Withholding Documents
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i) Withholding tax for certain other cases
Organizations and individuals who pay wages, allowances, or other remunerations to resident individuals who do not sign labor contracts (as guided in Points c, d, Clause 2, Article 2 of this Circular) or sign labor contracts under three (03) months with a total payment of two million (2,000,000) VND/occasion or more must withhold tax at the rate of 10% on the income before paying it to the individual.
In cases where an individual has only one income subject to withholding tax at the said rate but estimates that the total taxable income, after family deductions, is not sufficient to require tax payment, the individual can make a commitment (as per the form issued with tax management guidelines) and send it to the income paying organization to temporarily exempt from withholding PIT.
Based on the individual's commitment, the income-paying organization will not withhold tax. At the end of the tax year, the income-paying organization must still compile a list and income of individuals not subject to tax withholding (in the form issued with tax management guidelines) and submit it to the tax authority. The individual making the commitment must bear the responsibility for their commitment, and in case of fraudulent acts, they will be handled according to the provisions of the Tax Management Law.
Individuals making commitments under this guidance must be registered taxpayers and have a tax code at the time of commitment.
Thus, probationary employees who do not sign labor contracts or sign contracts under three (03) months with a total income of 2,000,000 VND/occasion or more may be subject to a 10% PIT withholding prior to receiving wages, except for cases where the employee meets the following conditions:
- Having only one income subject to withholding tax but estimating that their total taxable income, after family deductions, is not sufficient to require tax payment.
- The employee with the above income makes a commitment and sends it to the income-paying organization as a basis for not withholding PIT.
May probationary employees under 3 months request the employer to provide PIT withholding certificate in Vietnam?
Pursuant to Point b, Clause 2, Article 25 of Circular 111/2013/TT-BTC regulating the issuance of withholding documents in certain specific cases as follows:
Withholding Tax and Tax Withholding Documents
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- Tax Withholding Documents
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b.1) For individuals not signing labor contracts or signing contracts under three (03) months: the individual has the right to request the income-paying organization or individual to issue a withholding document for each tax withholding or issue a single withholding document for multiple withholdings in a tax period.
Example 15: Mr. Q signs a service contract with employer X to care for the greenery on the employer premises, scheduled once a month from September 2013 to April 2014. Mr. Q's income is paid monthly by the employer at 3 million VND. In this case, Mr. Q may request the employer to issue a withholding document monthly or issue a document reflecting the tax withheld from September to December 2013 and a document for the period from January to April 2014.
b.2) For individuals signing labor contracts of three (03) months or more: the income-paying organization or individual issues only one withholding document for the individual in a tax period.
Example 16: Mr. R signs a long-term labor contract (from September 2013 to the end of August 2014) with employer Y. In this case, if Mr. R is subject to direct tax finalization with the tax authority and requests the employer to issue a withholding document, the employer will issue one document reflecting the tax withheld from September to the end of December 2013 and one document for the period from January to the end of August 2014.
Thus, probationary employees not signing labor contracts or signing contracts under three (03) months have the right to request the income-paying organization or individual to provide a withholding document for each tax withholding or to issue one withholding document for multiple tax withholdings in a tax period.
May probationary employees under 3 months request the employer to provide PIT withholding certificate in Vietnam? (Image from the Internet)
Vietnam: What does the PIT withholding certificate include?
Pursuant to Clause 1, Article 32 of Decree 123/2020/ND-CP, the contents of the PIT withholding certificate include:
- Name of the tax withholding document, model code of the tax withholding document, symbol, and serial number of the PIT withholding certificate;
- Name, address, tax code of the payer;
- Name, address, tax code of the PIT payer (if the tax payer has a tax code);
- Nationality (if the PIT payer is not of Vietnamese nationality);
- Income amount, date of income payment, total taxable income, tax amount withheld; net income;
- Date of issuance of the PIT withholding certificate;
- Name, signature of the income payer.
Note: In the case of using electronic tax withholding documents, the signature on the electronic document is a digital signature.
