Official Dispatch 369 of 2025 by Tax Department of Vietnam: What are some notes on personal income tax finalization?

Official Dispatch 369 of 2025 by Tax Department of Vietnam: What are some notes on personal income tax finalization?

On February 5, 2025, the Quang Ngai Provincial Tax Department issued Official Dispatch 369/CTQNG-HKDCN regarding some notes on personal income tax (PIT) finalization.

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Specifically, in Official Dispatch 369 of 2025, the Quang Ngai Provincial Tax Department requests agencies, organizations, enterprises, and individuals to note the following:

(1) Incorrect declaration of employees in the annex detailed schedule attached to the PIT finalization declaration form No. 05/QTT-TNCN

According to Clause 1, Article 25 of Circular 111/2013/TT-BTC, for employees signing labor contracts from 03 months or more, the income-paying organization shall deduct PIT according to the progressive tax schedule. For individuals who do not sign labor contracts or sign contracts less than 3 months with a total income of 2 million VND/time or more, a deduction of 10% of the income shall be made before payment to the individual.

Therefore, the detailed declaration of individuals subject to tax on the tax finalization schedule is as follows:

- Annex 05-1/BK-QTT-TNCN: applies to individuals with long-term labor contracts of 3 months or more and are subject to personal income tax calculated by the progressive tax schedule.

- Annex 05-2/BK-QTT-TNCN: applies to individuals with short-term labor contracts under 3 months and are subject to personal income tax calculated by a flat tax rate.

In the case where an individual initially signs a probation contract under 3 months with a 10% deduction, and then signs a long-term contract from 3 months or more with a deduction according to the progressive tax schedule:

- If the employee authorizes the organization for finalization, the organization consolidates the income and tax deducted for that individual and declares it in Annex 05-1/BK-QTT-TNCN for the entire taxable income within the year (including both income deducted according to the progressive tax schedule and at the 10% flat tax rate).

- If the employee does not authorize finalization to the organization, the organization declares the income and taxes deducted for that individual in both Annex 05-1/BK-QTT-TNCN (taxable income deducted according to the progressive tax schedule) and Annex 05-2/BK-QTT-TNCN (income deducted at the 10% flat rate).

(2) Principle and deadline for family deduction registration for dependents

The principle and deadline for family deduction registration for dependents are executed according to the provisions in Clause 1, Article 9 of Circular 111/2013/TT-BTC dated August 15, 2013, of the Ministry of Finance.

* Note: Particularly for other dependents according to the guidelines in subsection d.4, point d, Clause 1, Article 9 of Circular 111/2013/TT-BTC, they must meet the conditions as prescribed in clause 1, Article 9 of Circular 111/2013/TT-BTC, and ensure the principle of obligation and rights of care as prescribed in Articles 71, 104, 105, and 106 of the Law on Marriage and Family 2014.

(3) Authorization for finalization

- Correct identification of individuals authorized to finalize according to subsection d.2, point d, clause 6, Article 8 of Decree 126/2020/ND-CP.

Resident individuals earning income from salaries and wages can authorize tax finalization to the income-paying organization or individual. Specifically:

+ Individuals with income from salaries and wages who sign a labor contract of 03 months or more at one place and are currently working there at the time the organization or individual pays income and performs tax finalization, including cases of not working full 12 months in the calendar year.

In case individuals are transferred employees from the old organization to a new one due to mergers, consolidation, division, separation, conversion of the business entity type, or if the old and new organizations are in the same system, individuals can authorize tax finalization to the new organization.

+ Individuals earning income from salaries and wages who sign a labor contract of 03 months or more at one place and are currently working there at the time the organization or individual performs tax finalization, including situations of not working full 12 months in the calendar year; Additionally, having side income at other places with an average monthly income during the year not exceeding 10 million VND and having had PIT deducted at a rate of 10% if there is no tax finalization request for this part of income.

- PIT finalization authorization in case of transfer: If the individual is an employee transferred from the old organization to the new organization due to the old organization’s merger, consolidation, division, separation, conversion of the business entity type or if the old and new organizations are in the same system, the new organization is responsible for tax finalization as authorized by the individual for the income part from the old organization and collect back the PIT withholding documents issued by the old organization to the employees (if any).

* Note: For organizations authorized for PIT finalization in case of transfers, on the PIT Finalization Declaration form 05/QTT-TNCN, checkbox [04] must be ticked, and on BK05-1, items [13] Taxable Income at the organization before transfer and item [23] Taxes withheld at the organization before the transfer must be completed with full information on taxable income and taxes withheld for these two indicators.

(4) Guidance and support for employees

- Individuals with income from salaries and wages from 02 or more places (excluding individuals transferred within the same organization or system) do not qualify for authorization for finalization to one single organization. The paying organization must inform its employees to self-finalize personal income tax from salaries and wages for individuals who must directly finalize taxes with the Tax authorities because they have income from salaries and wages from 02 or more places conformably.

Coordinate with the Tax office to support and encourage taxpayers to register, install, and use the eTax Mobile application, a personal electronic tax application of the General Department of Taxation, to check dependents’ information and suggest PIT finalization created automatically by the IT application system of the Tax sector. The data aggregation and creation of the suggested tax return are automatically performed by the Tax sector's IT application system immediately after the deadline for filing PIT finalization returns of the income-paying organization.

In cases where the employee does not authorize tax finalization to the paying organization, they can use the function “Create suggested form 02/QTT-TNCN” to finalize, and refund PIT directly with the Tax offices.

Official Dispatch 369 of 2025 by Tax Department of Vietnam: What are some notes on personal income tax finalization? (Image from the Internet)

What is the deadline for submitting the tax finalization return in Vietnam?

Based on point a, point b clause 2 Article 44 of the Law on Tax Administration 2019, the deadlines for filing and submitting the PIT finalization return are as follows:

(1) For organizations paying income: The deadline for filing tax finalization returns is no later than the last day of the third month after the end of the calendar year.

(2) For individuals directly finalizing tax: The deadline for filing tax finalization returns is no later than the last day of the fourth month after the end of the calendar year.

In cases where individuals have tax refunds but submit tax finalization declarations late as per regulations, no penalties are applied to administrative violations for late tax finalization filings.

- If the tax finalization filing deadline coincides with a statutory holiday, the tax finalization filing deadline is considered the next working day following the holiday according to the Civil Code 2015.

How is the personal income tax refund handled for individuals who have authorized tax finalization to the employers in Vietnam?

According to clause 2 Article 28 of Circular 111/2013/TT-BTC, tax refunds are regulated as follows:

Tax Refund

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

2. For individuals who have authorized tax finalization to the organization or individual paying income to finalize instead, the individual’s tax refund is executed through the organization or individual paying income. The payers reconcile overpaid or underpaid taxes of individuals. After reconciliation, if there is an overpaid tax, it can be carried forward to the next period or refunded if requested.

3. For individuals required to file directly with the tax authority, they may choose a tax refund or carry forward to the next period at the same tax authority.

4. If individuals have PIT refunds arising but submit tax finalization returns late, according to regulations, no penalties apply for administrative violations for late tax finalization filings.

Thus, if individuals have authorized tax finalization to the organization or individual paying their income, the tax refund is conducted through the organization or individual paying income. Accordingly:

- The organization or individual paying income reconciles overpaid or underpaid taxes of individuals.

- After reconciliation, if there remains an overpaid tax, it will either be carried forward to the next period or refunded if requested.