Shall individuals be entitled to tax refund if their taxed incomes do not reach a tax-liable level in Vietnam?

Shall individuals be entitled to tax refund if their taxed incomes do not reach a tax-liable level in Vietnam?

Based on Article 8 of the Law on Personal Income Tax 2007, which regulates tax management and refunds, it states:

Tax Management and Refund:

1. The procedures for taxpayer registration, declaration, tax deduction, tax payment, tax finalization, tax refund, handling of tax-related violations, and other tax management measures are executed according to the law on tax management.

2. An individual is entitled to a tax refund in the following cases:

a) The tax amount already paid is larger than the payable tax amount;

b) The individual has paid tax but has taxable income below the tax-liable level;

c) Other cases as decided by competent state authorities.

Hence, an individual can get a personal income tax refund under the following scenarios:

- The tax amount already paid is larger than the payable tax amount;

- The taxpayer has paid tax but has taxable income below the tax-liable level;

- Other cases as decided by competent state authorities.

Therefore, according to the above regulation, if an individual has paid personal income tax but their income does not reach the taxable level, then they will be refunded the tax amount.

Shall individuals be entitled to tax refund if their taxed incomes do not reach a tax-liable level in Vietnam? (Image from Internet)

Vietnam: What documents does a personal income tax refund application include?

Based on Article 71 of the Tax Management Law 2019, the taxpayer who is eligible for a refund must prepare and submit a tax refund application to the competent tax authority.

The tax refund application includes:

- A written request for the tax refund.

- Relevant documents related to the tax refund request.

Additionally, based on Clause 2, Article 72 of the Tax Management Law 2019, the taxpayer can submit the personal income tax tax refund application through the following methods:

- Submit the application directly at the tax authority.

- Send the application via postal services.

- Submit the electronic application through the electronic transaction portal of the tax authority.

Regarding the time limit for processing PIT refund applications, it will be carried out as follows:

According to Article 75 of the Tax Management Law 2019:

{1} For applications eligible for refund before verification, no later than 06 working days from the date the tax authority notifies the acceptance of the application and the time for resolving the tax tax refund application.

The tax authority must issue a decision to refund the tax to the taxpayer or issue a notice to transfer the taxpayer’s application for verification before refunding if the case falls under Clause 2, Article 73 of the Tax Management Law 2019, or issue a notice of no tax refund if the application does not meet the refund conditions.

{2} In case the information declared in the tax refund application differs from the tax authority's management information, the tax authority notifies in writing for the taxpayer to explain and supplement information.

The time for explanation and supplementing information is not counted within the time limit for resolving the tax refund application.

{3} For applications subject to verification before refund, no later than 40 days from the date the tax authority notifies in writing the acceptance of the application and the time for resolving the tax refund application, the tax authority must issue a decision to refund the tax to the taxpayer or not refund the tax if the application does not meet the refund conditions.

Note: In the event of delay beyond the prescribed time in clauses 1 and 2 of Article 75 of the Tax Management Law 2019, if the delay in issuing the tax refund decision is due to the tax authority’s fault, besides the payable refund amount, the tax authority must also pay interest at the rate of 0.03%/day on the payable refund amount for the delayed days.

The source of interest payment funds is to be allocated from the central budget according to state budget law.

The time limit for processing PIT refund applications is no later than 06 working days from the date of notification by the tax authority.

What is the responsibility of the tax authority in receiving and responding to PIT refund applications in Vietnam?

Based on Clauses 1 and 3 of Article 72 of the Tax Management Law 2019, the tax authorities have the following responsibilities:

- The tax authority that directly manages the taxpayer receives the tax tax refund application for cases eligible for tax refund according to tax law.- The tax authority that manages the revenue receives the application for refunding overpaid amounts.

In the case of refunding overpaid amounts according to the finalization of corporate income tax or personal income tax, the tax authority receives the corporate income tax finalization or personal income tax finalization application from the taxpayer to process the refund of the overpaid amount.

- Within 03 working days from the date of receiving the tax refund application, the tax authority must classify the application and notify the taxpayer of the application’s acceptance and the time limit for resolving the tax tax refund application.

They must issue a written notification to the taxpayer if the application is incomplete.