Vietnam implements automatic personal income tax refund

Vietnam implements automatic personal income tax refund

The implementation of automatic personal income tax (PIT) refunds nationwide has been initiated by the General Department of Taxation (Ministry of Finance) from early 2025. Specifically, on January 24, 2025, the General Department of Taxation issued Decision 108/QD-TCT 2025 on the procedure for automatic PIT refunds. Regarding the effective date, according to Article 1 of Decision 108/QD-TCT 2025, Decision 108 takes effect immediately from the date of signing, specifically:

Effective Date

1. This Decision takes effect from the date of signing. Heads of tax authorities at all levels are responsible for implementing this Decision.

2. This procedure replaces the regulations on handling personal income tax refund claims for individuals directly settling tax in the refund procedure issued with Decision No. 679/QD-TCT dated May 31, 2023, by the Director-General of the General Department of Taxation./.

This procedure is applied to tax authorities at all levels nationwide, aiming to simplify administrative procedures, shorten claim processing time, and provide convenience for taxpayers.

Additionally, the automatic PIT refund procedure is primarily conducted electronically using the tax sector's information technology system. The system will automatically compile data from sources such as income-paying organizations, taxpayer registration information, dependents, and tax obligations to create a suggested PIT settlement declaration. Taxpayers can check, confirm, or edit the information through the eTax Mobile application before submitting their claim. Once the claim is submitted, if it meets the conditions, the system will process and refund without manual intervention from tax officers.

This implementation is expected to reduce the workload for tax authorities while helping citizens to settle and refund taxes more easily and quickly.

It is anticipated that taxpayers will only need about 3 days to receive the results of the tax refund claim processing, compared to the much longer duration with the previous manual process. This is a significant step forward in the digital transformation of tax management in Vietnam, aligning with the national digital transformation policy.

Vietnam implements automatic personal income tax refund (Image from the Internet)

What is the automatic personal income tax refund procedure in Vietnam?

In Chapter 2 of Decision 108/QD-TCT 2025, the automatic personal income tax refund procedure is detailed in the following three main steps:

Step 1: Create and Receive the Suggested PIT Settlement Declaration

According to Article 4 of Decision 108/QD-TCT 2025, taxpayers (NNT) check information on the eTax Mobile application, through which they can confirm or edit before submitting the personal income tax settlement claim.

- If the taxpayer agrees with the information suggested on the Suggested PIT Settlement Declaration: The taxpayer confirms and submits the personal income tax settlement claim on the application.

- If the taxpayer disagrees with the suggested information: The taxpayer edits the information at the corresponding criteria, supplements the reason for the discrepancy with the data suggested by the tax authority, and submits the claim along with supporting documents as required.

Step 2: Automatic PIT Refund Processing

Based on Article 5 of Decision 108/QD-TCT 2025, the system performs data cross-checking to determine eligibility for tax refunds as follows:

- Check the excess paid tax and the account to receive the refund.

- If eligible, the system automatically creates and electronically signs the Tax Refund Decision, transferring information to the State Treasury for processing the refund according to regulations.

Step 3: Post-Refund Control

According to Article 6 of Decision 108/QD-TCT 2025, the tax sector's information technology system will periodically, quarterly, compile data and issue warnings about cases where organizations and individuals make additional declarations affecting the refunded PIT amount.

- The warning list is provided to tax authorities for the claim processing department to perform post-refund control and tax recovery (if any).

- The head of the tax authority will specifically assign the claim processing department to perform post-refund control and tax recovery according to regulations.

What conditions must be met for a claim to be refunded under the automatic process?

According to Clause 1, Article 5 of Decision 108/QD-TCT 2025, the conditions for a claim to be refunded under the automatic process include:

- At the time of processing the PIT refund claim of the taxpayer, the income-paying organization has fulfilled its obligation to pay substituted PIT deducted or the total PIT that the taxpayer is an individual has fully contributed to the State Budget at the periodic settlement where the taxpayer requests a refund;

- The PIT refund claim has the item "Total taxable income" matching the aggregate data during the tax settlement period according to the tax sector's management database at the time of claim processing and has the item "Total tax requested for refund" less than or equal to the aggregate data during the tax settlement period according to the tax sector's management database at the time of claim processing;

- The receiving refund account information of the taxpayer is verified and linked with the tax sector's management database.