Vietnam: Shall the tax authority refund personal income tax without request of taxpayers?

Vietnam: Shall the tax authority refund personal income tax without request of taxpayers?

Based on Article 28 of Circular 111/2013/TT-BTC regarding personal income tax refunds as follows:

Tax Refund

1. Personal income tax refunds apply to individuals who have registered and have a tax identification number at the time of submitting the tax finalization dossier.

2. For individuals who have authorized an organization or individual to finalize taxes on their behalf, the tax refund is carried out through the income-paying organization or individual. The income-paying organization or individual will offset excess paid tax, insufficient paid tax among individuals. After offsetting, if there is excess paid tax, it can be offset in the next period or refunded if a refund request is submitted.

3. Individuals who directly declare with the tax authority can choose to receive a tax refund or offset it in the next period at the same tax authority.

4. In cases where an individual incurs a personal income tax refund but is late in submitting the tax finalization declaration as stipulated, penalties for administrative violations related to late tax finalization declarations will not apply.

Thus, the tax authority will not proactively refund personal income tax to taxpayers. Personal income tax refunds only apply to individuals who have registered and have a tax identification number at the time of submitting the tax finalization dossier.

Vietnam: Shall the tax authority refund personal income tax without request of taxpayers? (Image from Internet)

What are the procedure for the tax authority to notify the receipt and preparation of personal income tax refund claims in Vietnam?

Based on Clause 2, Article 10 of the Tax Refund Procedure issued with Decision 679/QD-TCT of 2023 by the Director-General of the General Department of Taxation, the procedure for notifying the receipt and creating personal income tax refund claims by the tax authority is as follows:

- For dossiers submitted electronically by taxpayers:

+ Step 1: Notification of receipt of refund claim

Immediately after issuing a Notification of acceptance of the personal income tax finalization dossier in accordance with the Tax Declaration and Management Procedure, the electronic portal of the General Department of Taxation automatically generates a Notification of receipt of the refund claim (form 01/TB-HT issued with Circular 80/2021/TT-BTC) for the PIT finalization declaration with a refund request sent to the taxpayer.

+ Step 2: prepare refund claim

Immediately after issuing a Notification of receipt of the refund claim, the QHS subsystem and the refund subsystem automatically prepare a refund claim and update the refund claim classification department according to Appendix 3, Annex 2 issued with the Tax Refund Procedure accompanied by Decision 679/QD-TCT of 2023.

- For dossiers submitted through postal services or directly:

The HCVT department and the direct reception department receive the personal income tax finalization dossiers from taxpayers according to the guidance in the Single Window Process. The QHS subsystem and the refund subsystem automatically prepare the refund claim and Notification of receipt of the refund claim (form 01/TB-HT issued with Circular 80/2021/TT-BTC) for personal income tax finalization declarations with a refund request that have been issued a Notification of acceptance of the tax declaration and update the refund claim classification department according to Appendix 3, Annex 2 issued with the Tax Refund Procedure accompanied by Decision 679/QD-TCT of 2023.

What is the procedure for checking refund claims eligible for acceptance and classifying personal income tax refund claims in Vietnam?

Based on Clause 3, Article 10 of the Tax Refund Procedure issued with Decision 679/QD-TCT of 2023 by the Director-General of the General Department of Taxation, the checking of refund claims eligible for acceptance and classification of personal income tax refund claims occurs as follows:

- Checking refund claims eligible for acceptance

Immediately after the taxpayer's refund claim is transferred into the refund subsystem, the TMS application system automatically cross-references the declared data on the personal income tax finalization declaration of the taxpayer with the aggregated data in the tax finalization period across all tax authorities nationwide in the tax management database (including taxable income, payable amount, tax already paid, tax deducted through the paying agency, declared deductions for personal and dependent exemptions).

- refund claims eligible for acceptance are those with declared data precisely matching the aggregated settlement data in the tax management database, or the dossiers with declared data not matching the aggregated settlement data in the tax management database but the return processing subsystem has accepted the taxpayer's additional information documentation explanation.

- refund claims not eligible for acceptance are those with declared data not matching the aggregated settlement data in the tax management database and lacking supplemental information documentation explanation by the taxpayer or not yet accepted for such explanation by the return processing subsystem.

- Classification of refund claims eligible for acceptance follows the same steps as guided in Clause 2, Article 7 of the Tax Refund Procedure issued with Decision 679/QD-TCT of 2023.