What are procedures for personal income tax refund processed for individuals who have delegated the income payers to settle tax in Vietnam?

What are cases where individuals are entitled to tax refunds in Vietnam?

According to Point a, Clause 2, Article 8 of the 2007 Personal Income Tax Law, individuals are entitled to tax refunds in the following cases:

- The amount of tax paid is greater than the tax payable;

- Individuals have paid tax but have taxable income below the taxable threshold;

- Other cases as decided by competent state authorities.

What are procedures for personal income tax refund processed for individuals who have delegated the income payers to settle tax in Vietnam?

According to Clause 2, Article 28 of Circular 111/2013/TT-BTC which stipulates tax refunds as follows:

Tax Refunds

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

2. For individuals who have authorized tax finalization to organizations or individuals distributing income to finalize on their behalf, the individual's tax refund is processed through the organization or individual distributing income. The organization or individual distributing income offsets the excess and deficient taxes of individuals. After offsetting, if there is still an excess in tax paid, it can be offset in the next period or refunded if requested.

3. For individuals who directly declare to the tax authority, they can opt for a refund or offset in the next period at the same tax office.

4. In cases where an individual incurs a personal income tax refund but delays submitting the tax finalization declaration as stipulated, no penalty is applied for administrative violations for late tax finalization declaration submission.

Thus, for individuals who have authorized tax finalization to organizations or individuals distributing income to finalize on their behalf, the personal tax refund is processed through the organization or individual distributing income. Accordingly:

- The organization or individual distributing income carries out the offset of excess and deficient taxes for individuals.

- After offsetting, if there remains an excess in taxes paid, it can be carried over to the next period, or a refund can be issued if requested.

What are procedures for personal income tax refund processed for individuals who have delegated the income payers to settle tax in Vietnam? (Image from the Internet)

Vietnam: What does a personal income tax refund claim include?

According to Clause 2, Article 71 of the 2019 Law on Tax Administration, which stipulates the tax refund claim:

tax refund claim

1. The taxpayer subject to a tax refund prepares and submits the tax refund claim to the competent tax administration authority.

2. The tax refund claim includes:

a) A document requesting a tax refund;

b) Documents related to the tax refund request.

Thus, according to the above regulations, the personal income tax refund claim should contain:

(1) A document requesting a tax refund;

(2) Documents related to the request for a tax refund.

What is the procedure for receipt and processing of tax refund claims in Vietnam?

According to Article 72 of the 2019 Law on Tax Administration, the procedures for receipt and processing of tax refund claims are as follows:

- The tax administration authority is responsible for receiving tax refund claims as stipulated below:

+ The tax authority directly managing the taxpayer receives the tax refund claim for cases eligible for tax refunds under tax laws. The tax authority managing the revenue receives the dossier for refunding overpaid amounts; for refunds of overpaid amounts as per corporate income tax finalization and personal income tax finalization, the tax authority receives the corporate income tax finalization dossier and personal income tax finalization dossier of the taxpayer receiving the overpaid amount refund dossier.

+ The customs authority managing the revenue receives the tax refund claim for cases eligible for tax refunds under tax laws; in cases where foreigners and overseas Vietnamese departing with goods eligible for tax refunds, the customs authority where exit procedures are completed receives the tax refund claim.

- Taxpayers submit tax refund claims through the following methods:

+ Directly submit at the tax administration authority;

+ Send via postal service;

+ Submit electronically via the tax administration's electronic portal.

- Within three working days from the date of receipt of the tax refund claim, the tax administration authority classifies the dossiers and notifies the taxpayer of the acceptance of the dossier and the deadline for resolving the tax refund claim, or notifies the taxpayer in writing if the dossier is incomplete.

- The Minister of Finance shall detail this Article.

Where is the location for checking tax refund claims in Vietnam?

According to Article 74 of the 2019 Law on Tax Administration, the locations for checking tax refund claims are prescribed as follows:

- Dossiers eligible for immediate tax refunds are checked at the headquarters of the tax administration authority.

- Dossiers subject to pre-checking before a tax refund are checked at the headquarters of the taxpayer or the headquarters of related organizations or individuals.