What are regulations on responsibilities of income payer regarding PIT refund when being delegated to settle tax in Vietnam?

What are regulations on responsibilities of income payer regarding PIT refund when being delegated to settle tax in Vietnam?

Based on Article 28 of Circular 111/2013/TT-BTC which regulates PIT refunds as follows:

PIT Refund

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

2. For individuals who have authorized tax finalization to organizations or individuals paying income to finalize on their behalf, the refund is processed through the income-paying organization or individual. The income-paying organization or individual shall offset the excess tax paid and the tax payable of the individuals. After offsetting, if there is still excess tax paid, it can be offset against the subsequent period or refunded if requested.

3. Individuals who declare directly with the tax authorities can choose to get a refund or have it offset against the subsequent period at the same tax authority.

4. If individuals have a PIT refund but are late in filing the tax finalization declaration, no penalty for administrative violations for late tax finalization declaration is applied.

Therefore, in cases where the employee is eligible for a PIT refund but has authorized the company for tax payment and finalization, the organization or company paying the income has the following responsibilities:

- For individuals who have authorized tax finalization to organizations, the PIT refund for the individual is processed through the income-paying organization or individual.

The income-paying organization or individual shall offset the excess tax paid and the tax payable of the individuals. After offsetting, if there is still excess tax, it can be offset against the subsequent period or refunded if requested.

What are regulations on responsibilities of income payer regarding PIT refund when being delegated to settle tax in Vietnam? (Image from the Internet)

Vietnam: Is an employee eligible for a PIT refund when the amount paid is equal to the amount due?

Based on Clause 2, Article 8 of the Personal Income Tax Law 2007, individuals are eligible for tax refunds in the following cases:

Tax Management and Refunds

1. The registration, declaration, tax deduction, tax payment, tax finalization, tax refund, handling of tax law violations, and other tax management measures are carried out in accordance with tax management laws.

2. Individuals are eligible for tax refunds in the following cases:

a) The amount of tax paid is greater than the amount due;

b) Individuals who paid tax but have taxable income below the taxable threshold;

c) Other cases as decided by the competent state agency.

Employees are eligible for a PIT refund in the following three cases:

[1] The amount of tax paid is greater than the amount due;

[2] Individuals who paid tax but have taxable income below the taxable threshold;

[3] Other cases as decided by the competent state agency.

Therefore, if the amount of PIT paid equals the amount due, it is not a case eligible for a refund according to the legal regulations.

What are submission methods for PIT refund applications in Vietnam?

Based on Clause 2, Article 72 of the Tax Administration Law 2019 which regulates as follows:

Receiving and Responding to Tax Refund Applications

1. The tax administration agency receives tax refund applications as follows:

a) The direct management tax authority receives tax refund applications for cases eligible for tax refunds according to tax laws. The managing tax authority receives applications to return excess payments; for cases of returning excess payments based on corporate income tax finalization, PIT finalization, the tax authority receives the respective tax finalization applications to process the return of excess payments;

b) The customs authority where the revenue is managed receives tax refund applications for cases eligible for tax refunds according to tax laws; in cases of foreigners or overseas Vietnamese with export goods eligible for tax refunds, the customs authority at the point of exit receives the tax refund application.

2. Taxpayers submit tax refund applications using the following methods:

a) Direct submission at the tax administration agency;

b) Via postal service;

c) Electronic submission through the tax administration agency's electronic portal.

3. Within 3 working days from the date of receiving the tax refund application, the tax administration agency classifies the application and notifies the taxpayer about the acceptance of the application and the time frame for resolving the tax refund or issues a written notice in case the application is incomplete.

4. The Minister of Finance details this Article.

Therefore, according to the above regulation, employees can submit PIT refund applications through the following three methods:

{1} Direct submission at the tax administration agency;

{2} Via postal service;

{3} Electronic submission through the tax administration agency's electronic portal.