What are the procedures for personal income tax refund for employees in Vietnam?

When are individuals eligible for a personal income tax refund in Vietnam?

According to the provisions of Article 8 of the 2007 Personal Income Tax Law, cases eligible for a personal income tax refund include:

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

- Individuals have paid tax but their taxable income does not reach the level required to pay tax;

- Other cases as decided by competent state authorities.

What are the procedures for personal income tax refund for employees in Vietnam? (Image from the Internet)

What are the procedures for personal income tax refund for employees in Vietnam?

Based on Article 2 of the process issued with Decision 679/QD-TCT in 2023, the regulations are as follows:

Process Content

The tax refund process includes the following content:

1. Receiving the tax refund application as prescribed in Article 32, Article 43 of Circular No. 80/2021/TT-BTC dated September 29, 2021, of the Ministry of Finance guiding the implementation of some articles of the Law on Tax Administration and Decree No. 126/2020/ND-CP dated October 19, 2020, of the Government of Vietnam detailing some articles of the Law on Tax Administration (hereinafter referred to as Circular No. 80/2021/TT-BTC) for the following cases:

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d) Personal income tax refund for individuals directly settling taxes with tax authorities: The tax refund application for individuals with income from wages and salaries directly settling taxes with tax authorities as prescribed in point b, clause 1, Article 42 of Circular No. 80/2021/TT-BTC.

e) Other overpayments:

- The tax refund application for overpayment of various taxes and other collections as prescribed in clause 2, Article 42 of Circular No. 80/2021/TT-BTC.

- The personal income tax refund application for income from wages and salaries of organizations and individuals making payment by wages and salaries to employees who have authorized as prescribed in point a, clause 1, Article 42 of Circular No. 80/2021/TT-BTC.

2. Classifying tax refund applications as prescribed in Article 33, Article 44 of Circular No. 80/2021/TT-BTC:

3. Resolving tax refund applications as prescribed in Article 34, Article 45 of Circular No. 80/2021/TT-BTC:

a) Resolving tax refund applications under the category of pre-refund.

b) Resolving tax refund applications under the category of pre-audit refund.

4. Appraising tax refund applications: Appraising applications under the category of appraisal according to the regulations at the Regulation on providing legal opinions on draft legal normative documents, draft legal normative documents, and appraisal of draft administrative documents issued by tax authorities at all levels issued with Decision No. 1033/QD-TCT dated June 1, 2018, by the Director General of the General Department of Taxation and replacement, amendment, supplementary documents (if any).

5. Making a refund decision:

a) Issuing a refund decision or a combined refund and compensation decision for state budget revenue, Notification of non-refund (as prescribed in Article 36, Article 46 of Circular No. 80/2021/TT-BTC).

b) Issuing a payment decision to the bank as an agent for value-added tax (VAT) refund as prescribed in Article 36 of Circular No. 80/2021/TT-BTC, Article 21 of Circular No. 72/2014/TT-BTC dated May 30, 2014, of the Ministry of Finance amended and supplemented in clause 15, Article 1 of Circular No. 92/2019/TT-BTC dated December 31, 2019, of the Ministry of Finance regarding VAT refund for banks as VAT refund agents.

6. Issuing a refund order or a combined refund and compensation order for state budget revenue in compliance with the policies on state budget accounting and operational procedures of the State Treasury.

7. Recovering the refund as prescribed in Article 40, Article 50 of Circular No. 80/2021/TT-BTC.

Thus, the personal income tax refund process includes the following steps:

- Receiving the tax refund application;- Classifying the tax refund application;- Resolving the tax refund application;- Appraising the tax refund application;- Making a refund decision.

What are the procedures for checking the tax refund application to determine its eligibility and classifying it?

According to the provisions of clause 3, Article 10 of the process issued with Decision 679/QD-TCT in 2023, the process of checking the tax refund application to determine its eligibility and classifying it is as follows:

- Checking the tax refund application for eligibility

Immediately after the taxpayer's tax refund application is transferred to the refund subsystem, the TMS application system automatically reconciles the declared data on the taxpayer's personal income tax settlement declaration with the aggregated data during the tax settlement period arising at all tax authorities nationwide in the tax management database (including taxable income, amount payable, tax paid, tax deducted via the paying agency, declared deduction for self and dependents).

+ A tax refund application is eligible if the declared data matches the aggregated settlement data in the tax management database or the declared data does not match the aggregated settlement data in the tax management database but the return processing subsystem has accepted the taxpayer's supplementary information and documents.

+ A tax refund application is not eligible if the declared data does not match the aggregated settlement data in the tax management database and has not provided supplementary information and documents or the return processing subsystem has not accepted the taxpayer's supplementary information and documents.

- Classifying eligible tax refund applications is implemented similarly according to the steps guided in clause 2, Article 7 of the process issued with Decision 679/QD-TCT in 2023.