What is the method of distributing personal income tax in Vietnam?

What is the method of distributing personal income tax in Vietnam?

Based on Clause 2, Article 19 of Circular 80/2021/TT-BTC, the method of distributing personal income tax is stipulated as follows:

- distribution of personal income tax for income from salaries and wages:

The taxpayer determines separately the amount of personal income tax to be distributed for income from salaries and wages of individuals working in each province according to the actual tax amount withheld for each individual. In cases where an employee is transferred, rotated, or seconded, based on the time income is paid, if the employee is working in a particular province, the personal income tax withheld will be calculated for that province.

- distribution of personal income tax for income from lottery winnings of individuals winning electronic lottery:

The taxpayer determines separately the amount of personal income tax to be paid for income from lottery winnings at each province where the individual has registered to participate in the lottery through the method of distribution via phone or internet and where the electronic lottery ticket is issued via terminal equipment according to the actual tax amount withheld for each individual.

What is the method of distributing personal income tax in Vietnam? (Image from Internet)

What are procedures for declaration and payment of personal income tax in Vietnam?

Based on Clause 3, Article 19 of Circular 80/2021/TT-BTC, the implementation of distributing personal income tax payment is stipulated as follows:

- Personal income tax for income from salaries and wages:

+ Taxpayers who pay salaries and wages to workers working at a dependent unit or business location in a province different from where the headquarters is located, perform personal income tax withholding on income from salaries and wages as prescribed and submit tax declaration dossiers using form number 05/KK-TNCN, an appendix for determining the amount of personal income tax to be paid to localities entitled to revenue according to form number 05-1/PBT-KK-TNCN issued together with Appendix 2 of Circular 80/2021/TT-BTC to the directly managing tax authority; pay the personal income tax amount on income from salaries and wages into the state budget for each province where workers are employed in accordance with Clause 4, Article 12 of Circular 80/2021/TT-BTC. The personal income tax amounts determined for each province on a monthly or quarterly basis correspond to the personal income tax declaration period and are not reassessed when finalizing personal income tax.

+ Individuals with income from salaries and wages subject to direct tax declaration with the tax authority include: resident individuals receiving income from salaries and wages paid from abroad; non-resident individuals receiving income from salaries and wages arising in Vietnam but paid from abroad; individuals receiving income from salaries and wages paid by International organizations, Embassies, Consulates in Vietnam but yet to withhold tax; individuals receiving stock rewards from the paying unit.

- Personal income tax for income from lottery winnings of individuals winning electronic lottery:

The taxpayer, as the organization paying income, withholds personal income tax on income from lottery winnings of individuals, performs personal income tax declaration as prescribed, submits tax declaration dossiers using form number 06/TNCN, an appendix for determining the amount of personal income tax to be paid to localities entitled to revenue according to form number 05-1/PBT-KK-TNCN issued together with Appendix 2 of Circular 80/2021/TT-BTC to the directly managing tax authority; pay the personal income tax amount on income from lottery winnings into the state budget for each province where the individual has registered to participate in the lottery via phone or internet and where the electronic lottery ticket is issued via terminal equipment in accordance with Clause 4, Article 12 of Circular 80/2021/TT-BTC.

What are regulations on personal income taxpayer in Vietnam?

Based on Article 2 of the Law on Personal Income Tax 2007, the definition of personal income taxpayer is as follows:

- Resident individuals having taxable income arising within and outside the territory of Vietnam.

- Non-resident individuals having taxable income arising within the territory of Vietnam.

Furthermore, residents and non-residents are defined as follows:

- A resident individual is someone who meets one of the following conditions:

+ Present in Vietnam for 183 days or more calculated in a calendar year or 12 consecutive months from the first day present in Vietnam;

+ Having a regular place of residence in Vietnam, including having a registered permanent residence or rented housing in Vietnam under a lease contract.

- A non-resident individual is a person who does not meet the conditions stipulated in Clause 2, Article 2 of the Law on Personal Income Tax 2007.