What types of income are subject to annual PIT finalization in Vietnam?

What types of income are subject to annual PIT finalization in Vietnam?

Pursuant to Clause 6, Article 8 of Decree 126/2020/ND-CP, amended by Clause 3, Clause 4, and Clause 5, Article 1 of Decree 91/2022/ND-CP, the provisions are as follows:

Types of taxes declared monthly, quarterly, yearly, separately, and tax finalization declaration

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6. Types of taxes, revenues declared annually and at the point of dissolution, bankruptcy, termination of operation, termination of contracts, or business reorganization. In case of corporate transformation (excluding state enterprises going public) where the transforming enterprise inherits all tax obligations of the converted enterprise, tax finalization does not need to be declared until a decision on business conversion is made, the enterprise finalizes taxes at the end of the year. Specifically as follows:

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d) Personal income tax for organizations, individuals paying taxable personal income from salaries, wages; individuals with income from salaries, wages authorizing tax finalization for organizations, individuals paying income; individuals with income from salaries, wages directly finalizing tax with tax authorities. Specifically as follows:

d.1) Organizations, individuals paying income from salaries, wages are responsible for declaring tax finalization and finalizing on behalf of authorized individuals by the organization, individual paying income, irrespective of whether tax withholding arises. If no income payment arises, personal income tax finalization declaration is not required. If an individual is a worker transferred from an old organization to a new organization due to mergers, consolidations, divisions, splits, business type conversions, or the old and new organizations are within the same system, the new organization is responsible for tax finalization under the individual's authorization for both income paid by the old organization and must collect personal income tax withholding certificates issued by the old organization (if any).

d.2) Resident individuals with income from salaries, wages authorizing tax finalization to the paying organization, individual. Specifically:

Individuals with income from salaries, wages signing labor contracts of 03 months or more at one place and actually working there at the time the organization, individual paying income conducts tax finalization, even in cases of not working a full 12 months in the year. If an individual is a worker transferred from an old organization to a new organization according to clause d.1 of this point, the individual may authorize tax finalization for the new organization.

Individuals with income from salaries, wages signing labor contracts of 03 months or more at one place and actually working there at the time the organization, individual paying income finalizes taxes, even in cases of not working a full 12 months of the year; concurrently, they have sporadic income at other places averaging no more than 10 million VND per month in the year and have had personal income tax withheld at a rate of 10% if no tax finalization is requested for this part of the income.

d.3) Resident individuals with income from salaries, wages directly declaring personal income tax finalization with tax authorities in the following cases:

Owing additional tax payable or having overpaid tax proposing a refund or offset to the next tax period, except in the following cases: individuals owing additional tax payable under annual finalization of up to 50,000 VND; individuals owing tax less than the tax already preliminarily paid without a refund request or offset to the next tax period; individuals with income from salaries, wages signing labor contracts of 03 months or more at one unit, concurrently having sporadic income at other places averaging no more than 10 million VND per month in the year and have had personal income tax withheld at a rate of 10% if no request is made, then tax finalization is not required for this part of income; individuals whose employers purchase life insurance (excluding voluntary pension insurance), other non-compulsory insurance with accumulated insurance fees on which the employer or insurer has withheld personal income tax at a rate of 10% on the insurance fee corresponding to the part the employer purchases or contributes for the employee, then the employee is not required to finalize personal income tax for this part of income.

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Thus, according to the above regulation, only income from salaries and wages is required to finalize personal income tax annually.

What types of income are subject to annual PIT finalization in Vietnam? (Image from the Internet)

Which entity shall specify receiving authorities of PIT declaration finalizations in Vietnam?

Pursuant to Article 45 of the Law on Tax Administration 2019, it is stipulated as follows:

Receiving authorities of tax declaration dossiers

1. Taxpayers submit tax declaration dossiers at the directly managing tax authority.

2. In case tax declaration dossiers are submitted according to a single-window mechanism, the location for submitting tax declaration dossiers follows the regulations of that mechanism.

3. The location for submitting tax declaration dossiers for exported and imported goods follows the provisions of the Law on Customs.

4. the Government of Vietnam stipulates the location for submitting tax declaration dossiers in the following cases:

a) Taxpayers engaging in multiple production and business activities;

b) Taxpayers conducting production and business in multiple localities; taxpayers having tax obligations arising for types of taxes declared and paid separately;

c) Taxpayers having tax obligations arising from land revenues; granting rights to exploit water resources, mineral resources;

d) Taxpayers having tax obligations arising for personal income tax settlement;

dd) Taxpayers declaring taxes through electronic transactions and other necessary cases.

Thus, according to the above regulation, if taxpayers have personal income tax settlement obligations, the Government of Vietnam stipulates the location for submitting tax declaration dossiers.

What is the extension period for submitting the tax finalization in Vietnam?

Pursuant to Article 46 of the Law on Tax Administration 2019, it is stipulated as follows:

Extension of submission of tax declaration dossiers

1. Taxpayers unable to submit tax declaration dossiers on time due to natural disasters, calamities, epidemics, fires, unexpected accidents, may be extended by the head of the directly managing tax authority.

2. The extension period is not more than 30 days for submitting monthly, quarterly, yearly tax declaration dossiers, tax declarations separately; 60 days for submitting tax finalizations from the expiration date of submitting the tax declaration dossier.

3. Taxpayers must send a written request for extension of submission of tax declaration dossiers to the tax authority before the expiration of the submission deadline, stating clearly the reason for the extension request with confirmation from the commune-level People's Committee or local police where the extension case occurs, as prescribed in Clause 1 of this Article.

4. Within 3 working days from the receipt of the written request for an extension of submission of tax declaration dossiers, the tax authority must reply in writing to the taxpayer whether the extension is accepted or not.

Therefore, the extension period for submitting the tax finalization is 60 days from the expiration date for submitting the tax declaration dossier.