When are individuals with income from salary or wages not required to finalize personal income tax (PIT) in Vietnam?

When are individuals with income from salary or wages not required to finalize personal income tax (PIT) in Vietnam?

According to point d.3, clause 6, Article 8 of Decree 126/2020/ND-CP, the regulation is as follows:

Taxes declared monthly, quarterly, annually, separately, and tax finalization declarations

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Resident individuals with income from salary or wages directly declare personal income tax finalization with the tax authority in the following cases:

There is additional tax payable or overpaid tax requested for refund or offset against the tax return of the next period, except in the following cases: individuals with additional tax payable after the annual finalization under 50,000 VND; individuals with tax payable less than the pre-paid tax without requesting for refund or offset against the next period's tax return; individuals with income from salary or wages under a labor contract of 03 months or more at a unit, concurrently having other income from different places, averaged monthly during the year, not exceeding 10 million VND, and particularly have had personal income tax withheld at a rate of 10% and do not have a request, they are not required to finalize the tax for this part of the income; individuals whose life insurance (excluding voluntary pension insurance) or other non-mandatory insurance with accumulative insurance premiums paid by their employers, and the insurer or the employer has withheld personal income tax at a rate of 10% on the corresponding insurance premiums, the employees are not required to finalize personal income tax on this part of the income.

Individuals present in Vietnam in the first calendar year for less than 183 days but for 12 consecutive months from the first day present in Vietnam for 183 days or more.

Foreign individuals who terminate their working contracts in Vietnam finalize their personal income tax with the tax authority before exit. If individuals have not completed the tax finalization procedures with the tax authority, they authorize the income-paying organization or another organization or individual to finalize on their behalf according to the regulations on tax finalization for individuals. If the income-paying organization or another organization or individual accepts the authorization for finalization, they are responsible for any additional tax payable or any tax refund of the individual.

Resident individuals with income from salary or wages subject to tax reduction due to natural disasters, fire, accidents, serious illnesses affecting the ability to pay taxes must directly finalize taxes with the tax authority according to regulations and cannot authorize the income-paying organization or individual to finalize taxes on their behalf.

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Thus, individuals with income from salary or wages are not required to finalize personal income tax in the following cases:

- Individuals with additional tax payable after the annual finalization under 50,000 VND;

- Individuals with tax payable less than the pre-paid tax without requesting for refund or offset against the next period's tax return;

- Individuals with income from salary or wages under a labor contract of 03 months or more at a unit, concurrently having other income from different places, averaged monthly during the year, not exceeding 10 million VND, and particularly have had personal income tax withheld at a rate of 10% and do not have a request, they are not required to finalize the tax for this part of the income;

- Individuals whose life insurance (excluding voluntary pension insurance) or other non-mandatory insurance with accumulative insurance premiums paid by their employers, and the insurer or the employer has withheld personal income tax at a rate of 10% on the corresponding insurance premiums, the employees are not required to finalize personal income tax on this part of the income.

When are individuals with income from salary or wages not required to finalize PIT in Vietnam? (Image from the Internet)

When are organizations or individuals paying income from salary or wages not required to finalize PIT in Vietnam?

According to Official Dispatch 2783/CTTPHCM-TTHT 2024 of Ho Chi Minh City Tax Department, organizations or individuals paying income from salary or wages are not required to finalize PIT in cases including: organizations or individuals do not incur income payments during the year; organizations or individuals that temporarily suspend their operations or business activities for the whole calendar year.

What are cases in which individuals with income from salary or wages directly finalize PIT in Vietnam?

According to point d.3, clause 6, Article 8 of Decree 126/2020/ND-CP, resident individuals with income from salary or wages directly declare personal income tax finalization with the tax authority in the following cases:

- There is additional tax payable or overpaid tax requested for refund or offset against the tax return of the next period, except in the cases stated in section 1 of this article;

- Individuals present in Vietnam in the first calendar year for less than 183 days but for 12 consecutive months from the first day present in Vietnam for 183 days or more.

- Foreign individuals who terminate their working contracts in Vietnam finalize their personal income tax with the tax authority before exit. If individuals have not completed the tax finalization procedures with the tax authority, they authorize the income-paying organization or another organization or individual to finalize on their behalf according to the regulations on tax finalization for individuals. If the income-paying organization or another organization or individual accepts the authorization for finalization, they are responsible for any additional tax payable or any tax refund of the individual.

- Resident individuals with income from salary or wages subject to tax reduction due to natural disasters, fire, accidents, serious illnesses affecting the ability to pay taxes must directly finalize taxes with the tax authority according to regulations and cannot authorize the income-paying organization or individual to finalize taxes on their behalf.