When is it mandatory to issue a personal income tax withholding certificate in Vietnam?

When is it mandatory to issue a personal income tax withholding certificate in Vietnam?

Pursuant to Clause 2, Article 25 of Circular 111/2013/TT-BTC:

Tax withholding and withholding certificates

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2. Withholding certificates

a) Organizations and individuals that pay income and have withheld tax as guided in Clause 1 of this Article must issue a tax withholding certificate upon the request of the individual subject to withholding. If the individual authorizes tax finalization, the withholding certificate is not issued.

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For organizations and individuals that pay income and have withheld the tax amount before paying the income to individuals, if the individual subject to withholding requests it, it is mandatory to issue a personal income tax withholding certificate.

Specifically, individuals are entitled to request the issuance of a personal income tax withholding certificate if they are subject to withholding in one of the cases specified in Clause 1, Article 25 of Circular 111/2013/TT-BTC, as follows:

(1) Withholding for income of non-resident individuals.

(2) Withholding for income from wages and salaries.

(3) Withholding for income from acting as insurance agents, lottery agents, multi-level marketing; income from leasing assets to enterprises and economic organizations.

(4) Withholding for income from capital investment.

(5) Withholding for income from the transfer of securities.

(6) Withholding for income from the transfer of contributed capital by non-resident individuals.

(7) Withholding for income from winnings.

(8) Withholding for income from royalties, franchising.

(9) Withholding for certain other cases (withholding 10% at source before income is paid).

Furthermore, the issuance of personal income tax withholding certificates in certain specific cases is regulated as follows:

- For individuals not signing a labor contract or signing a labor contract under 03 months: Individuals have the right to request the organization or individual paying the income to issue a withholding certificate for each tax deduction or to issue one certificate for multiple deductions within a tax period.

Example 15: Mr. Q signs a service contract with Company X for garden maintenance in the company's premises monthly from September 2013 to April 2014. Mr. Q's income is paid monthly by the company, amounting to 3 million VND each month. In this case, Mr. Q can request the company to issue a withholding certificate for each month or a certificate reflecting the tax deducted from September to December 2013 and one certificate from January to April 2014.

- For individuals signing a labor contract from three (03) months and above: The organization or individual paying the income only issues one withholding certificate for one tax period.

Example 16: Mr. R signs a long-term labor contract (from September 2013 to the end of August 2014) with Company Y. In this case, if Mr. R needs to directly finalize taxes with the tax authority and requests the company to issue a withholding certificate, the company will issue one certificate reflecting the tax deducted from September to December 2013 and one certificate from January to the end of August 2014.

Note: In case the individual authorizes tax finalization, the organization or individual paying the income does not issue a withholding certificate.

When is it mandatory to issue a personal income tax withholding certificate in Vietnam? (Image from the Internet)

Vietnam: How many days after submitting the tax finalization dossier will the personal income tax refund be processed?

Pursuant to Article 75 of the Law on Tax Administration 2019 regulations are as follows:

Deadline for processing tax refund dossiers

1. For dossiers under the category of refund before examination, no later than 6 working days from the date on which the tax authority issues a notice on acceptance of the dossier and the deadline for processing the tax refund dossier, the tax authority must decide to refund the tax to the taxpayer or notify the taxpayer that the dossier will be examined before refund if falling under the cases specified in Clause 2, Article 73 of this Law, or notify non-refund to the taxpayer if the dossier is not eligible for a refund.

If the information declared in the refund dossier differs from the information managed by the tax authority, the tax authority shall notify in writing for the taxpayer to provide explanations and supplement information. The time for explanations and supplementing information is not counted in the tax refund processing time.

2. For dossiers under the category of examination before refund, no later than 40 days from the date on which the tax authority issues a written notice on acceptance of the dossier and the deadline for processing the tax refund dossier, the tax authority must decide to refund the tax to the taxpayer or notify non-refund if the dossier is not eligible for a refund.

3. If the tax authority delays issuing the refund decision past the deadlines specified in Clauses 1 and 2 of this Article, and the delay is due to the tax authority's fault, in addition to the tax amount to be refunded, the tax authority must also pay interest at 0.03%/day on the amount to be refunded for the number of days late. The interest source is paid from the central budget according to regulations on the state budget.

Thus, the time for processing the personal income tax refund is regulated as follows:

- For dossiers under the category of refund before examination, no later than 6 working days from the date on which the tax authority issues a notice on acceptance of the dossier and the deadline for processing the tax refund dossier, the tax authority must decide to refund the tax to the taxpayer.

- For dossiers under the category of examination before refund, no later than 40 days from the date on which the tax authority issues a written notice on acceptance of the dossier and the deadline for processing the tax refund dossier.

Vietnam: How many types of tax refund dossiers are there?

Pursuant to Article 73 of the Law on Tax Administration 2019, regulations are as follows:

Classification of tax refund dossiers

1. Tax refund dossiers are classified into the category of examination before refund and the category of refund before examination.

2. Dossiers for examination before refund include:

a) Dossiers of taxpayers requesting a refund for the first time for each refund case according to tax law. If the taxpayer has sent the tax refund dossier to the tax authority for the first time but is not eligible for a refund, the subsequent refund requests will still be considered as the first time;

b) Dossiers of taxpayers requesting a refund within 2 years from the time they were penalized for tax evasion;

c) Dossiers of organizations dissolving, bankrupt, terminating operations, selling, transferring, or handing over state-owned enterprises;

d) Dossiers classified as high-risk in tax management;

dd) Dossiers in the category of refund before examination but overdue for providing explanations or supplementing dossiers or explanations and supplements do not prove the correctness of the declared tax amount;

e) Dossiers for goods imports and exports not paid through a commercial bank or other financial institutions as prescribed by law;

g) Dossiers for goods imports and exports in the inspection before refund category as regulated by the Government of Vietnam.

3. Dossiers in the refund before examination category are the dossiers of taxpayers not falling into the cases specified in Clause 2 of this Article.

4. The Minister of Finance specifies the details of this Article.

Thus, tax refund dossiers are classified into 02 types as follows:

- Dossiers in the category of examination before refund;

- Dossiers in the category of refund before examination.