Which entities are eligible for personal income tax refund in Vietnam?

Which entities are eligible for PIT refund in Vietnam?

According to Article 28 of Circular 111/2013/TT-BTC regarding PIT refund:

Tax refund

1. The refund of personal income tax applies to the persons that have registered and obtain tax codes when they submit the tax finalization form.

2. If the person has delegated the income payer to finalize tax, tax refund shall be made via the income payer. The income payer shall offset the overpaid and underpaid tax. After offsetting, the overpaid tax shall be offset against the tax in the next period or refunded on request.

3. The person that declares tax directly may choose to claim a tax refund or offset it against the tax in the next period at the same tax authority.

4. Person eligible for the refund of personal income tax that submits the tax finalizationbehind schedule is exempt from fines for overdue tax statement.

Thus, the refund of personal income tax applies to the persons that have registered and obtain tax codes when they submit the tax finalization form.

Which entities are eligible for PIT refund in Vietnam? (Image from the Internet)

What does the PIT refund claim in Vietnam include?

Under Article 42 of Circular 80/2021/TT-BTC stipulating the refund claim, the PIT refund claim includes:

*PIT refund claim for income from salaries and remunerations

(1) In case the income payer finalize tax as authorized by the individual, the claim shall include:

- The claim form No. 01/DNXLNT Download;

- The authorization letter in case the taxpayer does not apply for tax refund himself/herself, unless the tax agent submits the tax refund claim under a contract between the tax agent and the taxpayer;

- The list of tax payment documents according to Form No. 02-1/HT Download (prepared by the income payer).

(2) In case the income earner directly finalizes tax with the tax authority and has overpaid tax on the terminal PIT form, the tax refund claim is not required.

The tax authority shall decide whether to refund overpaid tax according to PIT finalization dossier as per regulations.

* Refund claim for overpayments of other taxes and amounts includes:

- The claim form No. 01/DNXLNT Download;

- The authorization letter in case the taxpayer does not apply for tax refund himself/herself, unless the tax agent submits the tax refund claim under a contract between the tax agent and the taxpayer;

- Enclosed documents (if any).

* In case refund upon ownership transfer, enterprise conversion, merger, consolidation, division, bankruptcy, dissolution, shutdown where a site inspection at the taxpayer's premises is required according to Point g Clause 1 Article 110 of the Tax Administration Law 2019 and Chapter VIII of Circular 80/2021/TT-BTC, the taxpayer is not required to submit the tax refund claim as prescribed in this Clause if the inspection verdict or other inspection-related documents shows that the taxpayer has overpaid tax.

The tax authority shall complete procedures for refunding the overpaid tax according to the inspection verdict or other inspection-related documents.

Which categories are the PIT refund claims in Vietnam classified into?

Under Article 73 of Tax Administration Law 2019:

Classification of tax refund claims

1. A tax refund claim might be eligible for refund before inspection or subject to inspection before refund.

2. The following tax refund claims are subject to inspection before refund:

a) Tax refund claims submitted for the first time in the cases specified by tax laws. If a taxpayer’s first tax refund claim is rejected, the next claim will be considered the first.

b) Any claim submitted within 02 years from the day on which the penalties on the taxpayer’s tax evasion is imposed;

c) Claims submitted by organizations that are dissolved, bankrupt, shut down, sold or transferred to state-owned enterprises;

d) High-risk claims as classified by the risk management system;

dd) Any tax refund claim eligible for refund before inspection but the taxpayer fails to provide explanation or documents proving the declared tax, or the explanation or documents provided by the taxpayer is not convincing enough;

e) Claims for refund of taxes on exports or imports that are not paid for via a commercial bank or credit institution as prescribed by law;

g) Claims for refund of tax on exports or imports subject to inspection before refund prescribed by the Government.

3. Claims other than those in the cases specified in Clause 2 of this Article shall be eligible for refund before inspection

4. The Minister of Finance shall elaborate this Article.

Thus, the PIT refund claim is classified into two categories as follows:

- Claims subject to inspection before refund in case of first-time submission.

- Claims subject to refund before inspection in subsequent submissions.