What are the conditions for authorizing the final settlement of personal income tax in 2023? What does the tax finalization dossier include?
What are the conditions for authorizing personal income tax finalization in 2023?
The conditions for authorizing personal income tax (PIT) finalization in 2023 are stipulated in Clause 6, Article 8 of Decree 126/2020/ND-CP.
To be specific, a resident individual with income from salary or wages may authorize an organization or individual paying such income to finalize their PIT if they meet the following conditions:
- The individual has income from salary or wages under a labor contract of three months or more at one place, and is actually working there at the time the organization or individual paying the income carries out the tax finalization, even in the case of not working for the full 12 months in the calendar year.
In the case where an employee is transferred from the old organization to the new organization due to the old organization merging, consolidating, splitting, or converting the type of business, or if the old and new organizations are in the same system, the individual can authorize the new organization to finalize the tax.
- The individual has income from salary or wages under a labor contract of three months or more at one place and is actually working there at the time the organization or individual paying the income carries out the tax finalization, even in the case of not working for the full 12 months in the calendar year; at the same time, they have other freelance income in other places that averages not more than 10 million VND per month in the year and has had PIT deducted at the rate of 10% if there is no requirement for tax finalization for this portion of income.
- Foreign individuals who terminate their working contracts in Vietnam must file a tax finalization declaration with the tax authority before their departure.
In case the individual has not carried out the tax finalization procedures with the tax authority, they may authorize the income-paying organization or other individuals or organizations to finalize taxes as per the regulations on tax finalization for individuals.
In case the income-paying organization or other individuals or organizations receive the authorization to finalize taxes, they must bear the responsibility for any additional PIT payable or any refund of overpaid tax of the individual.
What are the conditions for authorizing personal income tax finalization in 2023? What documents are included in the tax finalization dossier?
What documents do organizations or individuals paying salary or wages need to prepare for personal income tax finalization declaration?
According to point b, sub-item 9.9, Item 9, Appendix I issued with Decree 126/2020/ND-CP, the types of documents that income-payers need to prepare when conducting PIT finalization include:
- Personal income tax finalization declaration form Form
- Appendix of detailed list of individuals subject to tax calculation according to the progressive tariff schedule
- Appendix of detailed list of individuals subject to tax calculation according to the full-rate tariff
- Appendix of detailed list of dependents for family relief deduction.
Is it possible to accumulate the years for personal income tax finalization?
According to point d, clause 6, Article 8 of Decree 126/2020/ND-CP:
Types of taxes declared monthly, quarterly, annually, on each occasion of arise tax obligation, and declare tax finalization
...
6. Types of taxes and collection declared annually and finalized at the time of dissolution, bankruptcy, cessation of activities, termination of contracts, or reorganization of the enterprise. In case of converting the type of enterprise (excluding the equitization of state-owned enterprises), the converting enterprise inherits all the tax obligations of the converted enterprise, so it is not required to finalize taxes up until the decision on enterprise conversion, the enterprise will finalize taxes at the end of the year. To be specific, as follows:
...
d) Personal income tax for organizations or individuals paying taxable income from salary or wages; individuals with income from salary or wages authorizing organizations or individuals paying income to finalize taxes; individuals with income from salary or wages self-declaring tax finalization with the tax authority. To be specific, as follows:
d.1) Organizations or individuals paying income from salary or wages are responsible for declaring and finalizing taxes on behalf of individuals who authorize the tax finalization as paid by the organizations or individuals paying the income, regardless of whether tax withholding arises or not. If the organization or individual does not incur the payment of income, they are not required to declare personal income tax finalization. If an individual is transferred from the old organization to the new organization due to the old organization merging, consolidating, splitting, or converting the type of business, or if the old and new organizations are in the same system, the new organization is responsible for finalizing taxes according to the authorization of the individual for the income paid by the old organization and recollecting the individual income tax withholding certificate issued by the old organization (if any).
d.2) Resident individuals with income from salary or wages authorize organizations or individuals paying income to finalize taxes. To be specific:
...
d.3) Resident individuals with income from salary or wages directly declare personal income tax finalization with the tax authority in the following cases:...
Individuals must finalize personal income tax annually and cannot accumulate multiple years for finalization.
LawNet
