Which Subjects Are Exempt from Personal Income Tax Finalization? Is Authorization for Personal Income Tax Finalization Allowed?
Which individuals are not required to settle personal income tax?
According to subsection 1, Section II of Official Dispatch 636/TCT-DNNCN of 2021 stipulating subjects who are not required to settle tax for individuals who directly finalize with the Tax Authority as follows:
"II. SUBJECTS NOT REQUIRED TO SETTLE TAXES
1. For individuals who directly finalize with the Tax Authority
Individuals with income from wages and salaries in the following cases are not required to settle personal income tax:
- Individuals with personal income tax payable after finalization for each year of 50,000 VND or less. Individuals exempt from tax in this case self-determine the amount of tax exempted, are not required to submit personal income tax finalization dossiers, and do not have to submit tax exemption dossiers. In case of finalization periods from 2019 and earlier finalized before the effective date of Decree No. 126/2020/ND-CP, no retrospective handling shall be carried out;
- Individuals with personal income tax payable less than the temporarily paid tax but do not request a tax refund or offset to the next tax period;
- Individuals with income from wages and salaries under labor contracts of three months or more at one unit, concurrently having irregular income from other sources on average not exceeding 10 million VND per month in the year, and have been deducted personal income tax at the rate of 10%, if no request is made, are not required to settle tax for this part of income;
- Individuals who are purchased life insurance (excluding voluntary pension insurance), other non-mandatory insurance with accumulated insurance premiums by their employers, which have been deducted personal income tax at the rate of 10% on the corresponding insurance premium paid by the employer, are not required to settle personal income tax for this part of income."
Which subjects are not required to settle personal income tax? Is it possible to authorize personal income tax finalization?
Which organizations are not required to settle personal income tax?
According to subsection 2, Section II of Official Dispatch 636/TCT-DNNCN of 2021 stipulating subjects who are not required to settle tax for organizations paying salaries and wages as follows:
"II. SUBJECTS NOT REQUIRED TO SETTLE TAXES
...
2. For organizations and individuals paying income from wages and salaries
In cases where organizations do not arise to pay income, they are not required to declare and settle personal income tax"
Is it possible to authorize personal income tax finalization?
According to subsection 3, Section I of Official Dispatch 636/TCT-DNNCN of 2021 stipulating subjects authorized to settle personal income tax as follows:
Resident individuals with income from wages and salaries can authorize personal income tax finalization to organizations or individuals paying income. To be specific:
- Individuals with income from wages and salaries under labor contracts of three months or more at one place and actually working there at the time organizations or individuals paying income carry out the tax finalization, including cases of not working for a full 12 months in a calendar year.
- In case individuals are laborers transferred from the old organization to the new organization due to mergers, consolidations, splits, separations, changes in the form of enterprises, or the old and new organizations are within the same system, individuals can authorize tax finalization to the new organization.
- Individuals with income from wages and salaries under labor contracts of three months or more at one place and actually working there at the time of tax finalization by organizations or individuals paying income, including cases of not working for a full 12 months in a calendar year; at the same time, have irregular income from other sources on average not exceeding 10 million VND per month in the year, and have been deducted personal income tax at the rate of 10%, if no request for tax finalization for this part of income is made.
- After individuals have authorized tax finalization, and the organization paying income has finalized taxes on behalf of the individuals, if it is found that the individuals are subject to direct tax finalization with the tax authority, the organization paying income does not adjust the personal income tax finalization of the paying organization but only issues tax deduction certificates for the individuals according to the finalized amount and notes at the bottom left of the tax deduction certificate the contents: “Company ... has finalized personal income tax on behalf of Mr./Ms. …. (by authorization) at row (number) ... of Appendix Table 05-1/BK-TNCN” for individuals to directly finalize taxes with the tax authority.
Thus, the above are regulations on subjects not required to settle personal income tax, in certain cases as stipulated, individuals can authorize tax finalization.
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