Hanoi Tax Department: Can a resident salary earner who has other irregular income authorize the salary payer to finalize tax?
In which case a resident salary earner who has other irregular income can authorize the salary payer to finalize tax?
According to Official Letter 25025/CTHN-TTHT in 2022, the Hanoi Tax Department replied to authorize the finalization of personal income tax as follows:
Pursuant to Clause 6, Article 8 of Decree No. 126/2020/ND-CP detailing a number of articles of the Law on Tax administration stipulating taxes declared monthly, quarterly, annually, separately; tax finalization:
“Article 8. Taxes declared monthly, quarterly, annually, separately; tax finalization
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6. The following taxes and amounts shall be declared annually and finalized when an enterprise is dissolved, shuts down, terminates a contract or undergoes rearrangement. In case of conversion (except equitized state-owned enterprises) where the enterprise after conversion inherits all tax obligations of the enterprise before conversion, tax shall be finalized at the end of the year instead of the issuance date of the decision on conversion. Tax shall be finalized at the end of the year):
d.2) A resident salary earner may authorize the salary payer to finalize tax if:
The salary earner has an employment contract with duration of at least 03 months and is working for the salary payer in reality when the tax is finalized by the salary payer, even if the salary earner has not worked for full 12 months in the year. In case the salary earner is reassigned to a new organization as prescribed in Point d.1 of this Clause, he/she may authorize the new organization to finalize tax.
The salary earner has an employment contract with a duration of at least 03 months and is working for the salary payer in reality when tax is finalized by the salary payer, even if the salary earner has not worked for full 12 months in the year, and earns an average monthly irregular income not exceeding 10 million VND which on which 10% personal income tax has been deducted and does not wish to have this income included in the tax finalization dossier."
Pursuant to the above provisions, in case the salary earner has an employment contract with a duration of at least 03 months and is working for the salary payer in reality when tax is finalized by the salary payer, even if the salary earner has not worked for full 12 months in the year, and earns an average monthly irregular income not exceeding 10 million VND which on which 10% personal income tax has been deducted and does not wish to have this income included in the tax finalization dossier, he/she may authorize the new organization to finalize tax according to the provisions of Clause 6, Article 8 of Decree 126/2000/ND-CP dated October 19, 2020 of the Government.
In which case a resident salary earner who has other irregular income can authorize the salary payer to finalize tax?
How does a resident salary earner declare and finalize personal income tax?
Pursuant to Clause 6, Article 8 of Decree 126/2020/ND-CP stipulates as follows:
- A resident salary earner shall directly submit the personal income tax finalization dossier to the tax authority in the following cases:
Tax is underpaid or overpaid and the individual claims a refund or has it carried forward to the next period, unless: the tax arrears is not exceeding 50.000 VND; the amount of tax payable is smaller than the amount provisionally paid but the individual does not claim a refund or does not have it carried forward to the next period; the individual has an employment contract with a duration of at least 03 months and earns an average monthly irregular income not exceeding 10 million VND which on which personal income tax has been deducted at 10% and does not wish to have this income included in the tax finalization dossier; the individual’s life insurance (except voluntary retirement insurance) or any other voluntary insurance with insurance premium accumulation is purchased by the individual’s employee and 10% personal income tax on the part purchased or contributed by the taxpayer.
The individual has been present in Vietnam for fewer than 183 days in the first calendar year but more than 183 days in 12 consecutive months from the arrival date.
An individual that is a foreigner whose employment contract in Vietnam has ended shall submit a tax finalization dossier to the tax authority before exit or authorize the income payer or another organization or individual to prepare and submit the tax finalization dossier as per regulations. The income payer or the authorized organization/individual must pay tax arrears if tax is underpaid or will receive a refund in case tax is overpaid.
Resident salary earners who are eligible for tax reduction due to a natural disaster, fire, accident or serious illness shall finalize tax themselves instead of authorizing income payers to perform this task.
Where to submit tax declaration dossiers for resident salary earners?
According to Clause 8, Article 11 of Decree 126/2020/ND-CP stipulates as follows:
Salary earners shall submit tax declaration dossiers at the locations specified in Point d Clause 4 Article 45 of the Law on Tax administration. To be specific:
- The following individuals shall declare tax monthly or quarterly in accordance with Clause 1 Article 8 and Article of this Decree:
+ Resident individuals who earn salaries in Vietnam and have not had personal income tax deducted shall submit tax declaration dossiers to supervisory tax authorities of the salary payers.
+ Resident individuals whose salaries are paid overseas shall submit tax declaration dossiers to supervisory tax authorities of the areas where they work. In case their working locations are not in Vietnam, tax declaration dossiers shall be submitted to the tax authorities of the areas where they reside.
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