Guidance on Personal Income Tax Refunds for Organizations and Individuals Paying Income and Settling Tax Finalization for Individuals Authorized to Finalize Tax
What are the conditions for employees to authorize their employers to finalize Personal Income Tax (PIT)?
According to the regulations in Point d, Clause 6, Article 8 of Decree 126/2020/ND-CP regarding the authorization for enterprises to finalize PIT for employees, the specific conditions are:
- Resident individuals with income from salaries or wages can authorize their employers to finalize their PIT in the following cases:
- Individuals with income from salaries or wages who have signed labor contracts of 03 months or more at one place and are actually working there at the time the income-paying organization or individual finalizes the tax, even if they have not worked for the full 12 months of the calendar year.
In cases where individuals are transferred from the old organization to a new one due to the old organization’s merger, consolidation, division, separation, change of business type, or if both the old and new organizations are part of the same system, individuals can authorize the new organization to finalize their tax.
- Individuals with income from salaries or wages who have signed labor contracts of 03 months or more at one place and are actually working there at the time the income-paying organization or individual finalizes the tax, even if they have not worked for the full 12 months of the calendar year; concurrently having incidental income in other places averaging not more than 10 million VND per month and having had PIT withheld at the rate of 10% without requesting tax finalization for this income portion.
- Foreign individuals who terminate their working contracts in Vietnam must finalize their taxes with the tax authority before leaving the country.
If the individual has not completed the tax finalization procedures with the tax authority, they shall authorize the income-paying organization or individual or another organization or individual to finalize the tax as regulated.
In cases where the income-paying organization or another organization or individual receives the authorization for tax finalization, they shall be responsible for any additional PIT payable or for the refund of excess tax paid by the individual.
Guidelines for PIT refund with income-paying organizations finalizing the tax for individuals who have authorized the tax finalization?
What documents are required for a PIT refund with income-paying organizations finalizing the tax for individuals who have authorized the tax finalization?
According to the guidelines in Sub-item 89, Item II of the Administrative Procedures issued along with Decision 1462/QD-BTC in 2022, the documents required for a PIT refund with income-paying organizations finalizing the tax for individuals who have authorized the tax finalization include:
For dossiers subject to pre-refund inspection: No later than 40 days from the date the tax management agency issues a written notification of acceptance of the dossier and the time limit for processing the tax refund dossier.
- Authorization letter in accordance with the law in case the taxpayer does not directly perform the tax refund procedure, except for the case where a tax agency submits the tax refund dossier according to the signed contract between the tax agency and the taxpayer;
- Tax payment voucher list, Form No. 02-1/HT according to Appendix II - Tax declaration dossier form issued together with Circular 80/2021/TT-BTC on September 29, 2021, by the Ministry of Finance.
Procedure for PIT refund with income-paying organizations finalizing the tax for individuals who have authorized the tax finalization?
According to Sub-item 89, Item II of the Administrative Procedures issued along with Decision 1462/QD-BTC in 2022, the procedure for PIT refund with income-paying organizations finalizing the tax for individuals who have authorized the tax finalization is as follows:
Step 1: The income-paying organization or individual finalizes the tax for the individuals who have authorized the tax finalization after offsetting the overpaid and underpaid taxes of individuals who have overpaid taxes. If a refund is requested from the tax authority, the income-paying organization or individual shall prepare the tax refund dossier.
Step 2:
- In case the dossier is submitted directly at the tax authority or sent via postal service: the tax authority shall receive and process the dossier as regulated.
- In case the dossier is submitted through electronic transactions, the receipt, inspection, acceptance, and processing of the dossier (and returning the result if there is a result) shall be conducted through the tax authority’s electronic data processing system.
When is the processing time for the PIT refund with income-paying organizations finalizing the tax for individuals who have authorized the tax finalization?
According to the guidelines in Sub-item 89, Item II of the Administrative Procedures issued along with Decision 1462/QD-BTC in 2022, the processing time for the PIT refund with income-paying organizations finalizing the tax for individuals who have authorized the tax finalization corresponds to each case as follows:
+ For dossiers subject to pre-refund: No later than 06 working days from the date the tax management agency issues a written notification of acceptance of the dossier and the time limit for processing the tax refund dossier.
+ For dossiers subject to pre-refund inspection: No later than 40 days from the date the tax management agency issues a written notification of acceptance of the dossier and the time limit for processing the tax refund dossier.
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