Vietnam: In case an enterprise pays a salary to an employee who has paid PIT under the distribution method, is it required to re-determine the payable PIT amount upon finalization?
- In what case will the distribution method be applied when paying PIT on income from salaries and remunerations in Vietnam?
- In case an enterprise in Vietnam pays a salary to an employee who has paid PIT under the distribution method, is it required to re-determine the payable PIT amount upon finalization?
- What are the regulations on the distribution of PIT on income from salaries and remunerations in Vietnam?
In what case will the distribution method be applied when paying PIT on income from salaries and remunerations in Vietnam?
Pursuant to Clause 1, Article 19 of Circular 80/2021/TT-BTC as follows:
Declaring, calculating, distributing, and paying personal income tax (PIT)
1. Distribution methods:
a) Deduction of PIT on income from salaries and remunerations paid at the headquarters to employees working at dependent units or business locations in other provinces.
b) Deduction of PIT on individuals' income from computerized lottery prizes.
Thus, the distribution method shall be applied upon the deduction of PIT on income from salaries and remunerations paid at the headquarters to employees working at dependent units or business locations in other provinces.
In case an enterprise in Vietnam pays a salary to an employee who has paid PIT under the distribution method, is it required to re-determine the payable PIT amount upon finalization?
Pursuant to Point a, Clause 3, Article 19 of Circular 80/2021/TT-BTC as follows:
Declaring, calculating, distributing, and paying personal income tax (PIT)
...
3. Declaring and paying tax:
a) PIT on income from salaries and remunerations:
a.1) The taxpayer that pays salaries and remunerations to employees who work at dependent units and business locations in provinces other than the province where the taxpayer is headquartered shall deduct PIT from salaries and remunerations, submit tax declaration dossiers according to Form No. 05/KK-TNCN, the PIT distribution sheet according to Form No. 05-1/PBT-KK-TNCN in Appendix II hereof to the supervisory tax authority; pay PIT in the provinces where the employees work in accordance with Clause 4 Article 12 of this Circular. PIT payable in each province shall be determined monthly or quarterly and shall not be adjusted during PIT finalization.
At the same time, referring to the content in Official Dispatch 6097/CTHN-TTHT in 2023, issued by the Hanoi Tax Department, when enterprises pay salaries and remunerations to employees eligible for distributing incomes from salaries and remunerations as guided in Clause 1, Article 19 of Circular 80/2021/TT-BTC and have paid PIT on incomes from salaries and remunerations into the state budget for each province where employees work, the payable PIT amount monthly or quarterly determined for each province shall correspond to the PIT declaration period and they are not required to re-determine the payable PIT amount upon finalization as prescribed at point a, clause 3, Article 19 of Circular 80/2021/TT-BTC of the Ministry of Finance.
What are the regulations on the distribution of PIT on income from salaries and remunerations in Vietnam?
Pursuant to Clause 1, Article 19 of Circular 80/2021/TT-BTC as follows:
Declaring, calculating, distributing, and paying personal income tax (PIT)
...
2. Distribution methods:
a) Distribution of PIT on income from salaries and remunerations:
The taxpayer shall determine the PIT on salaries and remunerations of individuals working in each province according to the PIT deducted in reality from the income of each individual. In case an employee is reassigned or seconded, PIT shall be paid in the province in which the employee is working at the time of income payment.
b) Distribution of PIT on individuals' income from computerized lottery prizes:
The taxpayer shall determine the PIT on income from computerized lottery prizes earned by the individual in each province where the individual participates by phone or internet and where computerized lottery tickets are issued via terminal devices according to the PIT deducted in reality.
Thus, the distribution of PIT on income from salaries and remunerations in Vietnam shall be conducted as follows:
The taxpayer shall determine the PIT on salaries and remunerations of individuals working in each province according to the PIT deducted in reality from the income of each individual.
In case an employee is reassigned or seconded, PIT shall be paid in the province in which the employee is working at the time of income payment.
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