When will employees be entitled to PIT refund in Vietnam? Will the employer or tax agency be responsible for directly refunding personal income tax to employees?
When will employees be entitled to PIT refund in Vietnam?
Pursuant to Clause 2, Article 8 of the Law on personal income tax 2007, individuals are entitled to tax refund in the following cases:
Tax administration and tax refund
1. Tax registration, declaration, withholding, payment, finalization and refund, handling of violations of the tax law, and tax administration measures comply with legal provisions on tax administration.
2. Individuals are entitled to tax refund in the following cases:
a/ Their paid tax amounts are larger than payable tax amounts;
b/ They have paid tax but their taxed incomes do not reach a tax-liable level;
c/ Other cases decided by competent state agencies.
Thus, employees are entitled to PIT refund in the following cases:
- Their paid tax amounts are larger than payable tax amounts;
- They have paid tax but their taxed incomes do not reach a tax-liable level;
- Other cases decided by competent state agencies.
When will employees be entitled to PIT refund in Vietnam? Will the employer or tax agency be responsible for directly refunding personal income tax to employees?
Vietnam: Will the employer or tax agency be responsible for directly refunding personal income tax to employees?
Pursuant to Article 28 of Circular 111/2013/TT-BTC regulations on personal income tax refund as follows:
Tax refund
1. The refund of personal income tax applies to the persons that have registered and obtain tax codes when they submit the tax settlement form.
2. If the person that has delegated the income payer to settle tax, tax refund shall be made via the income payer. The income payer shall offset the overpaid and underpaid tax. After offsetting, the overpaid tax shall be offset against the tax in the next period or refunded on request.
3. The person that declares tax directly may choose to claim a tax refund or offset it against the tax in the next period at the same tax authority.
4. Person eligible for the refund of personal income tax that submits the tax settlement behind schedule is exempt from fines for overdue tax statement.
Based on the regulations, in case an employee receives a personal income tax refund, the tax refund is determined as follows:
- The refund of personal income tax applies to the persons that have registered and obtain tax codes when they submit the tax settlement form.
If the person that has delegated the income payer to settle tax, tax refund shall be made via the income payer. The income payer shall offset the overpaid and underpaid tax. After offsetting, the overpaid tax shall be offset against the tax in the next period or refunded on request..
- The person that declares tax directly may choose to claim a tax refund or offset it against the tax in the next period at the same tax authority
How to submit PIT refund claims in Vietnam?
Pursuant to Clause 2, Article 72 of the Law on Tax Administration 2019 stipulates as follows:
Receipt and processing of tax refund claims
1. Tax authorities shall process tax refund claims as follows:
a) Supervisory tax authorities of taxpayers shall receive tax refund claims in accordance with tax laws. Collecting tax authorities shall receive claims for refund of overpaid amounts. In case of refund of overpaid amounts under an annual/terminal statement of corporate income tax or personal income tax, the tax authority that received the statement shall provide the refund.
b) Collecting customs authorities shall receive tax refund claims in accordance with tax laws. Customs authorities where exit procedures are followed shall receive tax refund claims submitted by foreigners and Vietnamese people residing overseas.
2. Tax refund claims may be submitted:
a) in person at tax authorities;
b) by post;
c) electronically through online portals or tax authorities.
3. Within 03 working days from the day on which the claim is received, the tax authority shall inform the taxpayer in writing of whether the claim is granted or rejected.
4. The Minister of Finance shall elaborate this Article.
Thus, PIT refund claims may be submitted:
- in person at tax authorities;
- by post;
- electronically through online portals or tax authorities.
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