In case an individual earns salaries/wages in 02 locations in Vietnam, can he/she authorize others to finalize PIT?

In case an individual earns salaries/wages in 02 locations in Vietnam, can he/she authorize others to finalize PIT?

Pursuant to Subsection 2, Section 3, Official Dispatch 5749/CT-TNCN of 2018, guiding cases in which PIT finalization is not allowed as follows:

Authorization for tax finalization

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2. Individuals are not authorized to make settlement payments to income payers

- An individual who meets the authorization conditions specified in Point 1 above but has been issued a PIT deduction document by an income payer shall not authorize tax finalization to an income payer (except in the case that an income payer has revoked and canceled the tax deduction documents issued to the individual).

- Individuals with income from salaries or wages sign a labor contract of 3 months or more at a unit but at the time of tax finalization authorization do not work at that organization.

Individuals with income from salaries or wages who sign a labor contract of at least 3 months at a unit, and at the same time have current income with no tax deduction or insufficient tax deduction (including cases where the deduction level has not yet been reached and the deduction level has been reached but no deduction is made).

- Individuals with income from salaries or wages sign labor contracts of at least 3 months in more than one location.

- Individuals with only current income have tax deducted at a rate of 10% (including cases with only current income in one place).

- Individuals who have not registered a tax code

- Residents with income from salaries and wages who are also considered for tax reduction due to natural disasters, fires, accidents, or serious diseases do not authorize tax finalization, but individuals must declare tax finalization themselves along with tax reduction consideration documents according to the instructions in Clause 1, Article 46 of Circular No. 156/2013/TT-BTC dated November 6, 2013 of the Ministry of Finance.

Thus, in case an individual has income from salary or wages and signs a labor contract of at least 3 months in more than one location, he or she is not allowed to authorize PIT finalization to the income payer.

In case an individual earns salaries/wages in 02 locations in Vietnam, can he/she authorize others to finalize personal income tax? (Image from the Internet)

In case an individual earns salaries/wages in 02 locations in Vietnam, can he/she authorize others to finalize PIT? (Image from the Internet)

If an individual does not authorize PIT finalization, will he/she receive a deduction based on family circumstances in Vietnam?

Pursuant to Point c, Clause 1, Article 9 of Circular 111/2013/TT-BTC amended by Clause 6, Article 25 of Circular 92/2015/TT-BTC regulating family deductions:

Deductions

The deductions guided in this Article are the amounts deducted from the taxable income of the person before calculating taxable income from wages, remunerations, and business. In particular:

1. Personal deductions

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c) Calculating deduction

c.1) Personal deduction for the taxpayer:

c.1.1) The taxpayer that has multiple sources of income from wages and business shall calculate the personal deduction for himself in a place at a time (considered a full month).

c.1.2) The foreigner being a resident in Vietnam shall make personal deduction from January (or the month of arrival if the person comes to Vietnam for the first time) until the month in which the labor contract expires and that person leaves Vietnam in the tax year (considered a full month).

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c.1.3) If the person has not made personal deduction or the deduction does not cover 12 months in the tax year, the person may make deduction for 12 months before settling tax.

c.2) Deduction for dependants

c.2.1) The taxpayer may make deductions for his or her dependants if the taxpayer has applied for tax registration and been issued with the tax code.

c.2.2) When registering deductions for dependants, the taxpayer shall be issued with tax codes for dependants and make preliminary deductions in the year from the registration date. The dependants that are registered before this Circular takes effect are still eligible for deductions until being issued with tax codes.

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Thus, the axpayer is entitled to deductions based on family circumstances when he has multiple sources of income from wages and business in Vietnam. Then the taxpayer chooses to calculate personal deduction for himself in a place at a time.

In principle in Vietnam, the taxpayer may make deductions for his or her dependants if the taxpayer has applied for tax registration and been issued with the tax code, regardless of whether tax finalization is authorized or not.

Therefore, in case the taxpayer does not authorize PIT finalization, he or she will still receive deduction in Vietnam.

Who must directly finalize PIT with the tax authority in Vietnam?

At Section 1.1 of Official Dispatch 9188/CTHN-HKDCN of 2022, the subjects who must directly finalize PIT with the tax authority are individuals with taxable income from salaries and wages are:

- Residents with income from salaries or wages have an additional tax amount to pay, except for cases where the additional tax amount payable after tax finalization each year is 50,000 VND or less.

- Residents with overpaid tax amounts need to request a refund or offset in the next tax declaration period.

- Residents with income from salaries and wages are also considered for tax reduction due to natural disasters, fires, accidents, and serious diseases.

- Residents who are foreigners and end their working contract in Vietnam must declare tax finalization with the tax authority before leaving the country.

Note: Individuals who are present in Vietnam for less than 183 days in the first calendar year, but if calculation for 12 consecutive months from the first day of presence in Vietnam is 183 days or more, the first settlement year will be 12 consecutive months from the first date of presence in Vietnam.

Best regards!