Frequently Asked Questions about Personal Income Tax Finalization

According to regulations, taxpayers who are required to finalize Personal Income Tax (PIT) have the responsibility to file PIT finalization within 90 days from the end of the calendar year. Thus, by the end of the first quarter of 2017 (i.e., March 31, 2017), taxpayers must complete the PIT finalization. However, during the finalization process, there are inevitable inquiries. Below are some frequently asked questions:

1. If an employee works at both places (A and B), where should they submit the PIT finalization declaration?

   The employee will submit the PIT finalization records at the place where the family circumstance deduction for the employee is calculated.

2. How many dependents can a taxpayer register?

   According to the guidance in Circular 111/2013/TT-BTC, there is no limit to the number of dependents a person can register as long as they meet the eligibility conditions for dependents as stipulated.

   However, each dependent can only be deducted once for one taxpayer. If multiple taxpayers share the responsibility of supporting a dependent, they must negotiate to register the family circumstance deduction under one taxpayer.

1. Why is PIT recalculated at the end of the year despite monthly deductions?

   The purpose of the year-end tax finalization is to determine the amount of tax to be refunded or additionally paid.

   Although tax is deducted monthly, end-of-year recalculations help to correct any mistakes made during monthly deductions, and account for variations in the monthly income of the employee (such as salary increases or bonuses). The tax finalization period is to compute the average. For entities that deduct taxes correctly each month, there may be no further deductions at year-end. However, for individuals with income from multiple sources, the tax must be reconsidered.

   If tax has been deducted monthly, possibly no additional payment is needed at the end of the year, and a refund might be due. For those with irregular income that, when summed up annually, falls into a higher progressive tax bracket of 5-10% more than monthly withholdings, additional tax payment is required.

2. What happens to tax finalization procedures if an employee transfers jobs?

   If an employee transfers within the same unit, they can authorize the new unit to handle it. But, if working in two different units, the employee must self-finalize the tax.

3. What are the consequences if a taxpayer delays tax finalization?

   If a taxpayer delays finalization for a refund, there is no penalty. However, if delayed and it results in additional tax payable, administrative penalties will apply. Refer to: Penalty for Late PIT Finalization?

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE