08:20, 11/07/2024
To address issues arising during the personal income tax (PIT) finalization process, An Giang Provincial Tax Department has issued Official Dispatch 242/CT-TNCN to units responsible for personal income tax finalization, providing guidance on submitting the 2016 personal income tax finalization declaration in Vietnam. Below are some noteworthy points.
Article table of contents
| No. | Issue | Explanation |
|---|---|---|
| 1 | Cases where tax finalization is not required | - Organizations and individuals that do not incur income payment are not required to finalize personal income tax; - Organizations and individuals making income payments that dissolve, cease operations, incur income payments but do not incur PIT withholding, do not implement PIT finalization; - Organizations making income payments that convert the type of enterprise (EN) where the receiver inherits all tax obligations of the previous enterprise do not have to declare PIT finalization up to the point of decision on enterprise conversion, while the receiver must still declare annual tax finalization as per regulations. |
| 2 | Cases where tax finalization declaration is not required | According to the guidance in Clause 4, Article 25 of Circular 92/2015/TT-BTC, organizations and individuals with income payments for the following types of income do not submit annual tax finalization declarations: + Income from capital investment, from securities transfer, from copyright, from franchise, from winning prizes of resident and non-resident individuals; from business activities of non-resident individuals; Organizations, individuals receiving capital transfer from non-resident individuals. + Insurance enterprises paying income to insurance agents, income from life insurance accumulation fees; voluntary pension fund management companies; Multilevel marketing enterprises withholding PIT on income of individuals participating in multilevel marketing networks. + Lottery companies paying income to lottery agents. |
| 3 | Cases of authorizing tax finalization | Individuals with income from salaries and wages authorize organizations and individuals making income payments to finalize on their behalf in the following cases: + Individuals with income from salaries and wages signing labor contracts for 03 months at an organization, individual making income payments and actually working there at the authorization time, even if they do not work for the full 12 months in a year. + Individuals with income from salaries and wages signing labor contracts for 03 months or more at an organization, individual making income payments and actually working there at the authorization time, even if they do not work for the full 12 months in a year, and concurrently having casual income at other places averaging not more than 10 million VND per month already withheld 10% tax without request for tax finalization on this income. + Individuals transferred from the old organization to the new organization in cases of company separation, splitting, merging, consolidating, or changing types of enterprises. At year-end, if employees authorize finalization, the new organization must collect the PIT withholding certificates issued by the old organization (if any) to serve as a basis for summarizing income, tax withheld, and finalizing on behalf of employees. + Organizations and individuals making income payments only finalize taxes on behalf of individuals for the income from salaries and wages received from the organization, individual making income payments. For organizations making payments after separation, splitting, merging, consolidating, or changing types of enterprises and finalizing taxes as authorized by employees transferred from the old organization, the new organization is responsible for finalizing taxes for the income paid by both the old and new organizations. + Individuals authorizing organizations and individuals making income payments to finalize on their behalf using Form No. 02/UQ-QTT-TNCN (Circular 92/2015/TT-BTC) + Copies of invoices, receipts proving charitable, humanitarian, study promotion contributions (if any). |
| 4 | Cases where authorization for tax finalization is not granted | - Individuals eligible for authorizing organizations and individuals making income payments to finalize taxes but have been issued PIT withholding certificates by the organization, individual making income payments, then do not authorize tax finalization (unless the organization, individual making income payments has retrieved and annulled the issued PIT withholding certificates). - Individuals with income from salaries and wages not eligible for authorizing organizations and individuals making income payments to finalize taxes but required to finalize PIT themselves must directly finalize with the tax authority for all income incurred during the year, specifically in some cases where tax finalization authorization is not given: + Individuals with casual income withheld at 10% (even if there is only one place of casual income) do not authorize tax finalization. + Individuals with income from salaries and wages signing labor contracts for 03 months or more at one entity, concurrently having casual income not withheld tax (whether not at taxable level or at taxable level but not withheld) do not authorize tax finalization. |
| 5 | Adjustment after authorizing tax finalization | After individuals authorize organizations and individuals making income payments to finalize taxes on their behalf, if it is discovered that the individual should directly finalize with the tax authority, the organization, individual making income payments will not re-adjust the PIT finalization, only issue PIT withholding certificates according to the finalization numbers and note at the lower left corner of the tax withholding certificate: “Company... has finalized PIT on behalf of Mr./Ms.... (according to authorization) at line (serial number)... of Attachment Schedule 05-1/BK-QTT-TNCN” for the individual to directly finalize with the tax authority. |
| 6 | Current tax finalization forms | The annual PIT finalization forms are implemented according to tax declaration support software version 3.4.1. |
| 7 | Location for submitting tax finalization dossiers | Organizations and individuals making income payments submit tax finalization dossiers at the tax authority directly managing the organization, individual. |
| 8 | Deadline for submitting tax finalization dossiers | The deadline for submitting PIT finalization declaration dossiers is no later than the 90th day from the end of the calendar year (i.e., March 31, 2017). |
| 9 | Deadline for paying tax | No later than the last day of the deadline for submitting the tax finalization declaration dossier. |
More details can be found in Official Dispatch 242/CT-TNCN.
