Notable regulations on PIT declaration in Vietnam under Decree 126

Notable regulations on PIT declaration under Decree 126 (Illustration)

1. Organizations and individuals can choose to declare PIT on a monthly or quarterly basis in Vietnam

Clause 1, Article 8 of Vietnam's Decree 126/2020/ND-CP recognizes PIT as a monthly tax. However, if the taxpayer meets the criteria specified in Article 9 of this Decree, he/she may choose to declare quarterly.

Previously, in Clause 3, Article 21 of Vietnam's Circular 92/2015/TT-BTC stipulating: Residents earning incomes from wages shall declare tax directly every quarter and make annual tax statements.

If making quarterly financial statements, organizations and individuals must satisfy the following conditions:

- A taxpayer who has to declare personal income tax monthly as prescribed in Point a Clause 1 Article 8 of this Decree may declare personal income tax quarterly if all requirements for quarterly declaration are fulfilled.

- Quarterly declaration shall be applied from the first month in which tax is incurred and remain unchanged throughout the calendar year.

2. Extend deadline for submitting tax registration documents when changing informations on ID card

This provision is recorded in Clause 2, Article 6 of Decree 126 as follows:

In case of changes to information about the ID card or passport of a taxpayer that is an individual, the changes will be applied within 20 days (30 days for mountainous, bordering areas and islands) from the date written on the ID card or passport.

Compared to before, the Law on Tax Administration 2019 only allows taxpayers, when there is a change in tax registration information, to notify the tax authority directly managing them within 10 working days from the date on which the changed information arises.

Thus, the deadline for submitting tax registration documents when information changes has been increased by 10 days.

3. Tax declaration is required even without being subject to PIT 

In this regard, point a.1 clause 1 Article 16 of Vietnam's Circular 156/2013/TT-BTC previously stipulates that the income payer is not required to declare tax if no personal income tax is deducted in the month or quarter. However, among the cases that do not have to submit tax declaration dossiers listed in Clause 3, Article 7 of Decree 126, there is no mention of organizations and individuals paying income that do not incur PIT withholding.

Therefore, individuals with incomes from salaries and wages below the family deduction level (11 million VND/month) do not have to pay personal income tax, but income-paying organizations and individuals still have to make tax declarations.

4. Deadlines for submission of tax declaration

- Deadlines for submission of tax declaration dossiers of taxes declared monthly and quarterly:

• For taxes declared monthly: the 20th of the month succeeding the month in which tax is incurred;

• For taxes declared quarterly: the last day of the first month of the succeeding quarter.

- For taxes declared annually:

• For annual tax statement dossiers: the last day of the 3rd month from the end of the calendar year or fiscal year. For annual tax declaration dossiers: the last day of the first month from the end of the calendar year or fiscal year;

• For annual personal income tax statements prepared by income earners: the last day of the 4th month from the end of the calendar year;

• For presumptive tax declarations prepared by household businesses and individual businesses: the 15th of December of the preceding year. For new household businesses and individual businesses: within 10 days from the date of commencement of the business.

- For declaration of taxes that are declared and paid upon incurrence: the 10th day from the day on which tax is incurred.

(According to Article 44 of Vietnam's Law on Tax Administration 2019).

Le Thanh

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