Who must finalize PIT? Who is not required to finalize PIT?

The General Department of Taxation has just issued Official Letter 883/TCT-DNNCN guiding the finalization of personal income tax (PIT). Accordingly, the guidelines for entities subject to PIT finalization and entities not required to finalize PIT are as follows:

Who must finalize PIT?  Who is not required to finalize PIT?

Who must finalize PIT? Who is not required to finalize PIT? (Illustration)

1. Subjects subject to PIT finalization

1.1 For individuals who directly settle with tax authorities

- Residents who earn incomes from salaries or wages from two or more places but do not meet the conditions for authorization to finalize, must directly declare PIT finalization with tax authorities if there is additional tax to be paid. or have an overpaid tax amount to be refunded or offset in the next tax return period.

- Individuals present in Vietnam for less than 183 days in the first calendar year, but counting in 12 consecutive months from the first day of presence in Vietnam for 183 days or more, the first settlement year is 12 consecutive months from the first day of presence in Vietnam.

- Individuals who are foreigners ending their working contracts in Vietnam shall make tax finalization declarations with tax authorities before leaving the country.

If the tax declaration and finalization procedures have not been completed, authorize the income paying organization or other organizations and individuals to finalize tax according to regulations on tax finalization for individuals. In case the income paying organization or other organizations or individuals receive authorization for finalization, they must be responsible for the additional PIT payable or have their overpaid tax refunded.

- Resident individuals earning incomes from salaries and wages paid from abroad and resident individuals earning incomes from salaries and wages paid from international organizations, Embassies, and Consulates not yet Withholding tax in the year, individuals must settle directly with the tax authorities, if there is additional tax payable or overpaid tax amount, request for refund or offset in the next tax period.

- Residents who earn incomes from salaries and wages and are considered for tax reduction due to natural disasters, fires, or fatal diseases affecting their ability to pay tax, shall not authorize organizations or individuals to pay such income. enter the tax finalization instead, but must directly declare the final settlement with the tax agency according to regulations.

1.2 For organizations and individuals paying incomes from salaries and wages

- Organizations and individuals that pay incomes from salaries and wages are responsible for PIT finalization, regardless of whether tax withholding or not, and PIT finalization on behalf of authorized individuals. permission.

In case an individual authorizes an organization to finalize personal income tax and has an additional tax payable after settlement of VND 50,000 or less and is eligible for tax exemption, the income paying organization or individual may still declare personal information. pay such income in the personal income tax finalization declaration of the organization and do not aggregate the additional payable tax amount of individuals whose additional tax payable after finalization is 50,000 VND or less.

In case the income paying organization has finalized PIT before December 5, 2020, it will not be processed retroactively.

- In case an individual is an employee who is transferred from the old organization to the new one because the old organization merges, merges, divides, separates, transforms the type of enterprise or the old organization and the new one. In the same system, the new organization is responsible for finalizing PIT as authorized by the individual for both the income paid by the old organization and the new income paying organization to collect the PIT withholding documents due to the individual's authorization. the organization paying the old income already granted to the employee (if any).

- In case an organization or individual paying income dissolves, goes bankrupt, terminates operations, terminates contracts or reorganizes an enterprise, it must make a PIT finalization up to the time of dissolution, bankruptcy or termination. operation, contract termination or enterprise reorganization.

In case of conversion of the type of enterprise (excluding equitized state-owned enterprises) and the transformed enterprise inherits all tax obligations of the converted enterprise, it is not required to finalize PIT until the date of issuance. decide on enterprise transformation, the enterprise shall declare the final settlement at the end of the year.

1.3 For authorization for PIT finalization

Residents earning incomes from salaries and wages authorize PIT finalization for income-paying organizations and individuals, specifically as follows:

- Individuals earning incomes from salaries and wages sign labor contracts of 03 months or more at a place and are actually working there at the time the income-paying organization or individual performs the tax finalization. , including the case of not working for full 12 months in a calendar year.

In case an individual is an employee who is transferred from the old organization to the new one because the old organization merges, merges, divides, separates, transforms the type of enterprise or the old organization and the new organization in the In the same system, the individual is authorized to finalize the tax for the new organization.

- Individuals earning incomes from salaries and wages sign labor contracts for 03 months or more at a place and are actually working there at the time the organization or individual pays income tax finalization, including case of not working for full 12 months in a calendar year; and at the same time have current income elsewhere in the year on average not more than 10 million VND and have been withheld PIT at the rate of 10% if there is no requirement for tax finalization on this income.

Note : After the individual has authorized the tax finalization, the income paying organization has made the tax finalization on behalf of the individual, if detecting that the individual is directly subject to tax finalization with the tax agency, the organization shall income without adjusting the PIT finalization of the income paying organization, only issue tax deduction vouchers to individuals according to the finalization book and write in the lower left corner of the tax withholding voucher the following content:

“Company... has settled PIT on behalf of Mr/Ms... (by authorization) in line (ordinal number)... of Appendix List 05-1/BK-TNCN" for personal use. directly settle tax with tax authorities.

In case income-paying organizations and individuals use electronic PIT withholding vouchers, they shall print and convert from the original electronic PIT withholding documents and write the above-mentioned contents in the converted printed copies to provide to taxpayers. taxpayer.

2. Subjects not required to finalize personal income tax

2.1 For individuals

Individuals earning incomes from salaries and wages in the following cases are not required to finalize PIT:

- Individuals whose personal income tax amount to pay more after the final settlement of each year is 50,000 VND or less.

Tax-exempt individuals in this case determine the exempted tax amounts themselves, are not required to submit PIT finalization documents and are not required to submit tax exemption documents. In case the settlement period from 2019 and earlier has been settled before December 5, 2020, it will not be processed retroactively;

- Individuals whose payable PIT amount is smaller than the temporarily paid tax amount without requesting tax refund or clearing in the next tax return period;

- Individuals earning incomes from salaries and wages, sign labor contracts for 3 months or more at a unit, and at the same time have an average monthly income of not more than VND 10 million in other places in the year, and have may withhold PIT at the rate of 10%, if there is no request, no tax finalization is required for this income;

- Individuals whose employer buys life insurance (except voluntary retirement insurance), other optional insurance with accumulated premiums that the employer or insurance enterprise has deducted. except for PIT at the rate of 10% on the insurance premium amount corresponding to the part purchased or contributed by the employer to the employee, the employee is not required to finalize PIT on this income.

2.2 For organizations and individuals paying income from salaries and wages

Organizations and individuals that pay incomes from salaries and wages that are not required to finalize PIT include:

- Organizations and individuals do not generate income during the year;

- Income-paying organizations and individuals temporarily stop operating and doing business for the whole calendar year.

Official Letter 883/TCT-DNNCN was issued on 24/3/2022.

Jewel

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