Are cases of personal income tax finalization authorization eligible to be issued certificate of tax withheld in Vietnam?

Are cases of personal income tax finalization authorization eligible to be issued certificate of tax withheld in Vietnam? (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Are cases of personal income tax finalization authorization eligible to be issued certificate of tax withheld in Vietnam?

According to Clause 2, Article 25 of Circular 111/2013/TT-BTC, there are regulations on the issuance of certificate of tax withheld at source

- After withholding tax as guided in Clause 1 of this Article, the income payer shall issue certificates of tax withheld at source at the request of the persons that have tax withheld from their incomes. The certificate of tax withheld at source shall not be issued if the person delegates the tax settlement.

+ Issuance of certificates of tax withheld at source in some particular cases:

++ If the person does not sign a labor contract or signs a labor contract for less than 03 months, the person is entitled to request the income payer to issue the certificate of tax withheld at source every time tax is withheld, or issue a single certificate of tax withheld at source for multiple withholdings in the same tax period.

+ If the person signs a labor contract for more than 03 months, the income payer shall issue only one certificate of tax withheld at source in a tax period.

Thus, according to the above regulations, individuals who authorize tax finalization will not issue deduction documents.

2. If an individual has authorized tax finalization, how is personal income tax refunded?

According to Article 28 of Circular 111/2013/TT-BTC, there are regulations on tax refund as follows:

-  The refund of personal income tax applies to the persons that have registered and obtain tax codes when they submit the tax settlement form.

- If the person has delegated the income payer to settle tax, tax refund shall be made via the income payer. The income payer shall offset the overpaid and underpaid tax. After offsetting, the overpaid tax shall be offset against the tax in the next period or refunded on request.

- The person that declares tax directly may choose to claim a tax refund or offset it against the tax in the next period at the same tax authority.

- Person eligible for the refund of personal income tax that submits the tax settlement behind schedule is exempt from fines for overdue tax statement.

Thus, If the person has delegated the income payer to settle tax, tax refund shall be made via the income payer. The income payer shall offset the overpaid and underpaid tax. After offsetting, the overpaid tax shall be offset against the tax in the next period or refunded on request.

3. When is the time of preparing personal income tax deduction documents in Vietnam?

Pursuant to Article 31 of Decree 123/2020/ND-CP, the time to prepare personal income tax deduction documents in Vietnam is as follows:

When deducting personal income tax (PIT) or collecting taxes, fees or charges, organizations deducting PIT or collectors of taxes, fees or charges (hereinafter referred to as “collector”) shall prepare and give PIT deduction statements or receipts to persons whose income is deducted or payers of taxes, fees or charges (hereinafter referred to as “payer”).

Thus, personal income tax deduction documents must be delivered to the person whose income is subject to tax deduction. The time to issue personal income tax deduction documents is when the individual requests that they be sent to the organization or individual that pays his or her income.

Nguyen Ngoc Que Anh

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