Dossiers and procedures for a personal income tax refund for foreigners. Below are the regulations on individual income tax refunds for foreigners. Let us learn about this topic with LSX law firm as follow:
Conditions for a personal income tax refund for foreigners
Foreigners working in Vietnam have personal income tax obligations, classified into 2 types: resident individuals and non-resident individuals. In case a foreigner is a resident individual, according to the provisions of the law on personal income tax; the tax calculation, tax calculation method, payable tax amount, tax finalization; or personal income tax refund shall be applied accordingly. Similar to Vietnamese people who are resident individuals according to the provisions of the law on personal income tax.
According to Clause 2, Article 8 of the Law on Personal Income Tax 2007; an individual is entitled to a personal income tax refund in one of the following cases:
– The paid income tax amount is more significant than the payable tax amount.
– Individuals who have paid income tax but have taxable income that is not up to the taxable level.
– Other cases as decided by competent state agencies.
The regulations on tax refund are specified at point c, clause 2; Article 26 of Circular 111/2013/TT-BTC as amended and supplemented by Article 12 of Circular 151/2014/TT-BTC; on personal income tax declaration as follows:
“c) Residents earning incomes from salaries; wages or business are responsible for making a tax finalization declaration; if there is an additional tax payable or an overpaid tax amount; and requesting a tax refund or tax offset in the period. next tax return…”.”
Thus, a foreigner is a resident individual; entitled to a personal income tax refund; when fully meeting the following conditions:
– Individuals who are eligible for a personal income tax refund as prescribed above.
– The individual has a request for tax refund.
If an individual is eligible for a tax refund but does not request a refund; it will be clear in the next tax return period (offset in the following year).
Procedures for personal income tax refund
Case 1: Refund of personal income tax through an organization; or individual that only pays income (the organization or individual pays tax on behalf of an authorized person)
Step 1: Submit your application
In case organizations or individuals pay incomes after clearing the overpaid; or underpaid tax amounts of individuals with overpaid tax amounts; if there is a request from the tax agency to refund, the income-paying organization; or individual shall submit a personal income tax refund dossier to the tax agency directly managing it.
– Personal income tax refund dossiers include:
+ A written request for personal income tax refund (application for refund of state budget revenues) made according to form No. 01/ĐNHT.
+ A photocopy of the unique income tax payment voucher; and receipt of the taxpayer and the legal representative of the income-paying organization; or individual signing the commitment to take responsibility in that photo.
– Number of documents: 01 sets.
Step 2: Receive and process the request.
Case 2: Individuals directly finalize personal income tax with tax authorities
Individuals earning salaries or wages directly finalizing personal income tax with tax authorities; if they have overpaid tax amounts, must not submit tax refund dossiers.
Individuals who directly finalize tax only need to write the amount of tax requested for refund in item [47] – “The tax refunded to the taxpayer’s account” or item No. [49] – “Total tax offset for arisings of the following period” in the income tax finalization declaration form No. 02/QTT-TNCN when making tax finalization.
A few notes about the tax refund
Article 28 of Circular 111/2013/TT-BTC provides for a personal income tax refund as follows:
Firstly, personal income tax refund only applies to registered individuals; and have a tax identification number when submitting personal income tax finalization documents.
Secondly, for individuals who have authorized tax finalization for organizations; or individuals that only pay income to make tax finalization instead; the tax refund of such individuals shall be effected through income-paying organizations or individuals. Income-paying organizations and individuals shall offset overpaid and underpaid tax amounts of individuals. After clearing, if there is an overpaid personal income tax amount, it will be compensated in the following period or be refunded income tax if there is a request for a refund.
Thirdly, individuals eligible to declare tax directly with tax authorities can choose to refund personal income tax or offset in the next period at the same tax office.
In case there is a personal income tax refund but late submission of the personal income tax finalization declaration as prescribed, no penalty will be applied for administrative violations of tax finalization overdue.
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