Conditions for completing personal income tax for foreigners

Conditions for completing personal income tax for foreigners . If the case of attributes is completed personal income tax and have a proposal; foreigners working in Vietnam, then complete the tax. Let us learn about this topic with LSX law firm as follow:

Conditions for completing personal income tax for foreigners

In general, foreigners working in Vietnam have personal income tax obligations, classified into 2 categories: 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 total personal income tax shall be applied. The application is 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 shall complete income tax in one of the following cases:

– Firstly, the paid income tax amount is more considerable than the payable tax amount.

– Secondly, individuals who have paid income tax but whose income tax has not yet reached the taxable level.

– Thirdly, other cases under the decision of competent state agencies to appraise.

Tax regulations are entirely determined 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 tax declarations after:

“C) Residents earning incomes from salaries, wages; and business are responsible for declaring tax if there is an additional tax payable or overpaid tax amount; and request to complete or offset tax in the tax declaration period. next… “.”

Thus, a foreign individual is an individual who entirely resides in personal income tax when fully meeting the following conditions:

– Individuals may complete personal income tax according to the above provisions.

– Individuals have a complete proposal.

If an individual scope school have a refund but does not have a proposal for completion; it is offset on the following tax return (offset next year).

Procedures for personal income tax refund for foreigners

Besides procedures for tax exemption and reduction of personal income tax, foreigners should know procedures for personal income tax refund for foreigners which is as follow:

• Case 1: Refund of personal income tax through an organization or individual that only pays income (the organization; or individual paying income declares tax on behalf of an authorized person)

Step 1: Submit your application

Step 2: Receive and process the request.

• Case 2: Individuals directly finalize personal income tax with tax authorities

Besides, individuals who directly finalize tax only need to write the tax amount 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.

Some notes about tax refund

Article 28 of Circular 111/2013/TT-BTC stipulates personal income tax refund as follows:

The personal income tax refund only applies to individuals; who have registered and have a tax identification number when submitting personal income tax finalization documents.

– 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 canceled in the following period or be refunded income tax if there is a refund request.

Individuals who declare tax directly with tax authorities can choose to refund personal income tax or offset in the next period at the same tax office.

If there is a personal income tax refund but late submission of the personal income tax finalization declaration as prescribed, no penalty will be for administrative violations that declare tax finalization overtime.

To sum up. rhe personal income tax refund for foreigners is; applied the same way as for domestic employees if the foreign individual is a resident individual according to the provisions of the law on personal income tax.

If you wonder about Procedures for registration of personal tax identification numbers for foreigners, LSX Law firm is happy to help.

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