Tax issues are one of the subjects governed by Vietnamese law. In which the individual is the taxpayer’s declaration to determine the payable tax amount of the previous year, thereby determining the outstanding or overpaid tax amount as a basis for tax refund, which is called tax finalization. So, how is the personal income tax finalization procedure done? Let’s find out with Lawyer X in detail the legal regulations on tax finalization.
What is personal income tax settlement?
Finalization of personal income tax is understood as follows:
Personal income tax finalization means an individual’s declaration of tax in a tax year on matters of additional tax to be paid, refund of overpaid tax, and tax offset in the next period. follow.
Because if you do not perform this obligation, individuals will face the following troubles:
For individuals who have to pay more tax but fail to declare and finalize on time, if the tax agency detects it, they will be administratively sanctioned.
For individuals who overpay but fail to declare and finalize tax on time, they will not be refunded the overpaid tax amount and will not be able to apply the clearing system in the next tax period.
Finalization of personal income tax for the wrong purpose of personal income tax arrears. After your business declares and pays personal income tax every year to the tax office, the tax agency will send an inspector down to check and verify the data your business has declared is correct. body or not.
Subjects must finalize personal income tax
Pursuant to Point d, Clause 6, Article 8 of Decree 126/2020/ND-CP and Official Letter 636/TCT-DNNCN, the following subjects must finalize PIT:
1) Organizations and individuals paying salaries and wages;
(2) Authorize PIT finalization;
(3) The individual directly settles the settlement with the tax authority.
Time limit for personal income tax finalization?
According to point d, Clause 2, Article 16 of Circular 156/2013/TT-BTC amending and supplementing Circular 92/2015/TT-BTC, no later than the 90th day from the end of the calendar year the individual has income. incomes from wages, salaries or income-paying organizations and individuals must submit tax finalization declarations.
Particularly for the following cases, the time limit for personal income tax finalization is as follows:
1/ For individuals who permanently or temporarily reside and earn incomes from wages and salaries and are present in Vietnam in a calendar year for less than 183 days, but more than 183 days when counting in 12 consecutive months, the time limit for deciding maths:
The first year: from the time of calculating full 12 consecutive months, the latest is the 90th day.
Year 2: no later than the 90th day from the end of the calendar year.
2/ For a resident who is a foreigner who terminates his/her working contract in Vietnam and authorizes an organization or individual to pay income or other organizations and individuals before leaving the country, the time limit is 45 minutes at the latest days from the date that person leaves the country.
What does a personal income tax finalization file include?
Pursuant to the appendix issued with Decree 126/2020/ND-CP and the declaration form issued together with Circular 80/2021/TT-BTC, the PIT finalization dossier is prescribed as follows:
- For organizations and individuals paying salaries and wages
(1) Declaration of PIT calculation according to form 05/QTT-TNCN.
(2) Appendix of a detailed list of individuals subject to tax according to the partial progressive schedule according to form No. 05-1/BK-QTT-TNCN.
(3) Appendix of a detailed list of individuals subject to tax at the full tax rate, made according to form No. 05-2/BK-QTT-TNCN.
(4) Appendix of detailed list of dependents for family deduction according to form No. 05-3/BK-QTT-TNCN.
Individuals earning income from salaries or wages directly declare tax with the tax authorities
Procedures for personal income tax finalization
Where to submit tax finalization documents
For organizations paying income
– Submit the personal income tax declaration and finalization dossier to the tax agency directly managing the organization paying such income.
For individuals who directly settle with tax authorities
Residents who earn salary or wages in one place and are eligible to self-declare tax in the year, shall submit tax finalization declaration dossiers at the tax office where the individual directly declares tax in the year as prescribed at Point a. a Clause 8, Article 11 of Decree No. 126/2020/ND-CP.
In case an individual has income from salary or wages at two or more places, including the case where he has both directly declared income and has deducted income from the paying organization, he/she shall submit a dossier of application. declare tax finalization at the tax office where the largest source of income in the year.
In case the largest source of income cannot be determined in the year, the individual shall choose the place to submit the finalization dossier at the tax agency directly managing the paying organization or the place where the individual resides.
Resident individuals earning salary or wages that are eligible for withholding at source from two or more places shall submit a tax finalization declaration as follows:
Individuals who have calculated deductions for their family circumstances at any income-paying organization or individual shall submit a tax finalization declaration to the tax agency directly managing such income-paying organization or individual.
In case an individual changes his/her workplace and at an organization or individual paying the final income with family deductions, a tax finalization declaration shall be submitted to the tax authority managing the organization or individual. pay final income.
In case the individual changes the place of work and at the organization or individual paying the final income without deduction for family circumstances, the tax finalization declaration dossier shall be submitted at the tax office where the individual resides.
If the individual has not yet calculated the deduction for his/her family circumstances at any income-paying organization or individual, the tax finalization declaration shall be submitted at the tax office where the individual resides.
In case the resident does not sign a labor contract, or signs a labor contract of less than 3 months, or signs a service provision contract with income at one place or many places where 10% has been deducted, a dossier of declaration must be submitted. tax finalization at the tax office where the individual resides.
Individuals residing during the year earning incomes from wages or salaries at one place or many places but at the time of settlement do not work at any income-paying organizations or individuals, the place to submit tax finalization declaration dossiers is to: tax authority where the individual resides.
Individuals who directly finalize taxes at tax offices
Consists of 2 steps:
Step 1: Submit your application
Residents who have income from salaries and wages in 01 place and are eligible to self-declare tax in the year, shall submit tax finalization declaration dossiers at the tax office where the individual directly declares tax in the year according to the following regulations:
Individuals residing in Vietnam who pay incomes subject to PIT but have not yet withheld tax, individuals shall submit tax declaration dossiers to tax agencies directly managing income-paying organizations and individuals. .
If a resident earns income from wages or salaries paid from abroad, he/she shall submit a tax return to the tax authority managing the locality where the individual works in Vietnam. In case the place where the individual’s work arises is not in Vietnam, the individual shall submit a tax return to the tax office where the individual resides.
Step 2: Receive and process documents
Online PIT finalization.
Tax finalization procedures for income-paying organizations and individuals
Accountants make PIT finalization through the unit’s accounting software or through the declaration support software of the General Department of Taxation.
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Frequently asked questions
Pursuant to Article 13 of Decree 125/2020/ND-CP, depending on the delay in finalization, a warning or fine may be imposed (the lowest level is 02 million VND and the highest level is 25 million VND).
Note: In case an individual has a personal income tax refund but is late in submitting the tax finalization declaration as prescribed, no penalty will be applied for administrative violations in filing tax finalization overtime.
Pursuant to Point a, Clause 4, Article 2 of Circular 111/2013/TT-BTC stipulating taxable incomes as follows:
Income from capital transfer means personal income received, including:
a) Income from transfer of contributed capital in limited liability companies (including single-member limited liability companies), partnerships, business cooperation contracts, cooperatives, credit funds people, economic organizations and other organizations.
Pursuant to Point d, Clause 1, Article 11 of this Circular, the tax calculation for income from the transfer of contributed capital is taxable income and the tax rates are as follows:
Personal income tax payable = Taxable income × 20% tax rate
Conclusion: So the above is Procedures for personal income tax finalization in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
