I. ELIGIBLE TAXPAYERS
1. For individuals who declare directly with tax authorities
Residents who receive income from two or more sources without meeting the conditions for tax finalization authorization must directly declare their PIT to tax authorities if there is payable tax, or if there is tax overpayment to be refunded in the next tax period.
Regarding individuals present in Vietnam for less than 183 days in the first calendar year, but 183 days or more in 12 consecutive months from their first arrival in Vietnam, the first year for tax calculation shall be the 12 consecutive months beginning from their first day of arrival in Vietnam.
Individuals who are foreigners concluding their work contracts in Vietnam must prepare their tax declarations with tax authorities before leaving the country. If an individual has not yet finished appropriate tax finalization procedures with tax authorities, then they must authorize the income-paying organization or another organization/individual to finalize their taxes on their behalf, in accordance with regulations on tax finalization for individuals. In case the income-paying organization or other organizations/individuals are authorized to declare the individual’s taxes, then they shall be held responsible for any additional payable PIT amount or any amount of tax overpayment to be refunded to the individual.
Residents receiving income from abroad and residents receiving incomes from international organizations, embassies, and consulates without tax deduction are to make their tax declarations directly with the tax authorities in case there is any additional payable PIT amount or any amount of tax overpayment to be refunded to the individual.
Residents who receive income and are also eligible for tax reduction due to natural disasters, fires, accidents, or fatal diseases that affect their ability to pay tax must not authorize organizations or individuals to prepare their tax declarations, and must directly declare their taxes with tax authorities as prescribed.
2. For income-paying organizations and individuals
Organizations and individuals that pay income in the form of salaries and wages are responsible for PIT declaration, regardless of tax withholding status, and PIT finalization on behalf of individuals who have authorized them. In case an individual authorizes an organization to prepare their PIT finalization, and has additional payable tax after finalization of VND 50,000 or less and is therefore eligible for tax exemption, then the income-paying organization or individual must still declare relevant personal information of said individual in their tax finalization dossier, and must not aggregate additional payable tax amounts of individuals whose additional payable tax after finalization is VND 50,000 or less. In case the income-paying organization has finalized PIT before the effective date of Decree No. 126/2020/ND-CP, then it will not be processed retroactively.
In case an individual is an employee who is transferred from a previous organization to a new organization when the previous organization diversifies, merges, splits, or changes its type of enterprise, and if the previous organization and the new organization exist within the same system, then the new organization is also responsible for finalizing the employee’s PIT for the income paid by the previous organization. The new organization is to collect the PIT withholding documents issued by the previous organization to the employee (if any).
In case an income-paying organization or individual dissolves, declares bankruptcy, terminates operations, terminates contracts or restructures as an enterprise, it must make a PIT finalization up to the time of dissolution, bankruptcy or termination of operations, contracts or the restructuring of the enterprise. In case of changing the type of enterprise (excluding state-owned enterprises) and the new enterprise inherits all tax obligations of the previous enterprise, then it is not required for the new enterprise to declare PIT finalization up to the date of the change; it shall declare its tax finalization at the end of the year.
3. Regarding the authorization of PIT finalization
Residents earning incomes from salaries or wages could authorize income-paying organizations and individuals to declare their PIT finalization on their behalf, specifically as follows:
– Individuals earning incomes from salaries and wages with labour contracts up to 3 months or more and are in practice working for the contractor at the time the income-paying organization or individual performs their tax finalization, even if said individuals have not worked for the full 12 months in a calendar year, could authorize the income-paying organization or individual to perform their PIT finalization on their behalf. In case an individual is an employee who has been transferred from a previous organization to a new organization because the previous organization merges, diversifies, splits, or changes its type of enterprise, and if the previous organization and the new organization exist within the same system, then the new income-paying organization could be authorized to perform the individual’s PIT finalization.
– Individuals earning incomes from salaries and wages with labour contracts up to 3 months or more and are in practice working for the contractor at the time the income-paying organization or individual performs their tax finalization, even if said individuals have not worked for the full 12 months in a calendar year, and at the same time have additional income elsewhere in the year, with the average monthly income not exceeding 10 million VND, with PIT calculated at the rate of 10% if there is no requirement for tax declaration on this income, could authorize the income-paying organization or individual to perform their PIT finalization on their behalf.
– After an individual has authorized tax finalization and the income-paying organization has made tax finalization on behalf of the individual, if it is detected that the individual must directly declare their tax finalization with the tax authorities, the income-paying organization shall not adjust the PIT finalization. It shall only issue a tax withholding certificate to the individual according to the finalization number and write in the lower left corner of the tax withholding certificate the following: “Company … has finalized PIT declaration on behalf of Mr/Ms…. (with authorization) at line (line number) … of the Appendix to List 05-1/BK-TNCN” so that the individual may directly declare their tax with the tax authorities. In case the income-paying organizations and individuals are using electronic PIT withholding certificates, then they shall convert and print the original electronic PIT withholding certificate and write the above-mentioned content in the printed copies to provide to the taxpayer.
II. EXEMPTIONS TO PIT FINALIZATION
1. For individuals
Individuals earning incomes from wages and salaries in the following cases are exempted from PIT finalization:
– Individuals whose payable personal income tax after finalization of each year is 50,000 VND or less are exempted. Tax-exempt individuals in this case determine the exempted tax amount themselves and are not required to submit personal income tax finalization as well as tax exemption documents. In case the finalization occurred during the tax finalization period from 2019 and earlier, before the effective date of Decree No. 126/2020/ND-CP, then no retroactive processing is needed;
– Individuals whose payable personal income tax is less than the temporary tax amount paid without request for tax refund or deduction in the next tax return period are exempted;
– Individuals earning incomes from salaries and wages with labour contracts up to 3 months or more at an organization, and at the same time have additional income elsewhere in the year, with the average monthly income not exceeding 10 million VND, with PIT calculated at the rate of 10%, are exempted if there is no requirement for PIT finalization for this source of income.
– Individuals whose employer offers life insurance (except voluntary retirement insurance), other optional insurance with accumulated premiums in which the employer or the insurance company has deducted PIT at the rate of 10% on the insurance premium corresponding to the part purchased or contributed by the employer to the employee, then the employee is exempted from PIT finalization for this income
2. For organizations and individuals paying incomes in the form of salaries and wages
Organizations and individuals paying incomes from salaries and wages that are not required to declare PIT finalization include: organizations and individuals that do not generate income in the year; or income-paying organizations and individuals that has suspended operations and business for the whole calendar year.
III. SPECIAL CIRCUMSTANCE TAX DEDUCTION
1. Tax deduction level for special circumstances
The amount of tax deducted due to special circumstances is specified in Resolution No. 954/2020/UBTVQH14 dated June 2, 2020 of the National Assembly Standing Committee, specifically as follows:
– The deduction for taxpayers is 11 million VND/month (132 million VND/year);
– The deduction for each dependent is 4.4 million VND/month.
2. Deduction for dependents
To be eligible for deduction for dependents, the taxpayers must register for deduction for dependents in accordance with regulations. In case taxpayers have not yet calculated circumstance-based deduction for dependents in a tax year, then the deduction for dependents shall be calculated from the month in which care obligations arise when the taxpayer declares tax finalization and registers for the deduction. Particularly, for other dependents as specified in Item d.4, Point d, Clause 1, Article 9 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance, the registration time limit of the tax deduction for dependents must be no later than December 31 of the tax year, after which tax deductions for dependents shall not be calculated for that tax year.
In case taxpayers who have authorized income-paying organizations or individuals to declare PIT finalization on their behalf and said organizations or individuals have not yet calculated circumstance-based deduction for dependents in a tax year, then the deduction for dependents shall also be calculated from the month in which care obligations arise when the taxpayers authorized the income-paying organizations or individuals for PIT finalization on their behalf and when they registered for the deduction through the income-paying organizations.
Employees who work at a business location and receive income in the form of salaries and wages from the head office in another province can register for circumstance-based deductions for dependents at either the tax authorities governing the head office or the tax authorities governing their business location. In case the employee registers for circumstance-based deduction for dependents at the business location, then the business location is responsible for transferring the documents proving the dependents from the employee to the head office. The head office is responsible for reviewing and archiving documents proving dependents according to regulations and presenting them to tax authorities for tax inspection and examination.
In case an individual changes their workplace, they are still required to register and submit a dossier to prove their dependents under the guidance specified at Item h.2.1.1.1, Point h, Clause 1, Article 9 of Circular No. 111/ 2013/TT-BTC dated 15/8/2013 of the Ministry of Finance.
3. Regarding the documents required when applying for circumstance-based deductions for dependents
a) For an individual who submits a registration of dependents directly at the tax authorities, the application must include:
+ The dependent registration form, prepared according to form No. 07/DK-NPT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
+ The dossier to prove dependents as specified at Point g, Clause 1, Article 9 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance.
+ In case the dependent is directly cared for by the taxpayer, it must be certified by the People’s Committee of the commune/ward where the dependent resides, prepared according to form No. 07/XN-NPT-TNCN attached to Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
b) In case an individual registers for circumstance-based deduction for dependents through an income-paying organization or individual, he/she shall submit a registration of dependents following the instruction at Point a, Clause 3, Section III of the Official Dispatch for income-paying organizations and individuals. Income-paying organizations and individuals shall compile the necessary documents according to form No. 07/THDK-NPT-TNCN for the Registration of dependents issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 by the Ministry of Finance and submit the documents to the tax authorities as prescribed.
IV. TAX FINALIZATION DECLARATION PROCEDURES
1. Tax finalization declaration
1.1. Dossier of declaration for PIT finalization
At Point b, Section 9.2 and Point b, Section 9.9, Clause 9 of Appendix I issued together with the Decree No. 126/2020/ND-CP dated October 19, 2020 detailing the PIT finalization declaration dossier.
Clause 2, Article 87 of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance specifies: “2. The tax declaration form prescribed in this Circular is applicable to tax periods starting from January 1, 2022 onward. The tax finalization declaration for the tax period of 2021 is also applied according to the application form specified in this Circular.”
Accordingly, the PIT finalization declaration from the tax year 2021 is as follows:
a) For individuals who declare PIT finalization directly with tax authorities, the PIT finalization dossier must include:
– Personal income tax finalization declaration form No. 02/QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
– Appendix of circumstance-based deductions for dependents according to form No. 02-1/BK-QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
– Copies (photocopies of the original) of documents proving the tax amount deducted, the temporary amount paid in the year, or tax paid abroad (if any). In case the income-paying organization fails to issue tax withholding certificates to individuals because the income-paying organization has ceased to operate, the tax authorities shall base on the database of the tax branch to process the tax finalization dossier for individuals without the required tax withholding certificates. In case the income-paying organization or individual uses an electronic PIT withholding certificate, the taxpayer shall use the physical copy of the electronic PIT withholding certificate (that the taxpayer converts and prints from the original electronic PIT withholding certificate sent by the income-paying organization or individual).
– A copy of the tax withholding certificate (specifying which PIT finalization has been paid) issued by the income-paying organization or a copy of the bank statement for the tax amount paid abroad, certified by the taxpayer, in case the foreign tax office does not issue tax certificates for the tax amounts paid in accordance with foreign regulations.
– Copies of invoices and statements evidencing contributions to charity funds, humanitarian funds, scholarship funds (if any).
– Documents proving the monetary amounts paid by the income-paying organization abroad in case the individual receives income from international organizations, Embassies, Consulates or receives income from abroad.
– Dossier for registration of dependents as instructed at Point a, Clause 3, Section III of this Official Document (if deductions are calculated for dependents at the time of tax finalization for dependents who have not yet been registered).
b) For income-paying organizations and individuals, the PIT finalization declaration dossier must include:
– The personal income tax declaration form No. 05/QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
– Appendix of a detailed list of individuals subject to taxation according to form No. 05-1/BK-QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated 29/02 September 2021 of the Ministry of Finance.
– Appendix of a detailed list of individuals subject to taxation at full tax rate according form No. 05-2/BK-QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29 2021 of the Ministry of Finance.
– Appendix containing the detailed list of dependents for circumstance-based tax deductions according to form No. 05-3/BK-QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry Finance.
c) In case the individual authorizes the organization to pay the PIT finalization amount on their behalf, the individual must make an Authorization Letter for PIT finalization from the tax period of 2021 according to form No. 08/UQ-QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
1.2. Additional changes to the PIT finalization declaration
– In case organizations or individuals make additional declarations without changing their tax obligations, they must only submit an explanation for the additional declarations and relevant documents, and not submit the additional declaration form.
– In case organizations or individuals have not submitted the annual tax finalization declaration, the taxpayer must make additional declarations in the monthly and quarterly tax declaration documents containing errors or omissions, and concurrently compile additional tax declaration documents into the dossier for the annual tax finalization.
– In case the organization or individual has submitted the annual tax finalization declaration, then:
+ For individuals who directly declare tax or directly finalize tax, only declare the additional annual tax finalization dossier.
+ For income-paying organizations and individuals, they must also make additional declarations for the annual tax finalization dossier as well as the monthly and quarterly declarations containing errors or omissions.
2. Where to submit tax finalization declarations
The place to submit the personal income tax finalization dossier is as instructed in Clause 8, Article 11 of Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government. In case an individual declares a PIT finalization declaration at the website https://canhan.gdt.gov.vn, the system has a function to assist in determining the relevant tax authorities based on the information regarding tax incurred during the year as declared by the individual.
The place to submit the personal income tax finalization dossier is as follows:
2.1. Income-paying organizations shall submit PIT finalization declarations to the tax authorities directly governing said income-paying organizations.
2.2. For individuals who declare directly to tax authorities
– Residents who earn salaries or wages in one place and are eligible for tax declarations by themselves in the year, shall submit tax finalization declaration dossiers at the tax office where the individual directly declares tax in the year as prescribed in Point a, Clause 8, Article 11 of Decree No. 126/2020/ND-CP. In case an individual has income from salaries or wages at two or more places, including the case where their income sources are both eligible for self-declaration and are also deductible from the income-paying organization’s tax declaration, then the individual shall submit their PIT finalization dossier at the tax office where the largest source of income in the year is made. In case the largest source of income cannot be determined in the year, the individual shall choose whether to submit the PIT finalization dossier to the tax authorities directly governing the income-paying organization or to the place where the individual resides.
– Residents earning salaries 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 special circumstances at any income-paying organizations or individuals shall submit a tax finalization declaration at the tax authorities directly governing such income-paying organizations or individuals. In case an individual changes their place of work and, if their final income has already been deducted based on special circumstances at the income-paying organization, a tax finalization declaration shall be submitted to the tax authorities governing the organization or individual responsible for that final income. In case the individual changes the place of work and, if their final income has not been deducted based on special circumstances at the income-paying organization, the tax finalization declaration shall be submitted to the tax authorities where the individual resides. If the individual has not yet calculated the deduction based on special circumstances at any income-paying organizations or individuals, the tax finalization declaration shall be submitted to the tax authorities where the individual resides.
+ In case the resident does not sign a labour contract, or signs a labour contract of less than 3 months, or signs a service provision contract with income at one place or multiple places where 10% has been deducted, then the PIT finalization declaration shall be submitted to the tax authorities where the individual resides.
+ Individual residents within the year who earn incomes from salaries or wages at one place or multiple places but at the time of finalization do not work at any income-paying organizations or individuals, then the PIT finalization declaration shall be submitted to the tax authorities where the individual resides.
– For residents with incomes that are directly subject to PIT finalization with tax authorities who have applied for tax reduction due to natural disasters, fires, accidents or fatal diseases, then the place to submit the PIT finalization declaration is the place where that individual applied for their tax reduction. Tax authorities processing tax reduction applications are also responsible for handling tax finalization declarations according to regulations.
V. DURATION FOR SUBMISSION OF TAX FINALIZATION DECLARATIONS
Pursuant to provisions presented in Points a and b, Clause 2, Article 44 of the Law on Tax Administration No. 38/2019/QH14 of the National Assembly, the deadline for declaration and submission of PIT finalization dossiers is as follows:
– For income-paying organizations: The deadline for submitting tax finalization declarations is the last day of the third month from the end of the calendar year.
– For individuals who directly finalize tax: The deadline for submitting tax finalization declarations is the last day of the fourth month from the end of the calendar year. In case an individual has a PIT refund but is late in submitting a tax finalization declaration as prescribed, no penalty will be applied for administrative violations regarding late tax declaration.
– In case the deadline for submitting tax finalization declarations coincides with a holiday, the time limit for submitting tax finalization declaration dossiers is the next working day after that holiday as prescribed in the Civil Code.