In what cases is personal income tax finalization not required?
1. What cases do not require personal income tax finalization?
Pursuant to item d3, point d, clause 6, Article 8 of Decree 126/2020/ND-CP and based on section 1, Part II of Official Dispatch 883/TCT-DNNCN of 2022, cases that do not need personal income tax finalization include:
(i) Individuals whose additional tax amount to be paid after each year’s settlement is VND 50,000 or less.
(ii) Individuals whose tax amount must be paid is less than the tax amount temporarily paid without requesting a tax refund or offset in the next tax declaration period.
(iii) Individuals with income from salaries or wages who sign a labor contract of 03 months or more at a unit, and at the same time have current income elsewhere in the year with an average monthly income of no more than 10 million VND and have personal income tax deducted at the rate of 10% if not required, do not have to finalize tax on this income.
(iv) For individuals whose employer buys life insurance (except voluntary pension insurance) or other optional insurance with accumulated premiums for which the employer or insurance company has deducted personal income tax at the rate of 10% on the premium amount corresponding to the portion purchased or contributed by the employer for the employee, the employee does not have to finalize personal income tax on this income.
Thus, there are 04 cases that do not need to finalize personal income tax mentioned above.
2. In what cases are individuals not authorized to finalize taxes?
Pursuant to Point d, Clause 6, Article 8 of Decree 126/2020/ND-CP and Official Dispatch 883/TCT-DNNCN in 2022 of the General Department of Taxation on personal income tax finalization, in the following cases, individuals are not authorized to finalize taxes but must directly settle with the tax authority:
(i) Resident individuals who have income from salaries and wages from two or more places but do not meet the conditions for authorized finalization must directly declare personal income tax finalization with the tax authority if there is an additional tax amount to be paid or there is an overpaid tax amount that needs to be refunded or offset in the next tax declaration period.
(ii) Individuals are present in Vietnam for less than 183 days in the first calendar year, but calculated for 12 consecutive months from the first day of presence in Vietnam for 183 days or more, then the first settlement year is 12 consecutive months from the first day of presence in Vietnam.
(iii) Foreign individuals who finish working contracts in Vietnam declare tax finalization with tax authorities before leaving the country. In case an individual has not yet completed tax finalization procedures with the tax authority, he or she must authorize an income-paying organization or other organization or individual to finalize tax according to regulations on tax finalization for individuals. In case the income paying organization or another organization or individual receives authorization for finalization, they must be responsible for the additional personal income tax amount payable or be refunded the individual’s overpaid tax amount.
(iv) Resident individuals with income from salaries and wages paid from abroad and resident individuals with income from salaries and wages paid from international organizations, embassies, consulates that have not yet deducted tax during the year, the individual must settle directly with the tax authority. If there is an additional tax amount to be paid or there is an overpaid tax amount, request a refund or offset in the next tax declaration period.
(v) Resident individuals who have income from salaries and wages and are considered for tax reduction due to natural disasters, fires, accidents, or serious diseases that affect their ability to pay taxes shall not authorize the organization or individual paying the income to settle taxes on their behalf but must directly declare the final settlement with the tax authority according to regulations.
3. When is the deadline for submitting annual personal income tax finalization documents?
Pursuant to Clause 2, Article 44 of the Law on Tax Administration 2019, the deadline for submitting annual personal income tax finalization documents is as follows:
(i) No later than the last day of the 3rd month from the end of the calendar year or fiscal year.
(ii) No later than the last day of the 4th month from the end of the calendar year for personal income tax finalization dossiers of individuals directly making tax finalization.
Source: What cases do not require personal income tax finalization?
