I.  TAX PAYER WHO NEED TO DO THE PIT FINALIZATION

A. For person who do the finalization directly with Tax department

• Individuals who have 02 sources of income (or more) that not meet the requirement of authorization, must process the PIT finalization directly with Tax department if having additional tax payable or overpaid tax amount, request refund or offset in the next tax period.
• Individuals present in Vietnam for less than 183 days in the first calendar year, but counting in 12 consecutive months from the first day of presence in Vietnam for 183 days or more, the first tax period for finalization will be 12 consecutive months from the first day of presence in Vietnam.
• Foreign individuals who end of labor contract in Vietnam shall do the PIT finalization with Tax department before exiting Vietnam.In case the individuals have not completed the procedures for PIT finalization, they may authorize their employer or other organization/individual to carry out the finalization according to regulations. In case the employer or other organizations/individuals receive authorization, they must be responsible for the additional PIT payable or have the overpaid tax refunded.
• Resident individuals earning incomes from salaries paid from abroad or from international organizations, embassies, and consulates, have not yet deducted PIT in the year, they must settle directly with the Tax department if there is additional tax payable or overpaid tax amount needed to request refund or offset in the next tax period.
• Individuals who earn incomes from salaries and are considered for tax reduction due to natural disasters, fires, accidents or fatal diseases affecting their ability to pay tax, shall not authorize the finalization to organizations/individuals who paid income, but must directly declare the tax return with Tax department according to regulations.

B. For organizations and individuals paying salaries/wages.

• Organizations/Individuals that pay salaries and wages are responsible for declaring PIT, regardless of whether tax withholding or not, and do the PIT finalization on behalf of authorized individuals.
• In case an individual authorizes an organization and has an additional tax payable after finalization of VND 50,000 or less and is eligible for tax exemption, the income-paying organization/individual still declares that person's information on tax returns and do not aggregate additional tax payable by such individuals. In case the organization has already settled PIT before the effective date of Decree No. 126/2020/ND-CP, it will not be processed retroactively.
• In case an individual is an employee who is transferred from the old organization to the new one because the old organization merges, divides, separates, transforms the type of enterprise or the old organization and the new organization are under the same the system, the new organization is responsible to do PIT finalization for authorized employee for both the income paid by the old and the new organization collect the PIT withholding certificate which is issued from the old organization.
• If an organization or individual paying income dissolves, goes bankrupt, terminates operations, terminates contracts or reorganizes an enterprise, it must declare tax finalization to the time of operation ending. In case of conversion of the type of enterprise (excluding equitized state-owned enterprises) and the converted enterprise inherits all tax obligations of the previous enterprise type, it is not required to declare the final settlement until the date of concersion decision, only declare the final settlement at the end of the year.

C. PIT finalization authorization

Resident individual who earning income from salaries and wages authorize PIT finalization to organizations/individuals paying income, specifically as follows:

• Individuals earning incomes from salaries and wages sign labor contracts of 03 months or more with one organization/individuals and are actually working at that organization/individual at the time of finalization, including cases where not working for full 12 months in that calendar year. In case an employee is transferred from the old organization to the new one because the old organization merges, divides, separates, transforms the type of enterprise or the old and the new organization in same system, the individual is authorized to the new organization.
• Individuals earning incomes from salaries and wages sign labor contracts of 03 months or more with one organization/individuals and are actually working at that organization/individual at the time of finalization, including cases where not working for full 12 months in that calendar year; at the same time have current income elsewhere in the year but the average each month is not more than 10 million VND and have been withheld PIT at the rate of 10%, and have no demand to finalize for this income.
• After individuals has authorized and the income paying organization has made tax finalization on their behalf, if it is discovered that the individual is required to directly finalize the PIT with the tax authority, the organization shall not revise its declaration, only issue PIT withholding certificate to individual according to the finalized data and write in the lower left corner of the tax withholding certificate the content: “Company ... has issued PIT on behalf of Mr./Ms. .... (by authorization) at line (ordinal number) ... of the Appendix to List 05-1/BK-TNCN" for individuals to directly work with Tax department. In case the income-paying organization or individual uses an e-PIT withholding certificate, they shall print it out and write the above-mentioned contents in the converted printed copy to provide taxpayers.

II. INDIVIDUAL WHO DON’T NEED TO DO FINALIZATION

A. For individual

Individuals earning income from wages and salaries in the following cases are not required to finalize tax:

• Individuals whose personal income tax amount to needed to be paid after the final finalization of each year is 50,000 VND or less. Individuals eligible for tax exemption in this case determine the exempted tax amounts themselves, are not required to submit a PIT finalization or tax exemption. In case the finalization period from 2019 and earlier has been done before the effective date of Decree No. 126/2020/ND-CP, it will not be processed retroactively;
• Individuals whose payable PIT amount is smaller than the temporarily paid amount without requesting tax refund or offsetting in the next tax return period;
• Individuals earning incomes from salaries and wages sign labor contracts of 03 months or more with one organization/individuals, at the same time have current income elsewhere in the year but the average each month is not more than 10 million VND and have been withheld PIT at the rate of 10%, and have no demand to finalize for this income.

An individual whose employer buys life insurance (except voluntary retirement insurance), other optional insurance that has accrued premiums deducted by the employer or insurer the PIT rate of 10% on the insurance amount corresponding to the amount which the employer buys or contributes for the employee, the employee is not required to pay tax on this income.

B. For organizations and individuals paying incomes for salaries and wages

Organizations and individuals that pay incomes from salaries and wages that are not subject to finalize PIT include: organizations and individuals that do not pay income in the year or suspend operations and business for the whole calendar year.

III. SELF AND FAMILY DEDUCTIONS

A. Deduction range:

Regulated at Resolution no.954/2020/UBTVQH14 date 02/6/2020 of the Standing Committee of the National Assembly, 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.

B. Dependent registration:

• To be eligible for dependent deduction, taxpayer must register  according to regulations. in case the taxpayer has not yet calculated the deduction for the dependent in the tax year, the deduction will be calculated from the month of arising the dependent when the taxpayer implements the finalization. Particularly for other dependents as guided 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 (MOF), the deadline for registration of dependent no later than December 31 of the tax year, over the above time limit shall not be allowed to calculate for that tax year.
• In case taxpayers who is subject to authorization for finalization and have not yet calculated deductions for family circumstances for dependents in the tax year, deductions for dependents shall also be calculated from the month in which the maintenance obligation arises when the taxpayer authorize the finalization through the income paying organization.
• Employees who work at dependent units or business locations, receive income from salaries and wages from the head office in another province, can register for deductions for dependents at the tax authority manging that head office or dependent unit, business location. In case the taxpayer registers for family circumstance-based deduction at the dependent unit or business location, the dependent unit or business location is responsible for transferring the taxpayer's dependent proving documents to the head office. The head office is responsible for reviewing and keeping proving documents according to regulations and presenting them during tax inspection.
• In case an individual changes his/her workplace, he/she must still register and submit a dossier to prove his/her dependents according to the guidance in Part II, Clause 1 of Decision 40/QD-BTC dated January 13, 2023.

C. Dossier of family deduction for dependents

For individuals who directly submit dependent registration dossiers at Tax offices, the dossiers include:

• The dependent registration form No. 07/DK-NPT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the MOF.
• Dossier to prove dependents as guided in Article 1 of Circular 79/2022/TT-BTC.
• In case the dependent is directly raised by the taxpayer, it must be certified by the People's Committee of the commune or ward where the dependent resides according to form No. 07/XN- NPT-TNCN issued together with Appendix II Circular No. 80/2021/TT-BTC dated September 29, 2021 of the MOF.

In case an individual registers for family circumstance-based deduction for dependents through an income paying organization or individual, he/she shall submit a dependent registration dossier under the guidance at Point a, Clause 3, Section III of this official dispatch to the organization or individual. Organizations and individuals general document according to the Appendix II of the Circular No.80/2021/TT-BTC dated September 29, 2021 by the MOF and submitted to the tax authority as prescribed.

IV.  PIT FINALIZATION PROCEDURE

A. Document prepared for PIT finalization

At Point b, Section 9.2 and Point b, Section 9.9, Clause 9 of Appendix I promulgated together with the Government's Decree No. 126/2020/ND-CP dated October 19, 2020 providing for tax finalization declaration dossiers and Clause 2 Article 87 Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance guiding:

“2. The tax declaration form prescribed in this Circular is applicable to tax periods starting from January 1, 2022 onward. For the tax period of 2021, the application form prescribed in this Circular is also applied.”

► For individuals who declare tax finalization directly with tax authorities, a tax finalization dossier includes:

• 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 to list of family circumstance-based deductions for dependents, 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 of documents proving the tax amount already withheld, temporarily paid in the year, and the tax paid abroad (if any). In case the income paying organization does not issue PIT withholding certificate to individuals because it has ceased to operate, the tax authorities shall base themselves on the database of the tax system to consider and process tax finalization dossiers for such individuals. PIT withholding certificate is not required. In case income-paying organizations and individuals use electronic PIT withholding certificate, taxpayers shall use the copy of electronic PIT withholding certificate (paper copies printed from original electronic PIT withholding certificate sent to taxpayers by income-paying organizations and individuals).
• A copy of the tax withholding certificate (specifying which income tax return has been paid) issued by the income paying agency or a copy of the bank statement for the tax amount paid abroad, certified by taxpayer according to the provisions of foreign law, the foreign tax authority does not issue a certificate certifying the paid tax amount.
• Copies of invoices and vouchers evidencing contributions to charity funds, humanitarian funds, study promotion funds (if any).
• Documents proving the amount of money paid by the unit or organization paying income abroad in case the individual receives income from international organizations, embassies, consulates or receives income from abroad.
• Dossier for registration of dependents as guided at Point a, Clause 3, Section iii of this Dispatch (if dependents are calculated for deduction at the time of tax finalization but have not yet registered).

► For organizations and individuals paying income, the PIT finalization declaration dossiers are as follows:

• PIT finalization 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 tax deduction according to the partial progressive, form No. 05-1/BK-QTT-TNCN issued together with Appendix II of Circular No. 80/2021/TT-BTC dated September 29 2021 of the Ministry of Finance.
• Appendix of detailed list of individuals subject to tax at the full tax rate, 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 of detailed list of dependents for family deduction, 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 of Finance main.
• In case the individual authorizes the organization to do the finalization on behalf, the individual shall make a power of attorney for tax finalization from the tax period 2021 using the form No. 08/UQ-QTT-TNCN attached to Appendix II of this Circular. No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.

B. Additional declaration of PIT finalization

- In case organizations or individuals make additional declarations that do not change their tax obligations, they only have to submit an explanation of the additional declaration and relevant documents, not have to submit additional declarations.

- In case organizations and individuals have not submitted the annual tax finalization declaration, they shall make additional declarations in the monthly and quarterly tax declaration dossiers with errors or omissions, and concurrently synthesize additional declaration data into the yearly tax declaration dossiers.

- In case the organization or individual has submitted the annual tax declaration, then:

• For individuals who directly declare and finalize PIT, only additional declarations are made for the annual tax finalization declaration.
• For organizations and individuals that pay incomes from salaries and wages, they must also make additional declarations for the annual tax finalization and monthly and quarterly declarations with errors and omissions, respectively.

C. Where to submit tax finalization declarations

The place to submit tax finalization dossiers shall comply with specific instructions in Clause 8, Article 11 of Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government. In case an individual declares and submits a tax finalization declaration at the website https://canhan.gdt.gov.vn, the system has a function to assist in determining the final tax authority based on information related to the tax obligation incurred in the year declared by the individual.

► Income-paying organizations shall submit tax finalization declarations to tax agencies directly managing such income-paying organizations.

► For individuals who directly settle with tax authorities:

- Residents who have income from salaries and 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. Clause 8, Article 11 of Decree No. 126/2020/ND-CP. In case an individual has income from salary or wages at 02 or more places, including the case where he has both directly declared income and has deducted income from the paying organization, the individual shall submit a dossier of application 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.

- Residents who earn 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 dossier at 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 that pays the final income with deduction for his/her family circumstances, he/she shall submit a tax finalization declaration at the tax authority managing the organization or individual paid 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, a 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 contract to provide services with income at one place or many places where 10% of PIT has been deducted, then submit a dossier at the tax office where the individual resides.
• Individuals who reside during the year and earn incomes from salaries or wages at one or many places but at the time of finalization do not work at any income-paying organizations or individuals, the place where the tax finalization declaration is where the individual resides.

- Residents who have salary or wage income and are directly subject to tax finalization with the tax agency and have a dossier of request for tax reduction due to natural disasters, fires, accidents, or fatal diseases, the place of submission of finalization dossiers is the tax agency where individuals submiited tax reduction dossiers. Tax agencies handling tax reduction dossiers are responsible for handling tax finalization dossiers according to regulations.

D. Deadline for submission of tax finalization dossiers:

Pursuant to the provisions of 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 declaring and submitting tax finalization documents is as follows:

► For income payers: The deadline for submitting tax finalization declarations is the last day of the 3rd month from the end of the calendar year.

► For individuals who directly finalize tax: the deadline for submitting tax finalization documents is the last day of the 4th month from the end of the calendar year. In case the 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 case the deadline for submitting coincides with a prescribed holiday, the time limit for is the next working day of that holiday according to the provisions of the Civil Code.

Legal basis:

• Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance;
• Tax Administration No. 38/2019/QH14;
• Decree No. 126/2020/ND-CP;
• Circular 79/2022/TT-BTC;
• Decision 40/QD-BTC dated 13/01/2023;
• Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance.