Conditions authorized tax finalization 2021
Cases eligible for personal income tax (PIT) finalization are guided under Article 21 of Circular 92/2015 / TT-BTC (Amendments to Article 16 of Circular No. 156/2013 / TT-BTC ).
Individuals with income from salaries and wages are allowed to authorize income-paying organizations and individuals to carry out the PIT finalization in the following cases:
- An individual who earns income from salaries and wages and signs a labor contract for 03 months or more at an income paying organization and is currently working at that organization at the time of authorization, in addition, in the case of individuals working for less than 12 months a year at an organization and having current income elsewhere on average per month in the year not exceeding VND 10 million has been deducted 10% by the income paying unit which is no tax finalization requirement for this income.
- In case the Income-paying organizations reorganize the enterprise (division, separation, consolidation, merger, conversion) and the employee is transferred from the old organization to the new organization formed after reorganizing the enterprise, if the employee does not have any additional income from salaries or wages in another year, the employee may authorize the settlement for the new organization to settle tax on employee's behalf. If the new organization makes a tax statement under the authorization of the employee, the new organization is responsible for tax settlement for the income paid by the old organization (the new organization must collect the PIT withholding certificate which is issued by old organizations for employees).
- In the case of transferring employees between organizations in the same system such as Groups, Corporations, Parent-Children Companies, Headquarters and Branches, the same principle of authorization is applied as in the case of business reorganization.
* Note :
Income-paying organizations shall only receive the settlement authorization on behalf of individuals for the income from salaries, which individuals receive from income-paying organizations, except for cases where enterprises divide or split, consolidation, merger, conversion in the year, and cases of employees transferring between organizations in the same system such as Groups, Corporations, Parent-Child Companies, Headquarters, and branches.
- Individuals who have purchased life insurance (except voluntary pension insurance) from the employer, or other optional insurances with accumulated insurance costs, which the employer or the enterprise have PIT deduction at the rate of 10% on the insurance cost amount corresponding to the employer's part as guided in Clause 2, Article 14 of Circular No. 92/2015 / TT-BTC is not subject to tax finalization for this part of income.
- Individuals authorizing income-paying organizations to make tax finalization according to form No. 02 / UQ-QTT-TNCN enclosed with Circular No. 92/2015 / TT-BTC, invoice copy attached and vouchers have proved charitable contributions, humanitarian, study encouragement (if any).
- In case the income paying organization has a large number of employees authorized to carry out tax finalization, the income paying organization may make a list of authorized individuals, which fully reflects the contents in Form No. 02 / UQ-MAF-PIT, and committed to accuracy, honesty, and responsible before the law for data and content from the list.
Who is not allowed to authorize the PIT finalization?
- Individuals who meet the conditions for authorization prescribed in Point 1 above but have been issued a PIT withholding certificate by income-paying organizations (except for cases where income-paying organizations have withdrawn and cancel deduction vouchers tax issued to the individual).
- An individual has income from salaries and wages, signed a labor contract of 03 months or more at an income-paying organization but that individual did not work at that organization at the time of authorized tax finalization.
- Individuals having incomes from salaries or wages, sign labor contracts of 03 months or more at an income-paying organization, and also have incomes from other places where tax has not been deducted or tax deduction is insufficient ( including cases not yet deducted or already deducted but not deducted).
- Individuals having income from salaries or wages, sign labor contracts of 03 months or more in many places.
- Individuals who have only freelance income withholding tax at 10% (including the case of having only freelancer income in one place).
- The individual has not registered a tax code
Resident individuals earning incomes from salaries and wages, and also being considered for tax reduction due to natural disasters, fires, accidents or dangerous diseases, are not authorized to conduct tax finalization, and individuals must conduct tax finalization by themselves, attached with tax reduction consideration documents under the guidance in Clause 1, Article 46 of the Finance Ministry's Circular No. 156/2013 / TT-BTC of November 6, 2013.
How to handle the PIT finalization case on behalf of those who are not eligible for authorization:
In cases where the income-paying organization has made a tax finalization on behalf of an individual, and then discovers that the individual is directly responsible for tax finalization with the tax authority, then income-paying organizations do not have to readjust their PIT finalization declarations, but only issue PIT withholding certificate to individuals according to the PIT finalization amount and take note in the lower-left corner of the tax withholding certificate according to the following contents: “The company ... has PIT finalized on behalf of Mr./Ms .... (by authorization) in line (ordinal number) ... of the Appendix List 05-1 / BK-QTT-TNCN "for individuals to directly make tax finalization with the tax authorities.