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July 30th, 2024 News Events
Many people are currently interested in finalizing their income tax. So, what should be noted when finalizing personal income tax? The article includes some notes on personal income tax finalization records for 2024.
1. What is personal income tax?
Personal income tax is the amount that income earners must pay from a portion of their salary or other sources of income to the state budget after deductions. Personal income tax is not levied on low-income individuals, so this collection will be fair to all subjects and contribute to reducing the gap between social classes.
Two subjects must pay personal income tax: Individuals residing and individuals not residing in Vietnam with taxable income. Specifically:
For resident individuals, taxable income includes income arising within and outside the territory of Vietnam, such as salaries, wages, bonuses, and income from investments, regardless of where the income is paid. This is the income on which personal income tax is calculated.
For non-resident individuals: Taxable income is income arising in Vietnam (regardless of where income is paid and received).
2. What is personal income tax settlement?
Personal income tax settlement is a straightforward process. It involves an individual declaring the amount of tax in a tax year, including the amount of tax that must be paid, in addition to refunds of overpaid tax and tax offsets in the next period. This process, when understood, can empower you to manage your taxes effectively.
What is personal income tax settlement?
3. Notes on personal income tax finalization dossiers in 2024
3.1 Deadline for submitting personal income tax finalization
Under Clause 2, Article 44 of the Law on Tax Administration 2019, the deadline for submitting personal income tax finalization in 2024 is as follows:
– No later than the last day of the third month from the end of the calendar year or fiscal year for annual tax finalization dossiers; no later than the last day of the first month of the calendar year or fiscal year for annual tax declaration dossiers;
– No later than the last day of the fourth month from the end of the calendar year for personal income tax finalization dossiers of individuals directly settling taxes;
– No later than December 15 of the previous year for lump-sum tax declaration dossiers of business households and business individuals paying tax by the lump-sum method. For new business households and individuals, the deadline for submitting lump-sum tax declaration dossiers is no later than ten days from the business commencement date.
It's important to note that failing to meet these deadlines can result in penalties or fines, so it's crucial to ensure that you are aware of and adhere to these deadlines.
– If individuals with income from salaries and wages authorize the organization or individual paying the income to settle tax, the deadline for tax settlement is no later than March 31, 2024.
– If individuals with income from salaries and wages directly settle personal income tax with the tax authority, the deadline for tax settlement is no later than April 30, 2024.
3.2 Who is required to submit personal income tax finalization? This is an important question, and we have the answer. Based on Point d, Clause 6, Article 8 of Decree 126/2020/ND-CP guiding personal income tax finalization, the following subjects must make personal income tax finalization:
Subjects required to submit personal income tax finalization
Based on Point d, Clause 6, Article 8 of Decree 126/2020/ND-CP guiding personal income tax finalization, the following subjects must make personal income tax finalization:
(1) Organizations and individuals paying salaries and wages: Finalize taxes on behalf of authorized individuals regardless of whether tax deductions arise.
(2) Authorizing personal income tax finalization: Employees who sign contracts for three months or more at one place and work there at the time of tax finalization.
This case applies to subjects with irregular income of at most 10 million VND elsewhere and has had 10% personal income tax deducted if there is no request for finalization on this income.
(3) Individuals who directly settle with the tax authority include the following subjects:
– Have tax payable/overpaid and request a refund/offset in the next tax declaration period, except for the following cases: The tax payable after settlement of each year is less than VND 50,000 or less; the tax payable is less than the provisionally paid tax, and there is no request for a tax refund or offset in the next period.
– Being present in Vietnam for less than 183 days (calculated in the first calendar year) and from 183 days or more in 12 consecutive months from the first day of presence in Vietnam.
– Foreign individuals who have terminated their employment contracts in Vietnam must declare and settle their taxes with the tax authorities before leaving the country
Resident individuals who earn income from salaries and wages and are eligible for tax reduction due to natural disasters, fires, accidents, or serious illnesses that affect their ability to pay taxes must not authorize organizations or individuals who pay income to declare and settle taxes on their behalf; they must directly declare and settle taxes with the tax authorities according to regulations.
3.3 Place of submission of personal income tax declaration
At Point b2 Clause 8 Article 11 Decree No. 126/2020/ND-CP dated October 19, 2020, of the Government on the place of submission of personal income tax declaration:
"b.2) R "resident individuals with income from salaries and wages subject to deduction at source by organizations from two or more places shall submit personal income tax declaration as follows:
Individuals who have calculated personal income tax for themselves at the organization or individuals paying the income shall submit a personal income tax declaration to the tax authority directly managing the organization or individual paying that income.
Suppose an individual changes his/her workplace, and the organization or individual that pays the final income has the personal income tax calculated for him/her. In that case, he/she shall submit the tax declaration to the tax authority managing the organization or individual that pays the final income.
Suppose an individual changes his/her workplace, and the organization or individual that pays the final income does not calculate the personal income tax for him/her. In that case, he/she shall submit the tax declaration to the tax authority where the individual resides.
Suppose an individual has not calculated the personal income tax for himself/herself at any organization or individual that pays income. In that case, he/she shall submit the tax declaration to the tax authority where the individual resides.
In case an individual resides without signing a labor contract, signs a labor contract for less than three months, or signs a service provision contract with income at one or more places that have deducted 10%, he/she shall submit the tax declaration to the tax authority where the individual resides.
For individuals residing in the year with income from salaries and wages in one or more places but who do not work for any organization or individual paying income at the time of settlement, the place to submit the QTT declaration is the tax authority where the individual resides". “
