How does a kid model pay personal income tax?

	The deadline for submission of Personal Income Tax finalization dossier 2018 is 1 April 2019
	Ho Chi Minh Tax Department removes shortcomings on Personal Income Tax Finalization
	Ho Chi Minh City: Establish 25 sites to support personal income tax finalization

Representative of Ho Chi Minh City (HCMC) Tax Department acknowledged problems in PIT payment for the kid model. Photo

A rare case

At the dialogue conference between HCMC Tax Department and taxpayers on 27 March 2019, many problems on PIT finalization were removed and guided. However, the PIT finalization for the kid who is a model made HCMC Tax Department confused.

According to a representative of the kid, a manager for a 13-year-old model, the first time PIT was done the model’s income did not exceed taxable rate, so the tax deduction was not done. Then, there is taxable income, but due to being underage to be granted a personal tax code, the manager does not know how to pay personal income tax for this underage model, while the kid model’s parents do not agree tax deduction according to their personal tax codes.

Regarding this problem, a representative of HCMC Tax Department said that this is a rare case, and HCMC Tax Department realized this and gave specific guidance for this arising case. However, HCMC Tax Department may take the issuance of dependent tax code for the kid model into account.

Moreover, at the conference, HCMC Tax Department instructed and answered taxpayers with many problems related to PIT finalization, electronic invoices, VAT declaration, financial statement declaration and so on. However, due to the peak of the PIT finalization period, questions mostly focused on this field.

A participant asked: “From May 2018 until now, I am working for a company and the company has deducted monthly PIT. However, by February 2019, the company sent a list of employees who have worked for 1 year and asked them to write a power of attorney so that the company can make tax finalization instead. I am an employee who has not worked enough for a 1 year period, and have been deducted monthly PIT by the company, so do I have to submit the PIT finalization?

For this question, Ho Chi Minh City Tax Department guided that if the individual only had income at the company in 2018 (including the case that the employee has not yet worked for 12 months), the employee can authorize the company to make the finalization. If the employee had income from 2 or more sources in 2018, he must directly make tax finalization with the tax authority and the income-paying company shall provide documents on his PIT deduction.

How is tax relief determined ?

Determining dependents for tax relief is also one of the problems that employers often encountered. "At the beginning of the year, some individuals registered tax relief for their dependents who are parents, spouses and children, later than prescribed (March 2018, individuals send companies to submit to tax agencies). However, for individuals having nurture and care obligations from January 2018, now March 2019 these individuals re-register for tax relief, so can the company re-register the tax relief with the tax agencies and is the tax relief calculated from January 2018 ?”

HCMC Tax Department answered, in cases where there is late registration for tax relief for obligations for caring and nurturing dependents who are parents, spouses, children, but PIT is implemented at the tax finalization time, the start-time for calculating tax relief for dependents is from the commencing month of care and nurture obligation. Thus, the individuals entitled to the tax relief is from the month with the nurture obligations, which in this instance is January 2018.

In addition, the PIT finalization for foreign employees also caused many problems for employers. A representative of Vina Apparel Co., Ltd., (Thu Duc District Ho Chi Minh City) raised a problem that the company has a foreign employee who has lived in Vietnam before joining the company (April 2018), so could he authorize the company to finalize his PIT?

In response to the above problem, HCMC Tax Department said that if in 2018, or for 12 consecutive months from the first entry day in Vietnam, if a foreign employee is present in Vietnam from 183 days or more, he has to make the PIT finalization as an Individual Resident. Upon the yearly tax finalization, if the individual is permitted to authorize the PIT finalization and authorizes the PIT finalization to his company, the company has to declare all the income paid to him into the list.

HCMC: First day of supporting PIT finalization: few taxpayers, fast implementation VCN – On March 18, 2019, Ho Chi Minh City (HCMC) Tax Department started the support program ...

Also related to tax deduction for foreign employees, a representative of the Propaganda Division of HCMC Tax Department noted that companies should pay attention to PIT obligation for foreign employees who are free individuals or belong to a foreign organization, thereby defining their incomes subject to 10% tax deduction or progressive tax obligation ...