Noticing when finalizing PIT on income from salaries or wages

	Hanoi has another place to receive documents for personal income tax finalization
	Increasing electronic tax declaration and reducing tax finalization at Tax agencies
	Ho Chi Minh City supports taxpayers to finalize PIT in 2016

The deadline for PIT finalization in 2016 at the latest is 31/3/2017. Photo: TL

Noticing on how to calculate taxable income, reductions, deductions

According to the Hanoi Tax Department, taxable income from wages and salaries is determined by total amount of wages, salaries, remunerations and other incomes with wages and salaries nature received by taxpayers in the tax period. The time for determination of taxable income for income from wages and salaries is the time when the organizations or individuals pay wages or salaries to the taxpayer.

Deductions include: Family allowance (Personal allowance is 9 million VND per month and depended allowance is 3.6 million VND per person per month); deductions for premiums, voluntary retirement funds; deductions for charity, humanitarian, study promotion.

The Hanoi Tax Department notices that income-paying organizations and individuals shall deduct personal income tax according to regulations before paying income and must issue tax deduction documents at the request of individuals that are subject to the deduction (except for individuals authorized for tax finalization).

The method of deduction is as follows: Progressive deduction: for resident individuals who signed labor contract of three months or more (including cases of leaving before the termination of the contract and cases of signing more than three-month contracts in multiple places); Tax deduction at the rate of 20%: for non-resident individuals; Tax deduction at the rate of 10%: For resident individuals who have not signed labor contracts or signed labor contracts of less than three months with a total income of 2 million vnd or more.

In cases where individuals only have income subject to tax deduction at the rate of 10%, but it is estimated that the total personal income tax rate of individuals after exemption for family allowance is less than the taxable amount, then the individuals send a commitment to income-paying organizations so that income-paying organizations shall use that as basis for temporarily not deducting personal income tax. Individuals who undertake the commitment must to make a tax registration and have tax code at the time of commitment.

When organizations finalizing income tax wages and salaries must have responsibility for finalizing the PIT on behalf of authorized individuals regardless of whether there is a deduction or not. In cases where organizations and individuals do not incur the income-paying, they do not have to make PIT finalization.

In cases of personal tax finalization, individuals shall only have to do tax finalization if they have additional tax amounts or have overpaid tax amounts requested for refund or settlement. The Hanoi Tax Department notices that individuals shall calculate their own tax amount corresponding to their income from salaries or wages in a year, compared with the conducted tax amounts to determine whether they must additionally pay or get refunded for settlement. Or authorize the organizations to pay tax finalization on behalf if they are authorized object.

Places to submit tax finalization documents

When doing a tax finalization, taxpayers need to be aware of places of documents submitting, as in each case, there will be a different receiving agency.

Where income-paying organizations are central authorities; under ministries, under provincial-level People's Committees; provincial authorities, diplomatic authorities and international organizations shall submit their tax declaration dossiers to the Tax Departments of the localities where they are headquartered. For authorities are under district-level people's Committees; district-level authorities shall submit their tax declaration dossiers to the Tax Branches of the localities where they are headquartered.

For resident individuals having income from wages and salaries in the year then the place for tax finalization dossier submitting is the tax department where the individual submits the tax declaration dossier in the year.

Especially for individuals with incomes from two or more finance sources, which are subject to tax self-finalization, the places where the dossiers are submitted shall be as follows: Individuals who have deducted family allowance for themselves at paying organizations or individuals, then the tax finalization dossier shall be submitted to the tax offices which directly manage the paying organizations or individuals; In cases where individuals who have signed a labor contract of less than 3 months or individuals who have not yet been counted for family allowances at their organizations or have changed their working places and at organizations and individuals that paid the last incomes did not conduct family allowances for themselves or at the time of settlement not working at any organizations then tax finalization dossiers shall be submitted to the Tax Branch where he/she resides.

New rates of license tax in 2017

For individuals who are residing in many places and subject to tax finalization at Tax offices of localities where individuals reside then individuals shall select one place of residence for settlement.

Taxpayers should notice that the PIT finalization deadline for 2016 is 31/3/2017. Individuals residing as foreigners terminated their labor contracts in Vietnam, then the deadline for submission of documents shall be the 45th day from the date the individual leaves Vietnam.