To print this article, all you need is to be registered or login on Mondaq.com.
The personal income tax refund is a problematic issue
for most employees that have a high income. Although the amount of
money refunded might not be much, it is the right of each employee
in Vietnam’s society. So, what are the details of regulations
on personal income tax refunds in Vietnam?
Personal income tax refund
Refund of personal income tax is the procedure by which the tax
authority refunds the overpaid tax amount of a taxpayer (in the
final settlement year).
Nonetheless, it should be noted that the personal income tax
refund can only be conducted if the employees fully comply with the
regulations of the tax law.
Regulations on the refund of personal income tax
According to article 23 of Circular 92/2015/TT-BTC, the
conditions for personal income tax refunds are as follows:
Refund of personal income tax is only applicable to individuals
who already have a tax identification number at the time of
requesting a tax refund.
For individuals who have authorized tax settlement for
organizations or individuals to make the final settlement, the
individual’s tax refund shall be conducted through those
organizations or individuals.
If an individual directly settles the personal income tax refund
in Vietnam, if he/she has an overpaid tax amount, he/she shall be
entitled to a tax refund, or the amount of money will be reserved
for the next period of calculating payable personal income tax.
Tax refund for income-paying organizations and
individuals that make settlements on behalf of individuals
authorized to make tax finalization
In case income-paying organizations and individuals after
offsetting the overpaid or underpaid tax amount of individuals and
has an overpaid tax amount, if the individual who is subjected to
personal income tax required the tax agency to refund the overpaid
tax amount, income-paying organizations and individuals shall file
the tax refund dossier to the tax agency.
Tax refund for individuals earning incomes from salaries
or wages that they themselves directly settle taxes with tax
authorities
If there is an overpaid tax amount, the individual is not
required to submit a tax refund dossier, but only needs to write
the tax amount requested for the refund.
The amount of overpaid tax can be transferred to the
taxpayer’s account or it can be reserved for the following
period of personal income settlement. This is according to the
choice of the individual who is subjected to personal income
tax.
Calculating the overpaid personal income tax amount to be
refunded
If the taxpayer wants to know if they have paid excess or
insufficient personal income tax this year, they must make a final
settlement. Individuals can make a final settlement in one of two
forms: Do the final settlement directly with the tax agency or
authorize an income-paying agency (if eligible).
The formula for calculating overpaid Personal income tax amount
is as follows:
Overpaid PIT amount = Paid PIT amount –
PIT payable according to tax settlement
If the result of this formula is positive, it is an overpaid
amount, and the taxpayer can ask for a refund of the excessive
amount.
On the other hand, if the result is negative, it is an underpaid
amount, and the taxpayer will have to pay the difference amount to
the tax agency.
After businesses or individuals carry out the PIT refund
calculation and figure out the amount needed to be refunded, they
need to submit their PIT refund dossiers to the tax agency.
After receiving the refund dossier, within 06 working days from
the date of receipt of complete tax refund dossiers, tax agencies
are responsible for handling PIT refund procedures according to
Clause 3, Article 58 of Circular No. 156/2013/TT-BTC.
If the subjects of inspection are under the group following the
‘inspection first, tax refund later’, the tax agency will
have 40 working days from the date of receipt of the PIT refund
dossier to finish the PIT refund procedures.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
POPULAR ARTICLES ON: Tax from Vietnam
Bi-Monthly Tax Newsletter
Phoenix Legal
The Supreme Court, in M/s Apex Laboratories Pvt. Ltd. v. Deputy Commissioner of Income Tax, held that the expenses incurred by pharmaceutical companies towards…
Decoding The Constitutional Provisions Behind GST
Economic Laws Practice
Undisputedly, the core recognition of the 101st Amendment is associated with the introduction of the GST which resulted in subsuming of a number of indirect taxes into a unified GST, levied by the Union Government and the State Governments.