NOTES ABOUT FINALIZATION OF PERSONAL INCOME TAX IN 2024 TO AVOID BEING FINED UP TO 25 MILLION VND

LEGAL BASIS

Law on Tax Administration 2019

Decree No. 126/2020/ND-CP

Official Dispatch No. 636/TCT- DNNCN 

Circular No. 80/2021/TT-BTC

 

  1. When to submit personal income tax finalization?
  • For annual tax finalization documents: no later than the last day of the third month from the end of the calendar year or fiscal year.
  • For annual tax returns: no later than the last day of the first month of the calendar year or fiscal year
  • For personal income tax finalization documents of individuals directly finalizing taxes: no later than the last day of the fourth month from the end of the calendar year.
  • For flat tax declaration documents of business households and individuals using the flat tax method: no later than December 15 of the immediately preceding year.

Thus, the duration for declaring and finalizing personal income tax for income earned in 2023 is as follows:

  • If an individual with income from salary or wages authorizes tax finalization to the organization or individual paying the income, the deadline is March 31, 2024 at the latest.
  • If an individual who has income from salary or wages directly finalizes personal income tax with the Department of Taxation, the deadline is April 30, 2024 at the latest.
  1. Who must conduct personal income tax finalization?
  1. Organizations and individuals pay salaries and wages.
  2. Authorized personal income tax finalization: Employees have signed a three-month labor contract or more and are working at the workplace.
  3. Individuals directly conduct finalization with the Department of Taxation, including:
  • If there is a tax amount payable/overpaid, request a refund/offset in the next tax declaration period, except in the following cases: The tax amount payable after finalization of each year is under 50,000 VND; The tax payable is less than the tax created and does not require tax refund or offset in the next period; … 
  • Be in Vietnam for under 183 days (calculated in the first calendar year) and 183 days or more calculated in 12 consecutive months from the first day of presence in Vietnam.
  • Foreigners whose working contracts have ended in Vietnam must settle taxes before leaving the country…
  1. Pine for late finalization of personal income

Be Warned or fine with the lowest fine being 02 million VND and the highest fine being 25 million VND, specifically as follows:

  • A warning shall be imposed for submitting tax declaration documents 1-5 days beyond the deadline and there are extenuating circumstances.
  • Fine from 2,000,000 to 5,000,000 VND for submitting tax declaration documents 1-30 days late, except for the cases in Clause 1 of this Article.
  • Fine from 5,000,000 VND to 8,000,000 VND for submitting tax declaration documents 31 days to 60 days beyond the prescribed time limit.
  • Fine from 8,000,000 – 15,000,000 VND for one of the following acts:

+ Submit tax declaration documents from 61 to 90 days beyond the prescribed time limit;

+ Submit a tax declaration 91 days or more beyond the prescribed time limit, but not incurring tax payable;

+ Not submit tax declaration but no tax payable arises;

+ Not submit appendices according to regulations on tax administration for enterprises with associated transactions along with corporate income tax finalization documents.

  • Fine from 15,000,000 – 25,000,000 VND for submitting tax declaration more than 90 days after the tax declaration deadline and resulting in tax payable.

Late payment interest rate = 0.03%/day calculated on the late payment tax amount

01day late payment interest = 0.05% x Late payment amount

  1. What does a personal income tax finalization document include?

For individuals declaring personal income tax settlement directly with the Department of Taxation, personal income tax finalization documents include:

+ Personal income tax finalization declaration, form 02/QTT-TNCN

+ Appendix of list of family deductions for dependents, form 02-1/BK-QTT-TNCN

+ Copies of documents proving the amount of tax deducted, temporarily paid during the year and the amount of tax paid in another country (if any)

+ Copy of Tax Withholding Certificate

+ Copies of invoices and documents proving contributions to charity funds, humanitarian funds, and study promotion funds (if any)

+ Documents proving the amount of money paid by the unit or organization paying income abroad in case the individual receives income from international organizations, Embassies, Consulates and receives income from foreign countries.

 

Personal income tax finalization documents for organizations, individuals paying income

+ Personal income tax finalization declaration, form 05/QTT-TNCN

+ Appendix detailed list of individuals eligible for tax calculation according to the partially progressive schedule, form 05-1/BK-QTT-TNCN

+ Appendix detailed list of individuals eligible for tax calculation according to full tax rate, form 05-2/BK-QTT-TNCN

+ Appendix detailed list of dependents for family deductions, form 05-3/BK-QTT-TNCN