In the context of Vietnam’s growing economy, tax collection is an important part of ensuring financial resources for the state. Personal income tax (PIT) is one of the important taxes, and according to Decree No. 126/2020/ND-CP, organizations and individuals paying income from wages and salaries must pay PIT.
1. In which case must personal income tax finalization?
If an individual earns income from salary or wages and has signed a labor contract at one place for a period of 03 months or more, he/she must finalize PIT.
Even if you don’t work for 12 months of the year, the individual is still responsible for paying taxes.
In addition, if an individual is an employee who moves from the old organization to the new organization due to merger, consolidation, division, separation or transformation of the type of business, the individual will be authorized to finalize the tax for the new organization.
2. Regulations on finalization of personal income rental for individuals with incomes from salaries or wages and current income
If the individual has income from salary or wages at one place for 03 months or more and also has a current income from other places not exceeding 10 million VND in the year and has withheld tax at the rate of 10 %, must also finalize PIT
In this case, the individual initially authorized the actual finalization of the loss, but then decided to directly finalize the tax with the tax authority.
In this case, the income paying organization does not revise its PIT finalization. The organization will issue another document instead
3. Finalization of PIT for other entities?
In addition to the above two cases, there are also a number of other entities that also issue PIT finalization. Here are some examples:
Individuals who are owners of individual businesses, households, individuals doing self-employment, production and business activities with incomes from business activities, production, profits, rentals, goods or services, bonuses, remuneration, profit sharing from cooperative activities and other sources of income.
Individuals who have income from dividends, benefits from joint stock companies or limited liability companies with which they have dong rental houses, parking lots, shops)
Individuals earning income from securities, real estate, buying and selling and transferring assets
Individuals earning income from teaching, coaching, compiling books, articles and activities on arts, culture, and sports.
Individuals earning income from exploitation of natural resources such as mining ore, stone, sand, clay, wood.
The above are just some common examples, there are many other cases that also have to finalize PIT according to the provisions of Vietnamese tax law.
PIT finalization is an important responsibility of individuals and organizations contributing to the national financial resources. Failure to comply with regulations and tax finalization can lead to undesirable legal and social consequences. Therefore, make sure you understand and implement. Use PIT regulations to avoid legal risks.
- Regulations on penalties for PIT violations
In case of violation of regulations on PIT finalization, the Law on Taxation of Vietnam has the following provisions and penalties:
+ Fine: tax authorities have the right to apply a fine as a percentage of the unpaid or late payment. The fine level is usually determined according to the provisions of the applicable tax law.
+ Penalties for administrative violations: in addition to fines, tax authorities may impose other administrative penalties such as deprivation of the right to withhold, tax refund, and administrative penalties for taxpayers and related tax officials. .
+ Tax withholding: in case of violation of PIT regulations, tax authorities have the right to apply tax withholding measures. This means that the unpaid or late payment will be deducted from other taxes that the taxpayer will have to pay in the future.
+ Criminal handling: in case of serious violations, there are signs of criminal violations, the tax authorities may transfer the dossiers to the procedural agencies for consideration and handling according to the provisions of law.
Thus, through the article on Pham Consult, I have introduced to you more clearly about the finalization of personal income tax and the subjects that have to fulfill tax obligations for this type of tax. If you have any questions, please contact Pham Consult!