Tax refund conditions:

–       A tax resident is defined as someone residing in Vietnam for 183 days or more in either the calendar year or a period of 12 consecutive months from the date of arrival.

–       Their paid tax amounts are larger than payable tax amounts;

–       They have paid tax but their taxed incomes do not reach a tax-liable level;

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.

(*) The PIT payable, according to the tax settlement, is calculated using a progressive formula, with rates ranging from five percent (5%) to a maximum of thirty-five percent (35%). Each type of income is subject to its own tax rate.

Conclusion: If you meet the above conditions and after calculation, the overpaid Personal Income Tax (PIT) amount is positive, you can request a refund of the excess tax paid to the tax authority. However, if the result is negative, you will have to pay the shortfall amount to the tax authority.