Situation Description:

Mr. A signed an employment contract with company X in June 2023 and has additional income exceeding 10 million VND/month. Mr. A authorised company X to settle taxes on his behalf. However, after reviewing the situation, Mr. A discovered that he must settle taxes directly with the tax authority due to this additional income. In this case, what should Mr. A do?

1. Legal Basis

Important legal regulations on PIT that you should be aware of include:

• Decree No. 123/2020/ND-CP dated October 19, 2020: Regulations on the issuance, management, and use of invoices and documents.
• Decree No. 126/2020/ND-CP dated October 19, 2020: Detailed regulations on several articles of the Tax Administration Law.
• Official Letter No. 636/TCT-DNNCN dated March 12, 2021 and Official Letter No. 883/TCT-DNNCN dated March 24, 2022 from the General Department of Taxation: Specific guidance on PIT settlement.

2. Important Legal Provisions on PIT Refund

Tax deduction documents: When an organisation deducts PIT, it must issue a tax deduction document to the taxpayer. However, if the individual has authorised the organisation to settle taxes on their behalf, the organisation does not need to issue the tax deduction document.

Conditions for authorising tax settlement:

• An individual can authorise an organisation to settle taxes if they meet the following conditions:
  • Signed a labour contract of at least 3 months with an organisation and is still employed at the time of the tax settlement.
  • Has temporary income (income outside the primary workplace) not exceeding 10 million VND/month and has had PIT deducted at a rate of 10%. This income does not require a separate tax settlement.

3. Handling Cases Where Tax Settlement Was Authorised but Must Be Done Independently

In cases where an individual has authorised an organisation to settle taxes but later finds that they must directly settle taxes with the tax authority:

• The tax-deducting organisation does not need to adjust the tax settlement already made.
• The organisation will issue a tax deduction document so that the individual can carry out the tax settlement independently, as required.

4. Important Notes for Taxpayers

• Carefully check the status of your income and the conditions before deciding to authorise an organisation to settle taxes.
• Keep all relevant documents and records to facilitate the tax settlement process.
• If you encounter difficulties in the tax refund process, contact the tax authority or professional tax consultancy units for assistance.

Personal income tax refunds not only help ensure your rights but also demonstrate your responsibility toward your tax obligations to the state. Mastering these regulations will help ensure a smooth and swift tax refund process!