PIT Finalization 2025: Who Must Settle Personal Income Tax?

According to the guidance of the Ho Chi Minh City Tax Department in Official Letter No. 2015/CTTPHCM-TTHT dated February 27, 2025, the individuals required to finalize personal income tax for the year 2025 include the following cases:

Conditions for Individuals Required to Self-Finalize PIT

Resident individuals must directly finalize personal income tax (PIT) with the tax authority if they fall into one of the following cases:

1. Earning Income from Multiple Sources
   • Receiving salaries or wages from two or more employers during the year.
   • Not meeting the conditions to authorize tax finalization through the income-paying organization.
2. Tax Difference after Finalization
   • Having additional PIT payable.
   • Having overpaid PIT and requesting a refund or offset to the following year.
3. First-Year Residents or Foreigners
   • In the first year, if the individual is present in Vietnam for fewer than 183 days but reaches at least 183 days within 12 consecutive months from the first arrival date → the first tax finalization period will be calculated based on these 12 consecutive months.
   • Foreigners who terminate their labor contracts in Vietnam must finalize PIT before departure. If unable to do so, they must authorize another organization/individual to finalize on their behalf.
4. Special Income Not Subject to Tax Withholding
   • Individuals earning wages or salaries paid by foreign organizations, international organizations, embassies, or consulates in Vietnam without tax withholding during the year.
5. Tax Reduction Cases
   • Resident individuals eligible for tax reduction due to natural disasters, fires, accidents, or critical illnesses.
   • These cases cannot be authorized; the taxpayer must finalize directly with the tax authority.

Conditions for Organizations/Individuals Paying Income to Finalize PIT

Organizations and individuals paying salaries or wages are responsible for filing PIT finalization in the following cases:

1. General Obligation
   • Regardless of whether tax withholding arises, organizations/individuals must still submit PIT finalization dossiers.
   • Conduct tax finalization on behalf of employees who have authorized them.
2. Special Cases
   • Where the authorized individual has additional tax payable of ≤ VND 50,000 (exempted) → the organization must still declare the individual’s information but does not need to include the tax amount in the aggregated report.
   • If employees are transferred due to mergers, consolidations, splits, divisions, or business type conversions within the same system → the new organization must finalize PIT on their behalf (including income from the previous entity).
   • If an organization finalized PIT before Decree No. 126/2020/ND-CP took effect, no retroactive application is required.
3. When Changing Business Status
   • Enterprises undergoing dissolution, bankruptcy, termination of operations, or contract termination must finalize PIT up to the termination date.
   • If the enterprise converts its business type (except for equitization of state-owned enterprises) and the new enterprise inherits all tax obligations → PIT finalization up to the conversion date is not required, only year-end finalization is performed.

Conditions for Individuals Eligible to Authorize PIT Finalization

Resident individuals may authorize their income-paying organization to finalize PIT if they meet the following conditions:

1. Labor Contract
   • Having a labor contract of at least 3 months at one workplace.
   • Still working at the time the organization conducts finalization, even if not employed for the full 12 months.
   • If employees are transferred due to mergers, consolidations, splits, divisions, or business conversions within the same system → they may authorize the new organization.
2. Additional Freelance Income outside the Main Employer
   • Earning extra irregular income from other sources with an average monthly amount ≤ VND 10 million/year.
   • This income has already been subject to 10% withholding tax at source.
   • The individual does not request separate finalization for this income.
3. Errors Arising after Authorization
   • If, after the organization has finalized on their behalf, it is discovered that the individual is required to self-finalize → the organization only needs to issue a tax withholding certificate and is not required to adjust its submitted finalization dossier.