Individuals required to declare PIT directly to the tax authority are responsible for submitting their PIT finalization returns

1. The following individuals are required to declare PIT finalization directly with Tax Authority:

  • Resident individuals who receive salary and wage income from two or more sources and do not meet the conditions for authorized tax finalization must directly declare their PIT finalization with the tax authorities if there is additional tax payable or if there is an overpaid tax amount to be refunded or offset against the next tax period.
  • Individuals present in Vietnam for less than 183 days in the first calendar year but are present for 183 days or more within 12 consecutive months from the first day of their presence in Vietnam must have their first tax finalization year as the 12 consecutive months from the first day of their presence in Vietnam.
  • Expatriates who terminate their employment contracts in Vietnam must declare their tax finalization with the tax authorities before leaving Vietnam.
  • Resident individuals with income from salaries and wages paid from abroad and resident individuals who receive salary and wage income paid from international organizations or embassies must directly file their PIT settlement.
  • Resident individuals with income from salaries and wages who are also eligible for tax reduction due to natural disasters, fires, accidents, or critical illnesses affecting their ability to pay taxes.

2. Guidance on Administrative sanctions against individuals who fail to declare and finalize their personal income tax (“PIT”)

On 21st December 2023, the General Department of Taxation issued Official Letter No. 5852/TCT-PC providing guidance on administrative sanctions against individuals who fail to declare and finalize their personal income tax (“PIT”). The issuance of the Letter aims to address issues in penalizing tax-related administrative violations for individuals who do not comply with PIT finalization. According to the letter, resident individuals having income from salaries and wages who are directly required to declare PIT to the Tax Authority must submit their PIT declaration return and pay the full amount of PIT to the State Budget.

Individuals who do not submit their PIT declaration return or submits PIT declaration return late for more than 90 days overdue and have outstanding tax payable are determined to have committed tax evasion. However, if a taxpayer submits tax declaration return 90 days overdue, has not yet been issued the record of administrative violations by the tax authority, and voluntarily pays the full outstanding tax amount and interest of late payment to the State Budget, the taxpayer will not be sanctioned for tax evasion. Instead, they will be subject to a penalty for violating tax declaration submission deadlines.

Specific penalties for administrative violations are as follows:

Item 5 Article 13 Decree No. 125/2020/ND-CP regulating on penalty for violating tax declaration submission deadlines

  • A penalty of 15,000,000VND to 25,000,000VND applies for late submission of a tax declaration more than 90 days beyond the deadline, if there is outstanding tax payable and the taxpayer has paid in full the outstanding tax amount and interest of late payment to the State Budget before the tax authority releases a decision on tax audit or tax inspection, or before the tax authority makes a record of late submission of tax declaration as prescribed in Clause 11, Individuals who have salary and wage income who are required to declare personal income tax directly to the tax authority are responsible for submitting their personal
  • In case the penalty amount exceeds the tax amount in the tax declaration return, the maximum penalty is equal to the amount of tax payable in the return but not lower than the average ranges of the tax penalty from VND8,000,000 to VND15,000,000.

Article 17 Decree No. 125/2020/ND-CP regulating on tax evasion

  • A one-time fine equal to the amount of tax evaded shall be imposed on taxpayers with one or more extenuating circumstances who fail to submit a tax declaration or submit it more than 90 days beyond the deadline and there are outstanding tax amount payable and interest that the taxpayer has not paid or paid to the state budget after the tax authority announces the tax audit or tax inspection decision or after the tax authority makes a record of late submission of tax declaration as prescribed in Clause 11, Article 143 of the Law on Tax Administration.

S4BHR provides PIT Finalization assistance services for individuals to ensure compliance with the provisions of the Law on Personal Income Tax.

Please contact us for further information and receiving the entire Official Letter No. 5852/TCT-PC.

S4B Vietnam

  • Address: Unit 701B – 701C, Tower A, Handi Resco 521 Kim Ma Street, Ba Dinh District, Hanoi, Vietnam.
  • Tel: + 84 24 3974 4181
  • Email: service@s4b.com.vn