Personal income tax refund is the process by which the tax authorities return any excess tax you have paid compared to your actual tax liability, usually done after the annual tax settlement. This is especially important for individuals who have left their jobs, overpaid taxes, or accountants who need to assist employees with the procedure.
This article will provide detailed instructions on how to claim a personal income tax refund, the eligibility requirements, and related procedures, including online methods, with the latest updates.
1. Conditions for Receiving a Personal Income Tax Refund
According to Clause 2, Article 8 of the Personal Income Tax Law 2007, you are entitled to a tax refund in the following cases:
- The amount of tax paid is greater than the amount of tax due: This often occurs when income comes from multiple sources or when deductions are not fully accounted for during the provisional tax payment process.
- Individuals who have paid taxes but whose taxable income is below the threshold for tax payment: For example, if after calculation, your taxable income is lower than the tax-free threshold (VND 132 million/year for yourself, plus VND 52,8 million/year for each dependent), but you have had tax deducted, you can request a refund.
- Other cases as decided by the competent state authority: These are special cases, such as support policies from the tax authorities.
In addition, to be eligible for a tax refund, you must:
- They have a personal tax identification number and are registered with the tax authorities.
- Submit a tax refund request, as the tax authorities will not automatically issue a refund without a request.
2. How to Calculate Personal Income Tax Refund
To calculate your tax refund, you need to compare the total tax paid during the year with the tax payable after final settlement. Here are the detailed steps:
- Calculate the total taxable income for the year: This is the total income from salary and bonuses, after deducting tax-exempt items (such as interest on bank deposits, gifts between relatives).
- Calculate the total of deductions: Include:
-
- Personal deductions: 11 million VND/month x 12 = 132 million VND/year.
- Deductions for dependents: VND 4,4 million/person/month x number of dependents x 12 = VND 52,8 million/year for each dependent.
- Mandatory insurance contributions (Social Insurance 8%, Health Insurance 1,5%, Unemployment Insurance 1%).
- Charitable contributions and voluntary pension funds are subject to regulations.
- Calculate taxable income: Taxable income = Total taxable income – Total deductions.
- Calculate the amount of tax payable: Apply a progressive tax rate schedule to taxable income, as shown in the following table:
|
Taxable income/year (million VND) |
Tax rate (%) |
|
Go to 60 |
5 |
|
On 60 to 120 |
10 |
|
On 120 to 216 |
15 |
|
On 216 to 384 |
20 |
|
On 384 to 624 |
25 |
|
On 624 to 960 |
30 |
|
On 960 |
35 |
Example: If taxable income is 150 million VND, the tax payable = 5% * 60 + 10% * (120 – 60) + 15% * (150 – 120) = 3 + 6 + 4,5 = 13,5 million VND.
- Calculate the tax refund amount: Tax refund amount = Total tax paid – Tax payable. If the result is positive, you are entitled to a tax refund.
Illustration:
Let's say you earn 15 million VND/month, work for 12 months, have one dependent, and the company deducts 11 million VND from your monthly income for tax purposes:
- Monthly income: 15 million, deductions: 11 million, taxable income: 4 million, tax withheld: 5% * 4 = 0,2 million/month, total tax paid: 2,4 million VND.
- Final settlement: Total income 180 million, deductions 132 (self) + 52,8 (1 dependent) = 184,8 million, taxable income = 180 – 184,8 = -4,8 million < 0, tax payable = 0.
- Amount refunded = 2,4 – 0 = 2,4 million VND.
3. Procedures for Personal Income Tax Refund
There are two main methods for doing this. personal income tax refund procedure, depending on whether you authorize your employer to handle your tax filing or file it yourself:
3.1. Through the Employer
- Subject of applicationIndividuals authorize their employers (businesses, organizations) to handle their tax settlements on their behalf.
- The Franchising Process:
- Employers will compile and settle personal income tax for all employees.
- An individual's overpayment of taxes will be offset against another individual's underpayment of taxes within the same unit.
- If, after offsetting, there is still an excess tax amount, the business can carry this amount forward to the next period or request a refund from the tax authorities if the individual so desires.
- Important noteThis method is typically applied to employees who are still working at the company.
3.2. Direct Decision-Making with the Tax Authority
- Applicable objects: Individuals who self-declare their taxes, such as former employees or those with multiple sources of income.
To claim a tax refund, you need to follow these steps, according to Circular 80/2021/TT-BTC:
- Prepare the documents:
- Personal Income Tax Final Settlement Declaration Form (Form 02/QTT-TNCN).
- Personal income tax deduction certificates (documents issued by the company).
- Request for refund of state budget revenue (Form 01/DNHT).
- Documents proving deductions (if any, such as birth certificates for dependents).
- Submit application:
- Submit directly: Go to the local tax office and pay at the taxpayer support department.
- Submit online: Through the gate canhan.gdt.gov.vnTo do this, you need an electronic tax account. If you don't have one yet, register through the National Public Service Portal or directly at the tax office.
- Track your progress and receive your results:
- After submitting your application, you can track its status through the portal or contact the tax authorities.
- The processing time for tax refunds typically ranges from 6 to 40 working days, according to Article 75 of the 2019 Tax Administration Law.
Note: From 2025, according to Decision 108/QD-TCT dated January 24, 2025, there will be an automatic tax refund process for certain cases, such as individuals directly settling their taxes with a request for a refund of overpaid taxes. You need to check on the tax portal to see if you are eligible.
4. Online Personal Income Tax Refund
To process your tax refund online, you need to ensure you have registered for electronic tax transactions before proceeding. To register an account, you can do so through the National Public Service Portal or directly at the tax office, ensuring that your personal information is consistent.
And follow these steps:
- Log into canhan.gdt.gov.vn Using your tax identification number and password.
- Select "Tax Settlement" > "Online Filing".
- Fill in the information on form 02/QTT-TNCN; the system will automatically fill in some information based on the available data.
- Submit the tax return and attach supporting documents (tax deduction certificates, tax reduction documents).
- Enter the OTP code to confirm and track your application status through the system.
Note:
- Make sure you have registered your tax identification number and have an account on the tax portal to avoid problems.
- Carefully check the information in the tax return, especially income, deductions, and the amount of tax paid, to avoid errors that could lead to the denial of a tax refund.
- Keep tax deduction receipts and related documents, such as employment contracts and dependent birth certificates, as proof.
- Submit your tax return on time, usually after the tax settlement (before April 30th each year for individuals who settle their taxes directly), to avoid penalties.
- If you have any questions, contact the tax authority via hotline or visit them in person for guidance, especially in complex cases.
5. Deadline for Submitting Personal Income Tax Refund Applications
Although the law does not specify a fixed deadline for claiming a tax refund, the application is usually submitted during the annual tax filing period, i.e. before April 30th of the following year for individuals who self-declare their tax returns (according to Article 28 of Circular 111/2013/TT-BTC). If there is a delay, you can still submit the claim, but you need to check the validity period of the tax refund (usually 2 years from the date of overpayment).
6. Processing Time for Personal Income Tax Refunds
According to the Article 58 of the Law on Tax Administration No. 38/2019/QH14:
- Refund first, audit later: 6 working days.
- Check first, refund later: 40 working days.
7. Conclusion
Personal income tax refunds are your right if you have overpaid taxes, helping to protect your personal financial interests. By understanding the conditions, calculation methods, and procedures, you can carry out this process effectively, especially with the support of online systems and new automated processes from 2025. Check if you are eligible to claim a refund and follow the instructions above to ensure your rights are protected.