Personal income tax (PIT) is a significant financial obligation for both employees and businesses in Vietnam. Adequate preparation is essential. personal income tax deduction certificate Filing taxes correctly not only helps comply with the law but also ensures the rights of taxpayers, especially in cases of tax refunds or income verification.
This article will provide detailed instructions on how to prepare. personal income tax certificate and do personal income tax return A legitimate method for employees to self-declare their taxes and for accountants to process tax documents for the business.
1. What is Personal Income Tax?
Personal income tax (PIT) is a direct tax applied to individuals' income from salaries, wages, business, investment, real estate transfers, and other sources as stipulated in the regulations. Article 3, Law on Personal Income Tax No. 04/2007/QH12 (amended and supplemented by) Law No. 26/2012/QH13 , and Law No. 71/2014/QH13Accurate personal income tax declaration helps employees prove their legitimate income and avoid legal risks.
2. What is a Personal Income Tax Deduction Certificate?
Personal income tax deduction certificate This is a document issued by the organization or individual paying the income (business, agency) to the employee, recording the amount of personal income tax that has been withheld from taxable income. Article 21, Circular 92/2015/TT-BTCThis document serves the following role:
- Proof of tax paid when performing the transaction. personal income tax return.
- This serves as the basis for requesting a tax refund if the amount of tax withheld exceeds the amount of tax payable.
According to the Clause 2, Article 25 of Circular 111/2013/TT-BTCThe organization paying the income must issue documentation upon individual request, in the following specific cases:
- Individuals with employment contracts of 3 months or more: Have the right to request a certificate for each deduction.
- For individuals with contracts under 3 months: The organization issues one document for the entire tax period.
Furthermore, if the income-paying organization has ceased operations, the tax authorities will process the tax return based on the database without requiring supporting documents.
According to the Clause 1, Article 32 of Decree 123/2020/ND-CPThis document includes the following information:
- Document name, form symbol, serial number.
- Name, address, and tax identification number of the payer and the recipient.
- Nationality (if the recipient is not a Vietnamese citizen).
- Income amount, payment date, total taxable income, tax withheld, remaining income.
According to the Clause 4, Article 3 of the same decreeThe documents can be in paper or electronic form, and from July 1, 2022, businesses are required to switch to using electronic documents as per regulations. These are essential documents for employees who self-declare their taxes or for accountants who process taxes for businesses.
3. Personal Income Tax Declaration Procedure for Individuals
Employees declare their personal income tax through the General Department of Taxation's electronic tax system at canhan.gdt.gov.vn. The process includes:
- Log in using your tax identification number.
- Select “Tax Settlement”, then “Online Declaration”, and use form 02/QTT-TNCN. Circular 80/2021/TT-BTC.
- Check the automatically filled personal information, select the option (1 source of income, 2+ sources, or only income after deductions).
- Fill in the information, export the XML file via iTax Viewer, submit online, print two copies, sign and submit along with your ID and withholding tax certificate.
The deadline for 2024 is May 2nd, 2025 (due to April 30th, 2025 being a public holiday), but it is recommended to complete it before April 30th, 2025 to avoid delays.
Documents to Prepare
|
Type of Document |
Describe |
|
Personal Income Tax Return Form |
Form 02/QTT-TNCN, issued herewith Circular 80 / 2021 / TT-BTC. |
|
Appendix for personal deductions |
Form 02-1/BK-QTT-TNCN, if there are dependents. |
|
Copy of tax deduction certificate |
Withholding tax certificate (form 03/TNCN), issued by the income-paying organization. |
|
Bank statements (if any) |
If taxes have already been paid abroad. |
|
Charitable donation receipt (if any) |
Proof of contributions to humanitarian funds, scholarships, etc. |
If the income-paying organization has ceased operations, the tax authorities will process the claim based on the database, without requiring a withholding certificate, according to the National Public Service Portal.
4. Filing Personal Income Tax Returns for Businesses
Businesses are responsible for deducting personal income tax from employee salaries and remitting it to the tax authorities.
Issue withholding tax certificates (form 03/TNCN) to employees, according to Decree 123/2020/ND-CP.
- Declare monthly/quarterly using form 05/KK-TNCN.
- If authorized, finalize tax returns using form 05/QTT-TNCN and submit it before the end of March of the following year, as follows: Points a and b, Clause 2, Article 44 of the Law on Tax Administration 38/2019/QH14 , and Circular 80/2021/TT-BTC.
5. Documents proving income and taxable income
In addition to the tax deduction certificate, individuals need to prepare:
- Proof of income documents: Employment contracts, payslips, income verification documents, especially for income from multiple sources.
- Documents proving taxable income: Lease agreements, invoices, and receipts for business income and expenses.
- Use software like iTaxViewer to export the XML file.
6. Important Notes When Preparing Documents and Filing Declarations
To avoid errors, employees and accountants should take note of the following:
- Check the deduction certificate.Lack of this document will make it difficult to prove the amount of tax paid. This is an important requirement when having income other than salary, as it helps tax authorities verify it.
- Accurate calculationEnsure that non-taxable income (e.g., maternity benefits) is excluded and that deductions are calculated correctly. Carefully check the information on the declaration form before submitting it, ensuring it matches the supporting documents.
- Comply with deadlinesLate filing of tax returns may result in administrative penalties as stipulated in the regulations. Decree 125/2020/ND-CP.
- Keep a copy: Prepare copies of documents and declarations for verification when the tax authorities conduct an audit.
7. Conclusion
Preparation personal income tax certificate and do personal income tax return Compliance with regulations is a key factor in helping both employees and businesses abide by the law and protect their rights.
With the detailed instructions and legal basis cited in this article, it is hoped that employees who self-declare their taxes and accountants who process tax documents will perform this task efficiently and accurately. Always carefully check documents and adhere to deadlines to avoid unnecessary risks!