Personal Income Tax (PIT) was implemented for the first year of 2009 when the State firstly issued plenty of polices to exempt, reduce, relax, and return of tax. On the other hand, in line with administrative procedure reforms of personal income tax, Finance Ministry issued Circular No. 20 to guide some additional and amendments to personal income tax. The amendments included combination of personal income tax declaring forms and the 30% reduction of administrative procedures. Therefore, organizations and individuals face difficulties in finalizing their tax in 2009.
To clear this obstacle or helping the tax finalization to be finished at least by May 31st, Binh Duong Tax Bureau Vice Chief Huynh Dinh Tri said:
- When finalizing tax for the year 2009, organizations and individuals should be noticed of taxing periods. Accordingly, tax statements should include the period of July 1st, 2009 to December 31st, 2009. Declaration for this period of time is only required in terms of turnover, incomes, reduction, and exemption. As for personal income from salary, only taxed income is stated for this period of time.
Identification of income from salary which is tax free should be in line with Circular No. 160/2009/TT-BTC of Finance Ministry with notice of tax finalization of the same paying institution.
Tax reduction is applicable even if taxpayers submit proving documents later that tax finalization.
- In case, are the incomes of employees in the first six months of 2009 being exempted from tax? For incomes paid in the period of 2008-2009 but tax was paid in the last 6 months of 2009, does tax finalization required?
- The former case (due to subjective conditions) which made employees receive their incomes earned in the first 6 months of 2009 in the period of July 1st to December 31st 2009 is exempted from tax. Otherwise, the income is taxed and included in tax finalization for 2009.
- How about one-time bonuses in 2009 for employees who fully worked for 12 months? And bonuses to employees who failed to work fully (due to birth time), is the tax exempted for their bonuses?
- As for one-time bonuses in 2009 who worked 12 months to the fullest, half of the bonuses are exempted from tax (not required to finalize), the rest will be taxed and be stated in tax finalization in 2009. As for those who failed to work for the whole 12 months, their bonuses will be divided into the months they worked to reduce tax.
- For the calculation of deductions for family circumstances, social insurance, and health insurance, what the tax finalization will be? How is the submission procedure?
- The calculation of deductions for family circumstances, social insurance, and health insurance is as follows:
Staying individuals earning their incomes from business, salary, and wages are only required to state the income and payable tax for the last 6 months of 2009 and corresponding deductions. The tax finalization will be deducted by 50% of total amount for one-time payments to social insurance, healthcare insurance, and compulsory responsibility insurance. Monthly payments will be accordance with real payments in the last 6 months of 2009.
Deductions for family circumstances are applicable for the last 6 months of 2009. As for charity donations, the deductions are calculated basing on real donations in the last 6 months of 2009.
The submission of tax finalization documents will be made directly to tax agencies or through data transmission through the internet with clear-cut destination or mail.
Currently, Vietnam Tax has constructed guidelines and applications to support tax finalization including software instructing document procedures and statements to finalize income tax, bar code printing and data extraction to be transmitted to tax agencies. Guidelines and supporting software can be found for free at http://www.tncnonline.com.vn.
- Thank you!
Reported by Thanh Hong – Translated by Vi Bao
