PERSONAL INCOME TAX (PIT) FINALIZATION
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PERSONAL INCOME TAX (PIT) FINALIZATION
Presented by : Finance & Accounting 30 March 2012
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Contents
Who are subject to PIT finalization?
Kinds of PIT & Tax assessment period
Preparing tax finalization file
1
2
3
4 Deadline submission
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1. Who are subject to PIT finalization?
AND
1- Lower tax payment2- Excess tax refund (optional)3-Foreigners before getting out of VN
Resident individual
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1. Who are subject to PIT finalization?
Staying in VN(12 consecutive months) >= 183 days
Having a residential location
Having lease contract (house,hotel..) >=90days
Add Your TitleAdd Your TitleORResidential Residential individualindividual
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2. Kinds of PIT and Tax assessment period
1.Salary income
1.Capital investment & transfer
2. Real property transfer
3.Winnings or prizes
4.Royalties or Franchises
5.Inheritances or gift
Annual tax assessment period
Taxable Taxable incomeincome
Each occasion when income arise
2. Biz income
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2. Kinds of PIT & tax assessment period
Annual tax assessment period
Example :
1) Mr. A came to VN since 02 July 2011 (183 days)
Tax assessment year 2011 from 1st Jan to 31st Dec 2011
2) Mr. B came to Vn since 3 July 2011 (182 days)
* 1st tax assessment year : 3rd July 2011~ 2nd July 2012
* 2nd tax assessment year : 1st Jan 2012 ~ 31 Dec 2012
1st2nd
3/7/2011 2/7/2012
1/1/201231/12/2012
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3. Preparing tax finalization files
5mil IncomeIncome
Definitions
4.5=5-0.5 (meal allowance) Taxable incomeTaxable income
(income- non-taxable income(income- non-taxable income))
0.5mil=4.5mil-4mil (personal deduction) Assessable incomeAssessable income
(Taxable income-deductions)(Taxable income-deductions)
0.05mil=0.5mil*10% (tax rate) TaxTax
(Assessable (Assessable income*% tax rate)income*% tax rate)
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3. Preparing Tax finalization files
Income : business + salary (wages)
Income receivable by employees from employers in monetary or non-monetary forms
- Insurance fee which the law doesn’t require employers buy for employees
- Membership fees for individuals : sport, artistic… clubs
- Other services for individuals in healthcare activities, entertainment, sports and aesthetics
- Housing allowance paid by the employer but not exceeding 15% of total taxable income.
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3. Preparing Tax finalization files
Non-taxable income:
– Night shift or overtime salary payable which is higher than the day shift or normal working hours salary.
– One-off relocation allowance for expatriates coming to reside in Vietnam.
– Airfares for one round trip home leave for expatriates a year.
– School fees for children of expatriate employees up to high school level.
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3. Preparing Tax finalization files
Non-taxable income (Cont):
– Meal allowance in cash to the employees (not excess of the stipulated amount)
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3. Preparing Tax finalization files
• Deduction for dependents: 1.6m/month/person
• 1. Children (including adopted and illegitimate children )
- Under 18 year-old or - Over 18 year-old : studying at university (college)
or handicapped and unable to work
• 2. Husband ( wife)/ parent or parent- in- law - Above the working age - Still of working age as stipulated by law but
who is handicapped, unable to work
• 3. Grandparents/Brothers and sisters/Brothers in law, sister s in law /Grandchildren, nephews and nieces /Other people required by law
- Tax payer must directly rear or care for and - Above the working age or handicapped and unable
to work
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3. Preparing Tax finalization files
Forms (Circular 28/2011/TT-BTC dated 28/02/2011)
09/KK-TNCN - Declaration of tax finalization
1. 09A/PL-TNCN : Income from Salaries, Wages
2. 09B/PL-TNCN : Income from business
3. 09C/PL-TNCN: Dependent deductions (if dependents were registered)
Appendixes
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3. Preparing Tax finalization files
Taxable incomes(+)
Taxable incomes(+)
Step 1Step 1
Deductions(-)
Deductions(-)
Step 2Step 2
Tax liabilities(=)
Tax liabilities(=)
Step 3Step 3
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3- Step 1. Taxable income
No. Items Amount Notes
1
Total Taxable income [22] =[23+25]
a
Total taxable income in VN, in which
[23] 6A+15B
Total taxable income for consideration of tax reduction
[24] NO
bTotal taxable income outside VN
[25] 8A+19B
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3- Step 2. Deductions
No. Items Amount Notes
2
Deductions [26] [27+28+29+30]
a For tax payer [27] 4mil/1m
b For dependents [28]1,6m/p/m-
Registered
cCharities, humanitarian, study encourage
[29]Established
as regulation
dCompulsory insurances
[30]
Health, social and
unemployed Insurance
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3- Step 3. Tax liabilities
No. Items Amount Notes
3 Total assessable income [31] =[22-26]
4 Tax [32] =[31* tax rate]
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3- Step 3. Tax rate
Tax Bracket
Portion of monthly
Assessable income (mil)
Tax rate (%)
Illustration :
Total assessment income 240mil/year (20mil/m)
1 Up to 5 5 5mil *5%=0.25
2 Over 5 to 10 10 5mil *10%=0.5
3 Over 10 to 18 15 8mil *15%=1.2
4 Over 18 to 32 20 2mil *20%=0.4
5 Over 32 to 52 25Monthly
tax0.25+0.5+1.2+0.4=
2.35
6 Over 52 to 80 30 Total (year)
2.35*12=28.2mil7 Over 80 35
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3- Step 3. Tax liabilities
No. Items Amount Notes
5
Total paid deducted of tax [33] =[34+35+36]
a Deducted [34] 9A+18B
b Paid [35] 12A+17B
cPaid outside VN
(if any)[36]
Max= total tax * outside/total
income
6 Reduction of tax [37]Duplication of tax (1st & 2nd
year)
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3- Step 3. Duplication of tax
1st year : 100 mil PIT2nd year :120 mil PIT Duplication of tax from 1/1->2/7/2012
Tax reduction=100mil*6month/12mon
th = 50 mil
1st2nd
3/7/2011 2/7/2012
1/1/201231/12/2012
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3- Step 3. Tax liabilities
No. Items Amount Notes
7 Tax Payable [38][32-33-37]
>0
8
Excess payment [39] [32-33-37]
>0
a Refund requirement [40]
b Set-off in next period [41]
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4.Deadline submission
90days since day-end of Tax assessment year
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