If organizations and individuals pay salaries and wages, and employees know the circumstances in which personal income tax is not finalised, they do not have to carry out this procedure and do not worry about being fined.

Pursuant to Item d.3 point d Clause 6 Article 8 of Decree 126/2020/ND-CP and Official Letter 636/TCT-DNNCN, if one of the following cases occured, personal income tax will not be finalised:

(1) Organizations and individuals that pay incomes from salaries or wages that do not generate income are not required to make personal income tax finalization declarations. That is, in the personal income tax period, if you do not pay wages or salaries to employees, you are not required to declare personal income tax

Particularly in the case that salaries and wages are paid but no personal income tax withholding is incurred, they must still declare tax finalization according to regulations (paying salaries and wages but not yet paying tax, organizations and individuals must pay tax). Paying salaries and wages is still required to declare and finalize taxes according to regulations).

In addition to the above case, individuals who directly finalize with tax authorities are not required to finalize personal income tax if they fall into one of the following cases:

(2) Individuals whose personal income tax amount to pay more after the final settlement of each year is 50,000 VND or less. Tax-exempt individuals in this case determine the exempted tax amounts themselves, are not required to submit personal income tax finalization dossiers and are not required to submit tax exemption dossiers.

In case the settlement period from 2019 and earlier has been settled before December 5, 2020, it will not be processed retroactively.

(3) Individuals whose personal income tax payable is smaller than the temporarily paid tax amount without request for tax refund or offset in the next tax return period.

(4) Individuals earning incomes from salaries and wages sign labor contracts of 03 months or more at a unit, and at the same time have a monthly average income of not more than VND 10 million in other places in a year and have been Withholding personal income tax at the rate of 10%, if not required, tax finalization is not required for this income.

(5) An individual whose employer buys life insurance (except voluntary retirement insurance), other optional insurance that has accrued premiums deducted by the employer or insurer personal income tax at the rate of 10% on the insurance premium corresponding to the part purchased or contributed by the employer to the employee, the employee does not have to settle for this income.

In addition to the above 5 cases, organizations and individuals that pay salaries and wages, individuals who directly finalize with tax authorities and individuals who authorize personal income tax finalization must declare and submit tax finalization dossiers according to regulations. within the deadline specified in the Tax Administration Law 2019 as follows:

– For income-paying organizations: The deadline for submitting tax finalization declarations is the last day of the third month from the end of the calendar year or fiscal year.

Accordingly, the deadline for declaring and submitting tax finalization documents for the tax period 2021 is 31 March 2022.

– For individuals who directly settle with tax authorities: The deadline for submitting tax finalization dossiers is the last day of the fourth month from the end of the calendar year.

Note: In case the deadline for submitting tax finalization documents coincides with a prescribed holiday, the deadline for submitting tax finalization documents is the next working day (according to Official Letter 636/TCT-DNNCN).

Accordingly, the deadline for declaring and submitting tax finalization documents for income received from salaries and wages in 2021  is no later than 2 May 2022  (should declare and submit tax finalization documents before the holiday) 30 April 2022 to avoid overdue cases.

In addition, in case an individual has a personal income tax refund but is late in submitting a tax finalization declaration as prescribed, no penalty will be applied for administrative violations in filing tax finalization overtime.

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