Công văn 187/TCT-TNCN của Tổng cục Thuế về việc hướng dẫn quyết toán thuế thu nhập cá nhân năm 2012

THE MINISTRY OF FINANCE
THE GENERAL DEPARTMENT OF TAXATION

Official Dispatch No. 187/TCT-TNCN dated January 15, 2013 of the General Department of Taxation guiding the final declaration of personal income tax 2012

To: Departments of taxation of central-affiliated cities and provinces

The final declaration of personal income tax is specified in the Law on Personal income tax, the Government s Decree No. 187_TCT-TNCN dated September 08th 2009, specifying a number of articles of the Law on Personal income tax, the Circular No. 84/2008/TT-BTC dated September 30th 2008 of the Ministry of Finance, the Circular No. 62/2009/TT-BTC dated March 27th 2009 of the Ministry of Finance, the Circular No.  02/2010/TT-BTC dated January 11th 2010 of the Ministry of Finance; the Government s Decree No. 101/2011/NĐ-CP dated November 04th 2011, the Circular No. 154/2011/TT-BTC dated November 11th of the Ministry of Finance, the Circular No. 140/2012/TT-BTC dated August 21st 2012 of the Ministry of Finance, the Circular No. 28/2011/TT-BTC dated February 28th 2011 of the Ministry of Finance, and the guiding documents of the General Department of Taxation. In order to ensure the uniform implementation of laws, the General Department of Taxation guides the final declaration of personal income tax 2012 as follows:

I. The subjects that make final tax declarations

1. The income payer must deduct tax whether the tax is deducted nor not.

2. A resident that earns income from wages and private business shall make final personal income tax declaration if:

- The tax payable is higher than the deducted tax or initially paid tax;

- The excess tax is refunded or offset against the tax in the next period.

3. A resident that earn income from securities transfer, who has registered with the tax authority for paying personal income tax at 20% on the assessable income, shall make final tax declaration in the following cases:

- The tax payable at 10% (reduced by 50%) is higher than the initially deducted tax at 0.05% (reduced by 50%) on the securities transfer price.

- The excess tax is refunded or offset against the next period.

4. A resident being a foreigner that stops working in Vietnam before leaving Vietnam.

When a resident being a foreigner stops working in Vietnam and make final tax declaration before December 31st, then comes back to Vietnam and works until the end of the year, that individual shall make the final declaration of the tax on the taxable income from January 1st to December 31st.

Example 1. Mr. X starts working in Vietnam on February 05th 2012, and stops working on August 31st 2012. Mr. X stays in Vietnam more than 183 days from January 05th 2012 to the day of departure. Before leaving, Mr. X makes the final declaration of the tax on his taxable income from January 01st 2012 until the end of August 31st 2012. On September 15th 2012, Mr. X comes back to Vietnam and works until the end of 2012. Thus Mr. X shall make the final declaration of the tax on his taxable income from January 01st 2012 until the end of December 31st 2012.

II. Delegating the final tax declaration:

1. When a individual that earns income from his or her wages under a long-term contract (more than 03 months) from only one place in a calendar year is requested to make final tax declaration, he or she may delegate the wage payer to make the final tax declaration on his or her behalf, even he or she has not worked for full 12 months.

2. This individual shall be issued with the tax deduction documents from the income payer (unless the income payer has withdrawn and destroyed the tax deduction documents issued to that individual); when a individual that does not sign the labor contract, or signs a labor contract that lasts under 03 months, or sign a service contract that has been deducted by 10% or 20% (including the income earned from one place) is requested to make final personal income tax declaration, he or she shall make the final tax declaration without delegating it to the wage payer.

Example 2. Mr. A is an individual that has a number of articles and sign a service contract with company X in 2012. Company X has deducted 10% from Mr. A’s income. In 2012, Mr. A only earns income from the company X. At the end of this year, if Mr. A is requested to make the final personal income tax declaration, he shall make the declaration himself without delegating company X to make it on his behalf.

III. Calculation of taxable income

1. For income from wages

1.1. The taxable income from wage equals to sum of wages and other incomes guided in Clause 2, Section II, Part A of the Circular No. 84/2008/TT-BTC; Article 1 of the Circular No. 62/2009/TT-BTC; Article 1 of the Circular No. 02/2010/TT-BTC; received by the tax payer in 2012

The time for calculating the taxable income is the time that individual receives income from wages from the income payer.

Example 3. The wages arising before December 2012 being paid to a tax payer on January 2013 shall be included to the taxable income in 2013 to make final tax declaration in 2013.

1.2. When a individual earns post-tax income (net income), the taxable income calculation is guided in the Official Dispatch No. 1578/TCT-TNCN dated April 28th 2009, and the Official Dispatch No. 3565/TCT-TNCN dated September 14th 2010 of the General Department of Taxation.

2. Income from securities transfer

The taxable income from securities transfer is the total taxable income from the ticker symbols transferred in a year.

The taxable income from each ticker symbol equals the securities sale price minus the purchase prices and expenses related to the transfer.

The purchase price of each ticker symbol is calculated as follows:

Cost price during the period = purchase price + purchase expense

IV. Personal exemptions

The subjects eligible for personal exemptions and deductions for calculating assessable income are specified in Section I, Part B of the Circular No. 84/2008/TT-BTC; Article 2 and Article 3 of the Circular No. 62/2009/TT-BTC; Article 4 of the Circular No. 02/2010/TT-BTC.

1. A individual shall be entitled to exemptions for dependants from the month when the custody arises, and the personal exemption is claimed. A foreigner residing in Vietnam shall be given personal exemption for that person and his dependants from January to the month when that person leaves Vietnam.

When the custody arises in the year, and the individual fails to claim the personal exemption on time, or the personal exemption is claimed when the tax is settled, the personal exemption shall be included in the monthly tax deduction from the month in which the personal exemption is claimed; when making final tax declaration, the exemption for dependants shall be calculated from the month when the custody arises.

Example 4.

- Mr. A has to raise a child on January 2012 but does not register for the personal exemption until March 2012. Mr. A shall be granted personal exemption when calculating initial tax deduction from March 2012. At the end of the year when making final tax declaration, Mr. A shall be granted personal exemption from January 2012.

- Mr. A has to raise a child on January 2012 but does not claim the personal exemption until March 2012. Mr. A is not given personal exemption when calculating initial tax deduction. Mr. A claims the exemption for dependants at the end of the year when making final tax declaration; he shall be given exemption for dependants from January 2012.

2. When the workplace of a individual is changed, that individual shall send the new workplace a photocopy of the document proving the dependant which is certified by the previous workplace, when claiming the personal exemption for dependants.

V. Calculating the amount of tax payable

1. For residents earning income from wages or private business

2. A individual of whom the average assessable income from wages and private business reaches level 1 of the progressive tariff (≤ 5 million VND) is exempted from tax in the last 06 months of 2012.

Individual shall calculate the personal income tax after deducting the exempted tax from item [32] – Tax arising in the period in the final personal income tax declaration form No. 09/KK-TNCN issued with the Circular No. 28/2011/TT-BTC.

EXAMPLE 5: Taxable income from wages of Mr. A in 2012 is 166.2 million VND.

Mr. A has the following exemptions in 2012:

- Personal exemption = 48 million VND (4 million VND x 12 months)

- Exemption for a dependant = 19.2 million VND (1.6 million VND x 12 months)

- Social insurance and health insurance 3 million VND

The assessable income of Mr. A in 2012 = 166.2 million VND – (48 million VND + 19.2 million VND + 3 million VND) = 96 million VND.

Average monthly assessable income = 96 million VND : 12 months = 8 million VND per month

Average monthly tax payable = (5 million VND x 5%) + (3 million VND x 10%) = 0.55 million VND

Whole-year tax = 0.55 million VND x 12 months = 6.6 million VND

Example 6. The assessable income from wages of Mr. B in 2012 is 36 million VND.

- Average monthly assessable income of Mr. B = 36 million VND : 12 months = 3 million VND.

- Personal income tax payable = (3 million VND x 5%) x 12 months = 1.8 million VND

- Personal income tax payable after exempted tax is deducted = 1.8 million VND – 0.9 million VND = 0.9 million VND.

3. For income from securities transfer

Individual shall calculate the personal income tax after deducting the exempted tax from item [26] – Tax payable in the period - in the final personal income tax declaration form No. 13/KK-TNCN issued with the Circular No. 28/2011/TT-BTC.

VI. Procedure for making final personal income tax declaration

1. The final tax declaration made by income payers:

1.1. The final declaration dossier:

Specified in Point c, Clause 4, Article 14 of the Circular No. 28/2011/TT-BTC, and:

- The wage payer shall add a personal income tax exemption annex according to the form No. 27/MT-TNCN enclosed with the Circular No. 140/2012/TT-BTC (if any).

- The payer of income from capital investment and securities transfer shall add a personal income tax exemption annex according to the form No. 25/MGT-TNCN enclosed with the Circular No. 154/2011/TT-BTC dated November 11th 2011 of the Ministry of Finance.

1.2. The places where the final declarations are submitted are specified in Point d, Clause 4, Article 14 of the Circular No. 28/2011/TT-BTC.

1.3. The deadline for submitting the final tax declarations is April 01st 2013.

2. The final tax declaration made by traders and groups of traders that pay tax as declared.

2.1. For traders

2.1.1. The final tax declaration of a trader is specified in Point a.2, Clause 5, Article 14 of the Circular No. 28/2011/TT-BTC, together with a personal income tax exemption annex according to the form No. 26/MT-TNCN enclosed with the Circular No. 140/2012/TT-BTC (if any).

2.1.2. The final tax declaration shall be submitted at the governing Sub-department of Taxation.

a. When the trader does business in multiple locations, the final tax declaration shall be submitted at the Sub-departments of taxation where the claim the personal exemption.

b. When the trader runs a insurance agent, lottery agent, or network marketing business that has been registered, the final tax declaration shall be submitted at the Sub-departments of taxation where the business is run.

c. When the trader runs a insurance agent, lottery agent, or network marketing business without registration, the final tax declaration shall be submitted at the Sub-departments of taxation where the trader resides (where the permanent or temporary residence is registered).

2.1.3.The deadline for submitting the final tax declaration is April 01st 2013.

2.2. For groups of traders

2.2.1. The final tax declaration is specified in Point a.2, Clause 5, Article 14 of the Circular No. 28/2011/TT-BTC, together with a personal income tax exemption annex according to the form No. 26/MT-TNCN enclosed with the Circular No. 140/2012/TT-BTC (if any).

2.2.2. The final tax declaration shall be submitted at the governing Sub-department of Taxation.

2.2.3.The deadline for submitting the final tax declaration is April 01st 2013.

3. Final tax declarations made by residents earning incomes from wages

3.1. The final tax declaration dossier is specified in Point b.2, Clause 6, Article 14 of the Circular No. 28/2011/TT-BTC, together with the personal income tax exemption annex according to the form No. 26/MT-TNCN enclosed with the Circular No. 140/2012/TT-BTC (if any).

3.2. The places where final tax declarations are received:

3.2.1. A individual that receives wages from one location only may delegate the final tax declaration to the wage payer as guided in Point 3.3 of this Article.

3.2.2. When a individual earns wages from at least 02 locations:

+ The final tax declaration shall be submitted to the tax authority that regulates the workplace where the personal exemption was calculated. If the workplace is changed in the year, the final tax declaration shall be submitted to the tax authority that regulates the last wage payer.

+ If a individual has not claimed the personal exemption at any workplace, the final tax declaration shall by submitted to the Sub-departments of taxation where such individual resides (where the permanent or temporary residence is registered).

3.2.3. If the individual does not sign a labor contract or signs a labor contract that lasts under 3 months, or signs a service contract of which the income from one or multiple locations is reduced by 10% or 20%, the final tax declaration shall be submitted to the Sub-departments of taxation where the individual resides (where the permanent or temporary residence is registered)

3.2.4. When a individual earns wages and directly make monthly tax declarations, the final tax declaration shall be submitted at the Department of Taxation where the monthly tax declarations are submitted.

Example 7. Mr. A is a manager of a representative office of a foreign company in Vietnam and earns income from abroad. From January 01st 2012 to September 21st 2012, Mr. A works in Hanoi and make tax declarations at the Department of Taxation of Hanoi. From September 01st 2012, Mr. A moves to work in Binh Duong province and make tax declarations at the Department of Taxation of Binh Duong province. Thus the final tax declaration in 2012 of Mr. A shall be submitted to the Department of Taxation of Binh Duong province.

3.2.5. The determination of the places where the final tax declaration made by individuals that only earn income from wages on the personal income tax management system

- For the individuals that have made final tax declarations 2011, the tax authority shall decide that the place that receives the final tax declaration 2012 of the individual is the place that receives the final tax declaration 2011 on the personal income tax management system.

- If an individual does not have the final tax declaration 2011, or the place that receives the final tax declaration in 2012 is different from that in 2011: the tax authority shall check the place that receives the final tax declaration from the individual. If the individual complies with the guidance in Points 3.2.1, 3.2.2, 3.2.3, 3.2.3, and 3.2.4 of this Clause, the personal income tax management system shall automatically send information to the tax authority that receives the final tax declaration from the tax payer.

3.3. If the individual only earns income from wage from a wage payer in 2012, the final personal income tax declaration shall be delegated to the wage payer. The individual that delegates the tax declaration to the wage payer must submit the following papers to the wage payer:

- The written delegation of final personal income tax declaration according to the form No. 04-2/TNCN enclosed with the Circular No. 28/2011/TT-BTC.

- The photocopies of the documents proving the exemptions such as receipts of charitable contributions (if any).

3.4. The deadline for submitting the final tax declaration is April 01st 2013.

4. The final tax declaration applicable to individuals that earn income from both wages and private business.

4.1. The declaration dossier is specified in Point b.1, Clause 7, Article 14 of the Circular No. 28/2011/TT-BTC, together with the personal income tax exemption annex according to the form No. 26/MT-TNCN enclosed with the Circular No. 140/2012/TT-BTC (if any).

4.2. The places where declarations are submitted:

The final tax declaration shall be submitted at the Sub-department of Taxation as guided in Point 2.1.2 of this Section.

4.3. The deadline for submitting the final tax declaration is April 01st 2013.

5. The final tax declaration applicable to the individuals that earn income form securities transfer.

5.1. The tax declaration dossier

is specified in Point b, Clause 10, Article 14 of the Circular No. 28/2011/TT-BTC, together with a personal income tax reduction annex according to the form No. 25/MGT-TNCN enclosed with the Circular No. 154/2011/TT-BTC.

5.2. The places where declaration dossiers are submitted are specified in Point c, Clause 10, Article 14 of the Circular No. 28/2011/TT-BTC.

5.3. The deadline for submitting the final tax declaration is April 01st 2013.

VII. Tax refund

The refund of personal income tax is specified in Article 26 of the Circular No. 28/2011/TT-BTC dated February 28th 2011 of the Ministry of Finance

1. When a individual directly make final tax declaration at the tax authority, the excess tax shall be refunded or offset against the tax declared in the next period at the tax authority where the final tax declaration is submitted.

Example 8. In 2012, Mr. A earns income from wages and his private business, and he has made final tax declaration directly at the Sub-departments of taxation of Ba Dinh district – Hanoi city (where he runs his business). The excess tax shall be refunded to Mr. A or offset against the tax declared in Q1 2013 (on the income from private business) at the Sub-departments of taxation of Ba Dinh district – Hanoi city.

Example 9. In 2012, Mr. A earns income from wages paid by company X in Vietnam and wages from abroad. The final tax declaration is directly made at the Department of Taxation of Hanoi (the Department of Taxation that regulates company X). The excess tax shall be refunded to Mr. A or offset against the tax declared in the next month in 2013 (on the wages paid from abroad) at the Department of Taxation of Hanoi.

Example 10. In 2012, Mr. A earns income from securities transfer, and he makes final tax declaration directly at Department of Taxation of Ho Chi Minh city. The excess tax shall be refunded to Mr. A or offset against the tax payable in the tax declaration 2013 made at Department of Taxation of Ho Chi Minh city.

2. If a individual does not have a tax code in 2012, and has a tax codes when making final tax declaration, the tax is also refunded as prescribed.

VIII. The application of information technology serving the final personal income tax declaration.

1. The plan for upgrading the IT applications prescribed in the Circular No. 140/2012/TT-BTC:

1.1. The applications to be upgraded: Declaration support, Online declaration, Final Personal Income Tax Declaration, Personal Income Tax Management.

1.2. Upgrade contents:

1.2.1. Declaration No. 09/KK-TNCN

- Enclosed the Annex No. 26/MT-TNCN with the Declaration. All information in Annex No. 26/MT-TNCN is automatically taken from Annex No. 09/KK-TNCN. Do not change the items in this Annex.

- Do not print bar codes on the Declaration No. 09/KK-TNCN in 2012 (similarly to other Annexes enclosed with the Declaration). Support exporting to Excel.

- For Declaration Support and Personal Income Tax Management applications: export to excel 2003; import files in Excel 2003 format to Online Declaration application of the General Department. At the data center: import files in Excel 2003 and 2007 format to the Personal Income Tax Management system via the website.

- Support the calculation of the items on the Declaration relevant to the exempted or reduced tax according to the formula in Clause 2, Section V of this Official Dispatch, in particular:

+ Declaration No. 09/KK-TNCN:

* Item [32] Tax arising in the period:

If item [31] ≤ 60 million VND, then [32] = [31]/number of declared months x progressive tax rate x (number of declared months – number of exempted months)

If item [31] > 60 million VND, then [32] = [31]/number of declared months x progressive tax rate x number of declared months.

* Item [37] Total reduced tax in the period = {[32]x([24]/[22])}x50%.

+ Annex No. 26/MT-TNCN:

 [06]: Tax payable before exemption = item [31] in the Declaration No. 09/KK-TNCN/number of declared months x progressive tax rate x number of declared months.

 [07]: Exempted tax = item [31] in the Declaration No. 09/KK-TNCN/number of declared months x progressive tax rate x number of exempted months.

 [08]: Outstanding tax after exemption = [06] – [07] = [32] in the Declaration No. 09/KK-TNCN.

1.2.2. Declaration No. 05/KK-TNCN

- The Declaration Support and Final Personal Income Tax Declaration applications: enclosed Annex 27/MT-TNCN with the declaration. All information in Annex No. 27/MT-TNCN is automatically taken from the information about the delegation of final tax declaration in the statement No. 05A/BK-TNCN in which the assessable income reaches level 1. Do not change the items in this Annex.

- Do not print the bar code on the Annex enclosed with the Declaration No. 05/KK-TNCN in 2012 (similarly to other Annexes). The declaration exported in the excel format must include the declaration and Annex 05A/BK-TNCN, 05B/BK-TNCN. Annex 27/MT-TNCN only support exporting and printing information about the number of individuals eligible for tax exemption and the total exempted personal income tax. Detailed lines in Annex 27/MT-TNCN is still supported when making declaration on the declaration support application. At the database center: import files in the Excel 2003 and 2007 format in Personal Income Tax Management system via the website.

- Support the calculation of the items on the Declaration relevant to the exempted or reduced tax according to the formula in Clause 2, Section V of this Official Dispatch, in particular:

* Declaration No. 05A/KK-TNCN: item [19]: Tax payable.

If [16] ≤ 60 million VND, then [19] = {[19]/12 x progressive tax rate x 6} -  {[16]/12 x progressive tax rate x 6 x ([12]/[11]) x 50%}.

If [16] > 60 million VND, then [19] = {[19]/12 x progressive tax rate x 12} - {[16]/12 x progressive tax rate x 12 x ([12]/[11]) x 50%}.

+ Exemption annex No. 27/MT-TNCN:

 [10] Assessable income of the individual that delegates the final tax declaration that is eligible for tax exemption = [16] in the statement No. 05A/BK-TNCN.

 [11]: Deducted personal income tax of the individual that delegates the final tax declaration that is eligible for tax exemption = [17] in the statement No. 05A/BK-TNCN.

 [12]: tax payable before exemption of a individual = {[16] in the statement 05A/KK-TNCN/12 x tax rate in the progressive tariff x 12} – {[16] in the statement 05A/KK-TNCN/12 x progressive tax rate x 6 x ([12] in statement 05A/KK-TNCN/[11] in statement 05A/KK-TNCN) x 50%}.

 [13] exempted tax  = [16] in statement 05A/BK-TNCN/12 x progressive tax rate x 6.

 [14] = [12]-[13]= [19] in statement 05A/KK-TNCN.

2. The personal income tax management system is deployed nationwide in October 2012. This is an important and efficient basis for tax authorities to process final tax declaration data and personal income tax refund in 2012. The General Department of Taxation request the Departments of Taxation to receive, verify, certify, and transmit the data about personal income tax declaration to the final personal income tax declaration database at the General Department (according to the process trained by the General Department of Taxation in 2009) in order to completely record the declarations in the personal income tax management system as the basis for processing and checking the information about final personal income tax declaration at tax authorities.

The General Department of Taxation requests the Departments of Taxation to disseminate, instruct, and expedite the local final personal income tax declaration based on this document and the law-guiding documents.

For the Director

Deputy Director

Cao Anh Tuan