Notes when authorizing personal income tax settlement in 2024

Authorized subjects for personal income tax settlement

According to Point d, Clause 6, Article 8 of Decree 126/2020/ND-CP, resident individuals with income from salaries and wages authorize tax settlement to organizations and individuals paying income, specifically as follows:

- Individuals with income from salaries and wages who sign labor contracts for 3 months or more at one place and are actually working there at the time the organization or individual paying the income makes tax settlement, including cases where they do not work for 12 full months in a year.

In case an individual is an employee transferred from an old organization to a new organization due to the old organization merging, consolidating, dividing, separating, or converting the type of enterprise, or the old organization and the new organization are in the same system, the individual is authorized to settle taxes for the new organization.

- Individuals with income from salaries and wages who sign a labor contract for 3 months or more at one place and are actually working there at the time the organization or individual pays the income and makes tax settlement, including cases where they do not work for 12 months in the year. At the same time, they have irregular income in other places with an average monthly income of no more than 10 million VND in the year and have had personal income tax deducted at a rate of 10% if there is no request for tax settlement for this income.

- Foreign individuals who have completed their employment contracts in Vietnam must declare and settle their taxes with the tax authorities before leaving the country. In case the individual has not completed the tax settlement procedures with the tax authorities, he/she must authorize the income-paying organization or another organization or individual to settle the taxes according to the regulations on tax settlement for individuals.

In case the organization paying income or another organization or individual receives authorization to settle the income, they must be responsible for the additional personal income tax payable or be refunded the excess tax paid by the individual.

Subjects not authorized to settle personal income tax

Pursuant to sub-section 2 Section 3 Official Dispatch 5749/CT-TNCN in 2018, guidance on cases where individuals are not authorized to settle personal income tax is as follows:

- Individuals who meet the conditions for authorization but have been issued personal income tax deduction certificates by the income-paying organization shall not authorize the income-paying organization to make tax settlement (except in cases where the income-paying organization has revoked and canceled the tax deduction certificates issued to the individual).

- Individuals with income from salary and wages who sign a labor contract for 3 months or more at an organization but at the time of authorizing tax settlement are not working at that organization.

- Individuals with income from salaries and wages who sign labor contracts for 3 months or more at a unit, and have irregular income that has not been deducted from tax or has not been deducted enough (including cases where the deduction level has not been reached and the deduction level has been reached but not deducted).

- Individuals with income from salaries and wages who sign labor contracts for 3 months or more in many places.

- Individuals with only occasional income have had tax deducted at a rate of 10% (including cases with occasional income only at one place).

- Individuals who have not registered a tax code.

- Resident individuals with income from salaries and wages who are also eligible for tax reduction due to natural disasters, fires, accidents, or serious illnesses must not authorize tax settlement but must self-declare tax settlement with tax reduction consideration documents attached.

Procedures for authorizing personal income tax settlement in 2024

To authorize the settlement of personal income tax in 2024, taxpayers follow these 2 steps:

- Step 1: Prepare a tax settlement authorization form. To authorize an organization or individual to pay the finalized income on their behalf, the taxpayer must download and fill in all information according to the personal income tax settlement authorization form (form No. 08/UQ-QTT-TNCN issued with Circular 80/2021/TT-BTC).

- Step 2: Send the completed authorization form to the organization or individual paying the income.

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