Personal Income Tax
Personal income tax is a direct tax levied on an individual’s income received during a specific tax period. It is used to regulate income, consumption, and savings, contributing to social equity and reducing income disparities between high- and low-income earners in society.
It also serves as a crucial and stable source of revenue for the state budget. The revenue from personal income tax on salaries and wages has consistently increased over the years. In 2022, personal income tax revenue reached a peak of VND 166,000 billion. In 2024, the projected personal income tax revenue is VND 159,124 billion.
According to the provisions of Law on Tax Administration No. 38 dated June 13, 2019, the General Department of Taxation (GDT) stated that the period for taxpayers to file their personal income tax returns is March and April of each year.
For personal income tax filings in 2023, organizations and individuals paying income should note that the latest deadline is the last day of the third month following the end of the calendar year. However, since the last day of the third month after the end of the 2023 calendar year falls on Sunday, March 31, 2024, the personal income tax filing deadline for organizations and individuals paying income is April 1, 2024.
For individuals filing their personal income taxes directly, the deadline is the last day of the fourth month following the end of the calendar year. The last day of the fourth month after the end of the 2023 calendar year is April 30, 2024, and the following day is May 1, 2024 (a holiday).
“Therefore, the latest deadline for individuals to file their personal income taxes directly is May 2, 2024,” the GDT announced.
“In cases where taxpayers ‘fail to submit a tax return or submit a tax return after 90 days from the deadline for submitting a tax return or from the deadline for submitting an extended tax return’, it is considered one of the acts of tax evasion, which, depending on the circumstances, will be subject to a fine of 1 to 3 times the amount of tax evaded, as prescribed by law.”
In cases where individuals have a personal income tax refund but fail to file their tax returns within the prescribed period, no administrative penalties will be imposed for the late filing of tax returns.
If the taxpayer has paid the full amount of tax and late payment fees to the state budget before the tax authority issues a decision to conduct a tax audit or inspection, or before the tax authority issues a record of the late filing of a tax return, the taxpayer will be subject to a fine for the violation of the deadline for filing a tax return, with a fine ranging from VND 15 million to VND 25 million.
If the amount of the fine calculated in accordance with this clause is greater than the amount of tax payable on the tax return, the maximum fine in such cases shall be equal to the amount of tax payable on the tax return but not less than the average of the fine range of VND 8 million to VND 15 million.
In addition, the taxpayer must pay the full amount of late tax payment to the state budget in cases where the taxpayer’s late filing of a tax return results in late payment of tax and late filing of a tax return and its attachments to remedy the consequences.
“In cases of ‘failure to file a tax return but no tax liability’, a fine of VND 8 million to VND 15 million will be imposed,” the GDT clarified.
As for personal income tax returns, the GDT stated that organizations and individuals paying income from salaries and wages are responsible for filing tax returns and filing on behalf of individuals authorized by the organization or individual paying the income, regardless of whether there are any tax deductions. In cases where an organization or individual does not pay any income, they are not required to file personal income tax returns.
Furthermore, the State has stipulated four cases where individuals with income from salaries and wages are not required to file personal income tax returns.
Firstly, individuals with additional personal income tax payable after the settlement of each year of VND 50,000 or less. Individuals are exempt from tax in this case and can self-determine the amount of tax exempted, are not required to file personal income tax returns, and are not required to file tax exemption applications.
Secondly, individuals with personal income tax payable less than the tax already provisionally paid and who do not request a refund or offset in the subsequent tax filing.
Thirdly, individuals with income from salaries and wages who have signed labor contracts for 03 months or more with one entity and simultaneously have occasional income from other sources with an average monthly income during the year not exceeding VND 10 million and have had personal income tax deducted at a rate of 10% are not required to file a tax return for this portion of their income, unless requested.
Fourthly, individuals whose employers purchase life insurance (excluding voluntary pension insurance), other non-compulsory insurance with an accumulation of insurance premiums, and the employer or insurance company has deducted personal income tax at a rate of 10% on the amount of insurance premiums corresponding to the portion purchased or contributed by the employer for the employee, then the employee is not required to file a personal income tax return for this portion of their income.
“Therefore, in order to avoid violating tax regulations, particularly for individuals filing personal income tax returns directly, taxpayers should take note of and strictly adhere to the current legal regulations,” the GDT advised.
