The implementation of income commitments is currently regulated and guided in Point i, Clause 1, Article 25 of Circular 111/2013/TT-BTC on tax deductions for some other cases as follows:
Article 25. Tax deduction and tax deduction documents
1. Tax deduction
…
i) Tax deduction for some other cases
Organizations and individuals who pay wages, remuneration, and other expenses to residential individuals who do not sign labor contracts (according to the instructions in Points c, d, Clause 2, and Article 2 of this Circular) or sign labor contracts for less than three (03) months with a total income payment of VND two million (2,000,000) or more must deduct tax at a rate of 10% on income before paying to individuals.
In case the individual has only one income subject to tax deduction according to the above rate but the estimated total taxable income of the individual after deducting household income is not yet up to the level of tax payment, the individual with income must make a commitment (according to the form issued with the document on tax management) to the income payment organization to organize the income payment as a temporary basis for not deducting personal income tax.
Based on the commitment of the income recipient, the income payment organization does not deduct tax. At the end of the tax calculation year, the income payment organization must still compile a list and income of individuals who have not reached the tax deduction level (on the form issued with a document guiding tax management) and submit it to the tax authority. Individuals who make a commitment must be responsible for their commitment, in case of detecting fraud, they will be handled according to the provisions of the Law on Tax Administration.
Individuals who make a commitment according to the instructions in this point must register for tax and have a tax code at the time of commitment.
Thus, according to the above regulations, the conditions for making a commitment to form 08/CK-TNCN are as follows:
- Individuals residing without signing a Labor Contract or signing a Labor Contract for less than 3 months.
- With a total income payment of 02 million VND/time or more.
- Estimated total taxable income of individuals after deducting household income not to the extent of tax payment
- Individuals with only one income subject to personal income tax deduction at a rate of 10% per calendar year up to the time of commitment.
- Having completed tax registration procedures and been granted a tax code at the time of making the commitment.
