Readers' questions
A company with head office and branch said: In 2024, the company settled personal income tax (PIT) on behalf of authorized employees, resulting in excess tax payment. Specifically, the branch has a surplus of 3 million VND, the head office has a surplus of 10 million VND, a total of 13 million VND.
In the personal income tax declaration period of the first quarter of 2025, the company has declared and allocated the correct tax amount to the head office and branches. However, when paying the tax, the company deducted all 13 million VND from the head office's obligations.
From there, the company asked the question:
Is it right or wrong to deduct all excess taxes paid to the head office?
If so, when making a detailed list of personal income tax payments in place of personal income tax according to Official Letter 828/TCT-KK dated February 25, 2025, how should it be declared to match the payment form and information of each individual to be offset?
If so, how should it be handled to submit a detailed list in accordance with regulations?
Tax authority's answer
The Tay Ninh Provincial Tax Department said that, based on Circular No. 80/2021/TT-BTC dated September 19, 2021, the allocation, declaration and payment of personal income tax for units with headquarters and branches must comply with the following principles:
When paying salaries, the company deducts personal income tax, prepares a tax declaration file according to form 05/KK-TNCN with appendix 05-1/PBT-KK-TNCN to allocate tax to each locality where the employee works.
Enterprises pay personal income tax to the state budget for each province in accordance with Clause 4, Article 12 of Circular 80/2021/TT-BTC.
At the end of the year, when settling, the company did not re-determine the allocated tax amount, but provided information on the tax payment on behalf of each individual according to the instructions in Official Letter 828/TCT-KK.
For the excess payment, the company has 2 solutions:
Ex deducted from the personal income tax arising in the following period, but only in the case of the same sub-sector and the same area collecting the budget with the excess payment.
Proposal to return according to the provisions of Article 42 of Circular 80/2021/TT-BTC.
Thus, the company is not allowed to deduct all excess payables from the branch to the head office if it does not collect the budget from the same location. Enterprises need to comply with regulations on tax obligations allocation and make a detailed list according to the form, ensuring that it matches each individual to be offset.
