Workers' concerns
Recently, the General Department of Taxation posted a question from taxpayer Ms. N.T.N.Y, asking about issues related to Personal Income Tax (PIT) refund.
Ms. Y said that from January to September 2023, she worked at Company A (where she was entitled to personal deductions). From October 2023 to early 2024, she transferred to Company B (without registering for personal deductions). Most recently, she signed an official contract with Company C, where she was entitled to personal deductions.
It is worth mentioning that Company C has its head office in Ho Chi Minh City but has a branch in Hanoi. The employee himself signed a contract with the parent company (headquartered in Ho Chi Minh City), but the company's personal income tax declaration was allocated to both the Ho Chi Minh City Tax Department and the Hanoi Tax Department.
"I'm not sure when I prepare the final settlement documents for 2023, do I need to submit them to the Ho Chi Minh City Tax Department or the Hanoi Tax Department?", Ms. Y wondered.
Guidance from tax authorities
According to the response document of the Ho Chi Minh City Tax Department and based on the regulations at:
Point b.2, Clause 8, Article 11, Decree 126/2020/ND-CP (detailed guidance on a number of articles of the Law on Tax Administration); Official Dispatch No. 4172/TCT-DNNCN dated September 20, 2023 of the General Department of Taxation:
Employees who have income from salaries and wages from two or more places, change their workplace during the year, and if the organization that pays the last income has family deductions, must submit tax settlement documents to the tax authority that manages the organization that pays the last income.
In case at the time of tax settlement, the employee does not register for personal family deduction (or at any organization), he/she must submit the application to the tax authority where he/she resides.
In case at the time of tax settlement, the employee is being deducted for family circumstances at the organization paying the income, the tax settlement dossier must be submitted to the tax authority managing that organization.
So where to submit when the company has many branches?
The complication arises when the final company (where the employee is registering for deduction) is headquartered in one locality but has a branch or business location in another locality.
In the case of Mrs. Y:
Company C signed a contract with her and registered for personal family deduction at its headquarters in Ho Chi Minh City.
The company's tax declaration and payment are still managed by the Ho Chi Minh City Tax Department (even when the company has a branch in Hanoi and the company allocates taxes to the branch).
According to the tax authority, individuals whose income is deducted by the company and registered for family deduction at the head office must settle with the tax authority managing that company (ie the Ho Chi Minh City Tax Department). The company's allocation of tax obligations to branches does not change the general tax authority managing personal income tax.
In other words, only when you sign a direct labor contract with a branch and register for family deductions at the branch, you will be under the management of the tax authority where the branch is located. If you sign a contract with the parent company and have family deductions at the parent company (even though you actually work at the branch), you will submit the finalization dossier to the tax authority that manages the parent company.
Why pay in the right place?
Determining where to submit personal income tax settlement documents is extremely important, because:
Tax refund benefits: If you overpay or qualify for a refund, you need to submit it to the correct tax authority to avoid wasting time transferring documents between localities.
Avoid mistakes and legal troubles: Filing to the wrong tax authority can lead to delays, incorrect information, and possible warnings or administrative sanctions (if filing is late compared to the deadline).
Notes when settling personal income tax in 2023 - 2024
Collect complete tax deduction documents from companies you have worked for during the year.
Check the time and location of your family deduction registration. If you are deducting somewhere at the end of the year, you will most likely do the procedure at the tax office that manages that business.
In case you quit your last job at the company before the settlement date, or do not register for deduction anywhere, you will submit your application to the tax authority where you reside.
Note the deadline for submitting documents: Normally, the deadline for submitting personal income tax finalization falls at the end of March of the following year (for individuals who self-finalize). If submitted late, there may be a late payment penalty according to Decree 125/2020/ND-CP.
Recommendations for workers
Information lookup: Employees can look up family deductions, tax deduction status, tax paid amount... on the tax industry's electronic information portal (https://thuedientu.gdt.gov.vn).
Contact the company accountant promptly: To determine the calculation of family deductions and settlement procedures.
Ask a tax expert/representative if you have any doubts, especially if you work in two or more places, move between provinces or between branches.
Ms. Y’s story shows the great need for specific and transparent guidance around determining where to submit personal income tax finalization dossiers for employees who change jobs during the year. In fact, the legal regulations are relatively clear, but the fact that businesses have headquarters and branches in many localities still easily causes confusion about where to submit dossiers.
To ensure their rights and avoid trouble, employees should carefully study the guidance documents of the tax authorities, discuss with the accounting and human resources department at work, and proactively prepare documents and papers to complete tax settlement on time.
