Latest Updates on Tax Declaration and Settlement Deadlines for 2022

Abbreviation Glossary

- PIT: Personal Income Tax
- EEs: Employees
- Enterprises: Businesses

Information on the deadlines for Personal Income Tax Declaration and Settlement in 2022

1. Entities required to settle Personal Income Tax in 2022

According to Official Letter 636/TCT-DNNCN, entities required to settle tax include:

- Individuals directly settle tax matters with the tax authorities.

+ Residents with income from salary or wages, if there is additional tax to be paid or excess tax paid, propose offsetting it in the next tax period.

+ Individuals present in Vietnam for less than 183 days (calculated in the first calendar year), but for a continuous 12-month period from the first day in Vietnam, it is considered 183 days or more. The first tax settlement period is 12 continuous months from the first day present in Vietnam.

+ Foreign individuals terminating work contracts in Vietnam settle taxes with the tax authorities before leaving the country. If tax settlement procedures have not been completed, authorization can be given to organizations handling income or other entities/individuals to settle taxes.

+ Resident individuals with income from salary or wages, while eligible for tax reduction due to natural disasters, fire, accidents, or serious illnesses affecting tax payment capacity, do not delegate the authority to organizations or individuals to settle taxes on their behalf. They must directly file tax settlements with the tax authorities.

- Organizations settling income from salary or wages

These organizations will handle tax settlements and personal income tax settlements without distinguishing whether there are tax deductions or not on behalf of individuals with delegation.

2. Tax filing and personal income tax settlement deadline for 2022

2.1 Deadline for 2022 Personal Income Tax Filing

As per the 2019 Tax Management Law and Article 19 of Circular 80/2021/TT-BTC, the deadline for personal income tax filing is outlined as follows:

- For periodic filings: no later than the 10th day from the date of tax liability occurrence.

For example:

+ Individual income from lottery winnings, where the organization paying the prize deducts personal income tax before awarding it, and tax filing occurs for each winning occurrence.

On March 1, 2022, Mr. A won a lottery prize of 100 million VND, marking the date of personal income tax obligation. The latest tax filing date is March 10, 2022.

+ Resident individuals with income from foreign-sourced salaries or wages; non-resident individuals with income generated in Vietnam but paid from abroad; individuals receiving income from International Organizations, Embassies, Consulates in Vietnam without tax deduction; individuals receiving bonus shares directly => File personal income tax for each occurrence.

- For monthly filings: No later than the 20th day of the following month after the tax liability occurrence.

For example:

If a company pays monthly salaries to employees who are responsible for personal income tax, the company will deduct the personal income tax before paying the salary to the employees. Tax filing is the responsibility of the company.

In February 2022, if there is a personal income tax obligation, the latest tax filing deadline is March 20, 2022.

- For quarterly filings: No later than the last day of the first month of the next quarter after the tax liability occurrence.

Applicable in cases:

+ Individuals with income from salary or wages directly file taxes with the tax authorities and choose to file taxes quarterly.
+ Companies choose quarterly personal income tax filing for employees:

For example: In February 2022 (Q1), if there is a personal income tax obligation, the latest filing date is April 30, 2022 (the last day of the first month of Q2).

- For annual filings: No later than the last day of the first month of the Gregorian calendar year or fiscal year.

2.2 Deadline for 2022 Personal Income Tax Settlement

Based on Points a and b of Clause 2, Article 44 of the 2019 Tax Management Law, the deadline for personal income tax settlement in 2022 is determined as follows:

- For individuals settling personal income tax directly: The latest deadline is April 30, 2022.
- For individuals authorizing companies to settle personal income tax: The latest deadline is March 31, 2022.

3. Authorization for Personal Income Tax Settlement in 2022

Resident individuals with income from salary or wages authorize companies to settle personal income tax if:

- Case 1:

+ Have an employment contract lasting 3 months or more at a location and are actively working there when the company settles income tax. Authorization is allowed even if not working for 12 months in the Gregorian calendar.
+ If an individual is transferred from the old organization to a new one. The new organization, resulting from a merger, consolidation, division, separation, or conversion of the same type of business entity between the old and new organizations, is authorized to settle tax for the new organization.

For example: Mr. A signed an employment contract for 1 year from September 2021 to September 2022 with X Corporation. As of March 1, 2022, he is still working at the company. On March 20, 2022, X Corporation settles personal income tax, and Mr. A authorizes X Corporation to settle personal income tax on his behalf because:

+ He has a signed employment contract with the company for a period of 1 year.
+ At the time of X Company settling taxes, he is still employed with the company.

- Case 2:

+ Holds an employment contract lasting 3 months or more at a location and is actively working there when the company settles income tax, including cases of not working for 12 months in the Gregorian calendar;
+ Simultaneously has irregular income, with an average monthly income not exceeding 10 million VND and has already deducted 10% personal income tax if there is no tax settlement request for this income.

4. Frequently Asked Questions

4.1 Can working for 2 companies authorize personal income tax settlement in 2022?

According to Clause 6, Article 8 of Decree 126/2020/ND-CP and Official Letter 636/TCT-DNNCN, individuals with income from salary or wages must sign an employment contract lasting 3 months or more at a location and be actively working there at the time of tax settlement to authorize tax settlement.

=> Therefore, in the case of working for 2 companies, individuals are not allowed to authorize personal income tax settlement for 2022 and must perform tax settlement on their own.

4.2 Penalties for Late Personal Income Tax Filing

- Personal income tax filing must adhere to the prescribed deadlines; in case of delays, penalties for administrative violations will be imposed under Article 13 of Decree 125/2020/ND-CP.

- The following is a summary table of penalties applied to organizations failing to file personal income tax on time, with individual fines set at 1⁄2 of the stated penalty amount.

4.3 Dealing with Cases Where Companies Settle Personal Income Tax for Individuals Without Authorization

What should be done if a company has settled personal income tax for an individual without proper authorization?

Answer:

According to Official Letter 636/TCT-DNNCN, if a company has settled personal income tax for an individual with authorization and later discovers that the individual qualifies for direct tax settlement with the tax authorities:

- The company pays the income without adjusting the personal income tax settlement.

- The company only issues tax deduction certificates for individuals based on the settlement amount and notes in the bottom left corner of the tax deduction certificate: 'Company ... has settled personal income tax on behalf of Mr./Ms. ... (as authorized) at line (sequence number) ... of Appendix 05-1/BK-TNCN' for individuals to directly settle taxes with the tax authorities.

4.4 Sample Authorization Form for 2022 Personal Income Tax Settlement

Individuals authorized to settle personal income tax can use the form 08/UQ-QTT-TNCN Authorization Form for Personal Income Tax Settlement issued with Circular 80/2021/TT-BTC.