What is tax settlement? What is personal income tax finalization? These are questions that many investors ask. Because this tax greatly affects net income (final real income). So what are the notes around this issue?
If you are interested in this issue, do not ignore the following article of Personal Broker.
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1. What is tax settlement? What is personal income tax finalization?
1.1. Personal income tax concept
Personal income tax (PIT) is the amount that individuals must deduct from their income. This amount is calculated based on the excess income after deducting other amounts.
PIT is built to ensure social justice. The tax rate is based on the financial ability of each taxpayer. Accordingly, the tax rate will increase gradually according to income. In addition, the State applies deductions for family circumstances. This ensures a reasonable gap between the rich and the poor.
Personal income tax is an important source of state revenue and is applied to all industries.
The subjects that have to fulfill the obligation to pay PIT are:
Residents in Vietnam: taxable income is income generated both inside and outside Vietnam Non-residents: taxable income is income generated in Vietnam only.
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Both residents and non-residents in Vietnam must finalize personal income tax
1.2. What is personal income tax finalization
?Personal income tax finalization is the re-checking of all income and calculating the payable PIT amount based on income level and family circumstances.
Individuals who must make PIT finalization include:
Persons whose income exceeds the prescribed level must pay tax Persons who have income from many different sources Persons whose income is subject to tax
What are the regulations on subjects who must make PIT finalization?
All resident individuals generate income (including wages, salaries, rentals, etc.) If an individual has only one source of income, it is common for the business where the individual works to do it instead. Individuals with multiple sources of income must make their own final settlement with tax authorities on all their incomes, and may not authorize any other organization.
Finalization of personal income tax is based on the amount of income in excess of the taxable income
2. Notes when finalizing personal income tax
In the case of self-finalization of personal income tax, you need to note the following issues:
2.1. What are the documents that need to be prepared for finalization of personal income tax attached: prepare appendix No. 02-1/BK-QTT-TNCN (issued according to circular 92) Documents showing tax has been deducted, paid during the year (both domestic and foreign) – yes Photocopies can be used For individuals who contribute to charity: Need to prepare documents (or photocopies) to prove the contributions. For individuals with income from abroad or international organizations: Proof of these incomes is required
Finalization of personal income tax needs to prepare full records of income and paid taxes
2.2. Where to submit settlement documents
Individuals with a single source of income:
Filed at the Tax Department where the tax return was filed in the year
Individuals with 2 or more sources of income:
Submit a dossier at the tax agency managing the income paying organization/individual for which the individual is entitled to family deduction. If at the time of settlement, the taxpayer has quit his job at that organization. Or, if this person has not yet calculated any deduction for family circumstances in any organization, he/she shall pay tax at the Tax Department where he/she is permanently or temporarily residing. Person who does not have a labor contract or a labor contract of less than 3 months; People who have a lot of income but do not work at any organization at the time of tax payment: pay at the Tax Department where they permanently/temporarily reside.
2.3. Time limit for submission of documents and PIT
According to the provisions of Circular 92/2015/TT-BTC:
Time limit for submission of tax declaration and finalization documents: within 90 days from the end of the calendar year. Time limit for tax payment obligation: The deadline is the last day according to the deadline for submitting PIT finalization dossiers. . That is 90 days after the end of the calendar year.
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Thus, individuals who make their own finalization must complete their tax filings and obligations before March 30 of the following year.
It is necessary to pay attention to the deadline for submitting documents and completing the procedures and obligations related to personal income tax finalization in accordance with the law.
Above are the notes on what is tax finalization, what is PIT finalization. Hopefully through the article, you have understood more about the regulations surrounding this issue. Don’t forget to fulfill your personal income tax obligations in accordance with the law. Find out more real estate knowledge here!