Penalty for late submission of PIT finalization documents

1. What is PIT? What is PIT finalization?

️⛳ Personal income tax (PIT) is an amount that an income earner must deduct from his/her salary, or from other sources of revenue, into the state budget after deductions. Personal income tax is not levied on low-income individuals, so this revenue will be fair to all objects, contributing to reducing the disparity between classes in society.

️⛳  PIT finalization means an individual declares tax in a tax year on issues of additional tax to be paid, refund of overpaid tax, and tax clearing in the next period.

2. Income subject to PIT:

✨ Personal income taxable income includes the following types of income, except for tax-exempt income, including:

⏭️ Income from business subject to PIT:

✔ Income from production and trading of goods and services.

✔ Income from independent practice activities of individuals who have licenses or practice certificates as prescribed by law.

✔ Business income specified in this Clause does not include the income of business individuals with a turnover of 100 million VND/year or less.

⏭️ Incomes from salaries and wages subject to PIT:

✔ Salary, wages, and other items of salary and wage nature.

✔ Allowances and subsidies, except for:

▪️ Allowances and subsidies in accordance with the law on incentives for people with meritorious services; defense and security allowance.

▪️ Toxic and dangerous allowances for industries, occupations, or jobs at workplaces with hazardous or dangerous elements.

▪️ Attraction allowance, regional allowance as prescribed by law.

▪️ Unexpected hardship allowance, work accident allowance, occupational disease allowance, one-time allowance for childbirth or child adoption, allowance for the working capacity decline,  one-time retirement allowance, money monthly survivorship allowance, and other allowances in accordance with the law on social insurance.

▪️ Job severance allowance, job loss allowance according to the provisions of the Labor Code.

▪️ Social protection allowances and other allowances and subsidies are not of the nature of salary or wages according to the Government's regulations.

⏭️ Income from capital investment is subject to PIT:

✔ Loan interest.

✔ Dividend yield.

✔ Income from capital investment in other forms except for Government bonds.

⏭️  Income from capital transfer subject to PIT:

✔ Income from transfer of capital in economic organizations.

✔ Income from securities transfer.

✔ Income from capital transfer in other forms.

⏭️ Income from winning prizes subject to PIT:

✔ Lottery winnings.

✔ Winning prizes in the form of promotions.

✔ Winning in the form of betting.

⏭️ Income from copyright:

✔ Income from the transfer, transfer of the right to use objects of intellectual property rights.

✔ Income from technology transfer.

3. Penalty for late submission of PIT finalization dossiers:

💢  A warning will be imposed for the act of submitting tax declaration dossiers beyond the prescribed deadline from 1 day to 5 days with extenuating circumstances.

💢  A fine ranging from VND 2,000,000 to VND 5,000,000 shall be imposed for submitting tax declaration dossiers to tax authorities within the prescribed deadline from 01 days to 30 days (except for the case specified in Clause 1 of this Article).

💢  A fine ranging from VND 8,000,000 to VND 15,000,000 shall be imposed for one of the following acts:

▪️ Submitting tax declaration dossiers beyond the prescribed deadline from over 40 days to 90 days.

▪️ Submitting tax declaration dossiers more than 90 days after the prescribed deadline but no tax payable is incurred.

▪️ Tax returns are not filed but no tax payable is incurred.

▪️ Failing to submit appendices according to regulations on tax administration for enterprises having related-party transactions together with the corporate income tax finalization documents.

💢 A fine ranging from VND 15,000,000 to VND 25,000,000 shall be imposed if the tax return is overdue for more than 90 days from the deadline for submitting the tax return, and the payable tax amount is incurred and the taxpayer has already paid the full amount of tax and late payment interest is remitted into the state budget before the tax authority announces the decision on tax inspection or before the tax authority makes a record on late submission of tax declaration dossiers.

4. Deadline for submission of PIT finalization documents:

⚡ Pursuant to Article 44 of the Law on Tax Administration 2019, the deadline for submitting tax finalization declarations is as follows:

✔ No later than the last day of the 3rd month from the end of the calendar year or fiscal year for the annual tax finalization file.

✔ No later than the last day of the 4th month from the end of the calendar year for personal income tax finalization records of individuals who directly finalize tax.

⚡ Thus, for the income of 2021, at the beginning of 2022, the settlement will be made according to the following deadlines:

✔ If individuals earning incomes from salaries or wages authorize finalization to organizations or individuals paying income, the deadline for tax finalization is March 31, 2022.

✔ If an individual earns income from salary or wages, he/she directly finalize personal income tax with the tax agency, the deadline for finalization is April 30, 2022.

⇒ If you have any questions, please register here for TASCO's earliest advice or contact the hotline: 0975480868 (Zalo)

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