There are two categories of individuals subject to Personal Income Tax (PIT) payments:
- Individuals with high incomes who must make additional payments after deductions.
- Individuals who choose to settle their taxes in order to receive a partial or full refund of the PIT they have paid.
In reality, the majority fall into the second category, and many remain unclear about the specifics of the tax refund policy. In this article, HMLF will provide clarity on the amount of PIT refunds individuals can expect in 2023.
1. Cases Eligible for PIT Refunds
According to Article 2, Section 8 of the 2017 Personal Income Tax Law, eligible cases for PIT refunds include:
- Cases where the amount of tax paid exceeds the required tax amount.
- Individuals who have paid taxes but have an income that falls below the taxable threshold.
- Other specific cases.
For case (2), only individuals with a monthly income exceeding 11 million VND (or 132 million VND annually) are liable to pay PIT.
2. Cases Where Tax Paid Exceeds the Required Amount
Taxpayers need to be aware of the amount of tax they have temporarily paid and calculate the precise tax amount required to determine if they have overpaid.
The formula is as follows: Excess Tax = Tax Temporarily Paid – Required Tax
If the result is a positive number, it indicates an overpayment of ta. While a negative result indicates a shortfall in tax payments.
3. Cases Where Taxable Income Is Below the Threshold
Taxpayers need to calculate whether their income subject to taxation reaches the threshold for PIT payment. The formula is as follows:
Income subject to tax = Taxable income – Deductions
Taxable income = Total income – Tax-exempt income
If an individual’s annual income, after deducting applicable exemptions, is below 132 million VND, they are exempt from PIT and will receive a refund of any previously paid PIT.
4. Conditions for PIT Refunds
According to Article 28 of Circular 111/2013/TT-BTC, the conditions for receiving a PIT refund are as follows:
- The PIT refund applies to individuals who have registered and have a tax identification number at the time of filing the tax settlement.
- Individuals who have authorized a tax settlement to a payment entity will receive their refund through that entity.
In cases where an individual has temporarily paid a larger amount of tax than required, the excess amount will be offset in the following period or refunded upon request.
Individuals who directly report their taxes to the tax authority can choose between a refund or offset in the subsequent period at the same tax office.
Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: +84 937215585
Website: hmlf.vn Email: miller@hmlf.vn
