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PERSONAL INCOME TAX (PIT) FINALIZATION

Presented by : Finance & Accounting 30 March 2012. PERSONAL INCOME TAX (PIT) FINALIZATION. Contents. Who are subject to PIT finalization?. 1. 2. Kinds of PIT & Tax assessment period. Preparing tax finalization file. 3. 4. Deadline submission. AND. . . Resident individual.

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PERSONAL INCOME TAX (PIT) FINALIZATION

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  1. Presented by : Finance & Accounting 30 March 2012 PERSONAL INCOME TAX (PIT) FINALIZATION

  2. Contents Who are subject to PIT finalization? 1 2 Kinds of PIT & Tax assessment period Preparing tax finalization file 3 4 Deadline submission

  3. AND   Resident individual 1- Lower tax payment 2- Excess tax refund (optional) 3-Foreigners before getting out of VN 1. Who are subject to PIT finalization?

  4. 1. Who are subject to PIT finalization? Staying in VN(12 consecutive months) >= 183 days Residential individual Add Your Title Having a residential location OR Having lease contract (house, hotel..) >=90days

  5. Each occasion when income arise Taxable income 1.Capital investment & transfer Annual tax assessment period 2. Real property transfer 3.Winnings or prizes 4.Royalties or Franchises 5.Inheritances or gift 2. Kinds of PIT and Tax assessment period 1.Salary income 2. Biz income

  6. 3/7/2011 2/7/2012 1st 31/12/2012 2nd 1/1/2012 2. Kinds of PIT & tax assessment period Annual tax assessment period • Example : • Mr. A came to VN since 02 July 2011 (183 days) • Tax assessment year 2011 from 1st Jan to 31st Dec 2011 • 2) Mr. B came to Vn since 3 July 2011 (182 days) • * 1st tax assessment year : 3rd July 2011~ 2nd July 2012 • * 2nd tax assessment year : 1st Jan 2012 ~ 31 Dec 2012

  7. 0.05mil=0.5mil*10% (tax rate) Tax (Assessable income*% tax rate) 0.5mil=4.5mil-4mil (personal deduction) Assessable income (Taxable income-deductions) 4.5=5-0.5 (meal allowance) Taxable income (income- non-taxable income) 5mil Income 3. Preparing tax finalization files  Definitions

  8. 3. Preparing Tax finalization files Income : business + salary (wages) Income receivable by employees from employers in monetary or non-monetary forms • Insurance fee which the law doesn’t require employers buy for employees • Membership fees for individuals : sport, artistic… clubs • Other services for individuals in healthcare activities, entertainment, sports and aesthetics • Housing allowance paid by the employer but not exceeding 15%of total taxable income.

  9. 3. Preparing Tax finalization files Non-taxable income: Night shift or overtime salary payable which is higher than the day shift or normal working hours salary. One-off relocation allowance for expatriates coming to reside in Vietnam. Airfares for one round trip home leave for expatriates a year. School fees for children of expatriate employees up to high school level.

  10. 3. Preparing Tax finalization files Non-taxable income (Cont): Meal allowance in cash to the employees (not excess of the stipulated amount)

  11. 3. Preparing Tax finalization files • Deduction for dependents: 1.6m/month/person • 1. Children(including adopted and illegitimate children ) - Under 18 year-old or - Over 18 year-old : studying at university (college) or handicapped and unable to work • 2. Husband ( wife)/ parent or parent- in- law - Above the working age - Still of working age as stipulated by law but who is handicapped, unable to work • 3. Grandparents/Brothers and sisters/Brothers in law, sister s in law /Grandchildren, nephews and nieces /Other people required by law - Tax payer must directly rear or care for and - Above the working age or handicapped and unable to work

  12.  Forms (Circular 28/2011/TT-BTC dated 28/02/2011) 09/KK-TNCN - Declaration of tax finalization  Appendixes 1. 09A/PL-TNCN : Income from Salaries, Wages 2. 09B/PL-TNCN : Income from business 3. 09C/PL-TNCN: Dependent deductions (if dependents were registered) 3. Preparing Tax finalization files

  13. Step 1 Step 2 Step 3 Taxable incomes (+) Deductions (-) Tax liabilities (=) 3. Preparing Tax finalization files

  14. 3- Step 1. Taxable income

  15. 3- Step 2. Deductions

  16. 3- Step 3. Tax liabilities

  17. 3- Step 3. Tax rate

  18. 3- Step 3. Tax liabilities

  19. 3/7/2011 2/7/2012 1st 31/12/2012 2nd 1/1/2012 3- Step 3. Duplication of tax 1st year : 100 mil PIT 2nd year :120 mil PIT Duplication of tax from 1/1->2/7/2012 Tax reduction=100mil*6month/12month = 50 mil

  20. 3- Step 3. Tax liabilities

  21. 4.Deadline submission 90days since day-end of Tax assessment year

  22. Thank You !

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