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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. - PowerPoint PPT Presentation
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PERSONAL INCOME TAX (PIT) FINALIZATION
Presented by : Finance & Accounting 30 March 2012
Contents
Who are subject to PIT finalization?
Kinds of PIT & Tax assessment period
Preparing tax finalization file
1
2
3
4 Deadline submission
1. Who are subject to PIT finalization?
AND
1- Lower tax payment2- Excess tax refund (optional)3-Foreigners before getting out of VN
Resident individual
1. Who are subject to PIT finalization?
Staying in VN(12 consecutive months) >= 183 days
Having a residential location
Having lease contract (house,hotel..) >=90days
Add Your TitleAdd Your TitleORResidential Residential individualindividual
2. Kinds of PIT and Tax assessment period
1.Salary income
1.Capital investment & transfer
2. Real property transfer
3.Winnings or prizes
4.Royalties or Franchises
5.Inheritances or gift
Annual tax assessment period
Taxable Taxable incomeincome
Each occasion when income arise
2. Biz income
2. Kinds of PIT & tax assessment period
Annual tax assessment period
Example :
1) 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
1st2nd
3/7/2011 2/7/2012
1/1/201231/12/2012
3. Preparing tax finalization files
5mil IncomeIncome
Definitions
4.5=5-0.5 (meal allowance) Taxable incomeTaxable income
(income- non-taxable income(income- non-taxable income))
0.5mil=4.5mil-4mil (personal deduction) Assessable incomeAssessable income
(Taxable income-deductions)(Taxable income-deductions)
0.05mil=0.5mil*10% (tax rate) TaxTax
(Assessable (Assessable income*% tax rate)income*% tax rate)
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.
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.
3. Preparing Tax finalization files
Non-taxable income (Cont):
– Meal allowance in cash to the employees (not excess of the stipulated amount)
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
3. Preparing Tax finalization files
Forms (Circular 28/2011/TT-BTC dated 28/02/2011)
09/KK-TNCN - Declaration of tax finalization
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)
Appendixes
3. Preparing Tax finalization files
Taxable incomes(+)
Taxable incomes(+)
Step 1Step 1
Deductions(-)
Deductions(-)
Step 2Step 2
Tax liabilities(=)
Tax liabilities(=)
Step 3Step 3
3- Step 1. Taxable income
No. Items Amount Notes
1
Total Taxable income [22] =[23+25]
a
Total taxable income in VN, in which
[23] 6A+15B
Total taxable income for consideration of tax reduction
[24] NO
bTotal taxable income outside VN
[25] 8A+19B
3- Step 2. Deductions
No. Items Amount Notes
2
Deductions [26] [27+28+29+30]
a For tax payer [27] 4mil/1m
b For dependents [28]1,6m/p/m-
Registered
cCharities, humanitarian, study encourage
[29]Established
as regulation
dCompulsory insurances
[30]
Health, social and
unemployed Insurance
3- Step 3. Tax liabilities
No. Items Amount Notes
3 Total assessable income [31] =[22-26]
4 Tax [32] =[31* tax rate]
3- Step 3. Tax rate
Tax Bracket
Portion of monthly
Assessable income (mil)
Tax rate (%)
Illustration :
Total assessment income 240mil/year (20mil/m)
1 Up to 5 5 5mil *5%=0.25
2 Over 5 to 10 10 5mil *10%=0.5
3 Over 10 to 18 15 8mil *15%=1.2
4 Over 18 to 32 20 2mil *20%=0.4
5 Over 32 to 52 25Monthly
tax0.25+0.5+1.2+0.4=
2.35
6 Over 52 to 80 30 Total (year)
2.35*12=28.2mil7 Over 80 35
3- Step 3. Tax liabilities
No. Items Amount Notes
5
Total paid deducted of tax [33] =[34+35+36]
a Deducted [34] 9A+18B
b Paid [35] 12A+17B
cPaid outside VN
(if any)[36]
Max= total tax * outside/total
income
6 Reduction of tax [37]Duplication of tax (1st & 2nd
year)
3- Step 3. Duplication of tax
1st year : 100 mil PIT2nd year :120 mil PIT Duplication of tax from 1/1->2/7/2012
Tax reduction=100mil*6month/12mon
th = 50 mil
1st2nd
3/7/2011 2/7/2012
1/1/201231/12/2012
3- Step 3. Tax liabilities
No. Items Amount Notes
7 Tax Payable [38][32-33-37]
>0
8
Excess payment [39] [32-33-37]
>0
a Refund requirement [40]
b Set-off in next period [41]
4.Deadline submission
90days since day-end of Tax assessment year