This April 2023 publication of our Tax and Accounting Updates looks at guidance from the General Department of Taxation for 2022 Personal Income Tax (PIT) finalisations, confirmation from tax authorities that updates for new chip-based citizen identification cards are not required, a new process for labour policy registration in Ho Chi Minh City, updates to the methods for Unemployment Insurance contributions and new forms for Social Insurance, and our regular review of recent Official Letters released by the Tax Authorities.
Detailed guidance for 2022 PIT finalisations
On 22 March 2023, the General Department of Taxation issued Official Letter 13762/CTHN-HKDCN guiding 2022 PIT finalisations. According to the Official Letter, individuals required to self-finalise their tax obligations with the tax authority include:
- Residents, who earn income from salaries or wages from two or more sources but do not meet the conditions to authorise for employer PIT finalisation, and where there is additional tax payable or overpaid tax to be refunded or offset in the next tax period.
- Individuals present for the first time in Vietnam from 183 days or more during 12 consecutive months, the first year of finalisation is 12 consecutive months from the first day of presence in Vietnam.
- Foreign individuals who terminate working contracts in Vietnam will finalise their PIT with tax authorities before leaving the country.
- Residents, who earn income from salaries and wages paid from abroad or paid by international organisations, Embassies, and Consulates without tax deduction during the year.
- Residents, who earn income from salaries and wages and are entitled to tax reduction due to natural disasters, fires, accidents or fatal diseases affecting their ability to pay tax.
Where an employer determines an employee is required to finalise their own PIT after completing PIT finasation under the company’s tax code, the company is not required to adjust the PIT finalisation return, but instead, the company will issue PIT receipts with the finalised tax amount declared and noted in the bottom left of the PIT receipts the following sentence: “The company…has completed the PIT finalisation on behalf of Mr/ Ms…(under the authorisation) in the row no. … of the appendix no. 05-1/BK-TNCN”, for these individuals to finalise their PIT with the tax authorities.
The deadline for PIT self-finalisation is the last day of the fourth month from the end of the calendar year (where the deadline falls into public holidays, it will be the next working day, i.e., by 4 May 2023 for 2022 PIT self-finalisation).
Companies are not required to update the Legal Representative’s citizen identification information in the Enterprise Registration Certificate by 31 March 2023
On 21 March 2023, the Ministry of Planning and Investment released Official Letter 43/DKKD-GS regarding updating information from new chip-based citizen identification cards of Legal Representatives.
Following this letter, in relation to the request from tax authorities for updating the information from new chip-based citizen identification cards for Legal Representatives on the Enterprise Registration Certificate by 31 March 2023, the General Department of Taxation confirms that they have not made any request. The registration of changes and notification of changes in business registration contents are specified in the Law on Enterprises and Decree 01/2021/ND-CP.
A New process for labour policy registration in Ho Chi Minh City from 28 March 2023
On 28 March 2023, the People’s Committee of Ho Chi Minh City issued Decision 1067/QD-UBND promulgating a new process for registering labour policies in Ho Chi Minh City. In accordance with the new procedure taking effect from 28 March 2023, an application to be submitted to the authority is to include the following:
- Written request for registration of the labour policy (1 original)
- Supporting documents in relation to labour discipline and material responsibility of the enterprise (1 original)
- Written comments of the grassroots Trade Union (1 original)
- Labour policy (2 originals)
In addition to the form of direct submission at the authority’s office, the applications can be submitted online at the Public Service Portal https://dichvucong.hochiminhcity.gov.vn.
Updates to the methods for Unemployment Insurance contributions and new forms for Social Insurance
Decision 490/QD-BHXH released by Vietnam Social Insurance on 28 March 2023, taking effect from 1 April 2023, updates the methods of Unemployment Insurance (UI) contributions and updates forms for Social Insurance (SI), Health Insurance (HI) and UI. Under this decision:
- All employers are required to pay UI and deduct from employees salaries to contribute at the same time to the UI Fund on a monthly basis. (Previously, there were some cases where employers were allowed to deduct UI every 3 or 6 months)
- 18 forms for SI, HI, UI under previous Decision 595/QD-BHXH in 2017 are waived
- 28 new forms for SI, HI and UI were introduced
Official Letters Released
Investment project from conversion of an enterprise type/ownership, splitting, separation, merger or consolidation are not entitled to tax incentives under the new investment project category
On 17 March 2023, the General Department of Taxation released Official Letter 755/TCT-CS regarding corporate income tax incentives for investment projects.
Under this Official Letter, an investment project formed from the conversion of an enterprise type/ ownership, splitting, separation, merger or consolidation, is not entitled to CIT incentives under the new investment project category. However, such investment project can inherit the CIT incentives of the original project (before conversion, splitting, separation, merger or consolidation) for the remaining time provided the conditions for enjoying tax incentives are met.
For more information on tax updates and other compliance requirements for businesses operating in Vietnam, follow our monthly releases on the website and social media channels at vietnam.acclime.com.