How Do Individuals Earn Income in 2 Personal Income Tax Payers?

I/ Who are Personal Income Tax Payers?

Under Article 1 of Circular 111/2013 / TT-BTC, PIT payers include both resident individuals and non-residents who meet the statutory conditions. Specifically:

1. For resident individuals:

Resident individual means a person who satisfies one of the following conditions:

Firstly, being present in Vietnam for 183 days or more within a calendar year or for 12 consecutive months from the first date of presence in Vietnam.

Second, having a regular residence in Vietnam in one of the following 2 cases:

Having a place of habitual residence in accordance with the law on residence

Having rented houses for dwelling in Vietnam in accordance with the housing law

2. For non-resident individuals

Non-resident individual means a person that does not meet the above conditions.

II / PIT calculation method in 2 places:

According to Clause 1, Article 25 of Circular 111/2013 / TT-BTC stipulates the PIT withholding:

1. Tax deduction

Tax withholding means that income-paying organizations and individuals subtract payable tax amounts from taxpayers' incomes before paying incomes, specifically as follows:

b) Incomes from salaries and wages

b.1) For resident individuals signing labor contracts for three (03) months or more, the income-paying organizations and individuals shall withhold tax according to the partially progressive tariff, including individual cases. sign a contract for three (03) months or more in many places.

i) Withholding tax in some other cases

Organizations and individuals that pay salaries, remuneration, and other payments to resident individuals who do not sign labor contracts (under the guidance at Points c, d, Clause 2, Article 2 of this Circular) or sign contracts The labor contract of less than three (03) months with a total income payment of two million (2,000,000) VND / time or more must deduct tax at the rate of 10% of the income before paying to the individual.

In case an individual has only income subject to tax withholding according to the above rate but estimated that his total taxable income, after subtracting family circumstances, has not yet reached the taxable level, he / she may collect tax. enter as a commitment (under the form issued together with the guiding document on tax administration) to send the income paying organization to the income payer as a temporary basis for personal income tax not yet deducted. Individuals making commitments under the guidance at this point must register tax and have tax code at the time of commitment.

Conclude:

• Individuals having income from 2 places and signing labor contracts from 3 months or more shall calculate PIT according to Progressive Tax Schedule.
• Individuals having income from many places including places where labor contracts are under 3 months (seasonal, contracted ...) and with a salary of 2,000,000 / time or 2,000,000 / month or more, must be deducted. minus 10% (Can not make commitments because of 2 places).

III / How to calculate deductions for yourself and your dependents:

According to Clause 1, Article 9 of Circular 111/2013 / TT-BTC stipulates the deduction of family circumstances:

c.1) Personal deduction for the taxpayer:

c.1.1) If a taxpayer has multiple sources of income from wages, salaries, or business, the taxpayer chooses to calculate family deduction for himself at one place at a time (fully monthly).

i, Taxpayers only have to register and submit supporting documents for each dependent once during the period of family deduction calculation. In case taxpayers change their workplace or business place, they will register and submit documents proving their dependents like the first time their dependents are registered under the instructions in Item h.2.1.1.1, point h, clause 1, this.

According to Official Letter 34863 / CT-TTHT dated May 26, 2017 of Hanoi Tax Department

“In case a taxpayer signs a labor contract for more than three months in two places, the taxpayer is allowed to deduct family circumstances for himself at an income-paying agency and family allowances for dependents at the agency. other income payments. This family circumstance-based deduction does not affect the individual's PIT obligations if it still ensures the principles as guided at Point c, Clause 1, Article 9 of Circular No. 111/2013 / TT-BTC.

Conclude:

• Individuals with multiple sources of income are only allowed to deduct themselves in one place.
• If you want a deduction for your dependents, you must register at the Company you want to deduct.

For example:

- Ms. An signs a contract at Company A with a contract period of more than 3 months and registers to deduct herself at Company A. Thus, company A will calculate PIT for Ms. An according to the progressive schedule. and deduct yourself for Mrs. An.

- In addition, Ms. An also signs a contract with company B, assuming there are 2 cases:

a) If you sign a contract with a term of more than 3 months, the company will also calculate the progressive schedule but not deduct herself for Ms. An anymore, because Ms. An has reduced herself at company A. How much income you pay in total will take into account that taxable income.

b) If signing a contract with a working term of less than 3 months, then:

+ Salary <2 million / time or month, no PIT deduction.

+ Salary> 2 million / time or a month, 10% must be deducted (No commitments 02)

IV / PIT finalization for individuals working in 2 places: According to Official Letter 801 / TCT - TNCN dated March 2, 2016 of the General Department of Taxation:

•  The organization paying income from salaries or wages, regardless of whether withholding tax or not, is responsible for making tax finalization and tax finalization on behalf of authorized individuals.
•  If the organization does not pay income from salaries or wages in 2015, it is not required to declare the PIT finalization.

Conclude:

- If your company pays someone, it must finalize PIT for that person (whether or not there is tax withholding). That is settlement of the salary, wages that your company pays to that employee.

- No one pays anyone's salary, it doesn't have to be finalized.

+ “Individuals who have salary or wage income and sign a labor contract of 3 months or more at an income-paying organization, and have current income in other places, on average each month of the year does not exceed 10 million VND 10% tax deducted by the income payer, if the individual does not request tax finalization for this current income, he / she is authorized to settle at the income paying organization that signs the labor contract. 3 months or more. If an individual has a request for tax finalization for his / her current income, he / she shall directly make the settlement with the tax office. "

+ “Individuals with income from salaries or wages sign labor contracts from 03 months or more in a unit, and have current income without deduction of tax (including cases not yet deducted and has reached the level of withholding but no deduction), the individual does not authorize tax finalization, but has to settle PIT by himself.

V / Place to pay PIT finalization for individuals:

1.For TCTTN - Enterprise:

The place to submit 2016 PIT finalization dossiers with TCTTN from salaries and wages is guided at Point c, Clause 1, Article 16 of Circular 156/2013 / BB-BTC.

ITBs submit PIT finalization dossiers at the Tax Department or directly managed by the Tax Department.

For resident individuals earning incomes from salaries or wages, making tax finalization directly with tax offices:

2.1 Individuals earning incomes from salaries or wages directly declare tax, then the place to file QTT dossiers is the Tax Department where individuals submit tax declaration dossiers for the year.

2.2 Individuals having income from salaries or wages from two or more places are subject to direct management with the IR, the place to submit the QTT file is as follows:

- The individual who has calculated the family circumstance deduction for himself at any vocational training institution shall submit his / her application to the IRC at the IR that directly manages that vocational institution. In case an individual changes his workplace and at the last TCTTO tries to deduct family circumstances for himself, he / she shall submit the application for QTT at the final ITC managing organization. In case an individual changes his workplace and at the final TCTTN does not calculate family deduction for himself, he / she shall submit a QTT dossier at the Tax Department where he / she resides (the place of permanent or temporary residence).

- In case the individual has not yet calculated the family deduction for himself in any CPO, he / she shall submit the QTT file to the Tax Department where he / she resides (where he / she is registered permanent or temporary residence).

2.3 In case an individual does not sign a labor contract, or signs a labor contract of less than 3 months, or signs a contract to provide services with income in one place or many places, 10% of QTT will be deducted from the Sub-Department. Taxes where individuals reside (where they are registered for permanent or temporary residence).

2.4 The individual who earns income from salaries or wages in one place or many places during the year, but at the time of CP that does not work at any TCTTN, the place to submit the application is the Tax Department where the individual resides. sign permanent or temporary residence).

VI / Income 2 places to pay social insurance like?

According to Clause 1, Article 39 of Decision 959 / QD-BHXH dated 09/09/2015 of the Vietnam Social Security:

1. Subjects participating in compulsory social insurance, health insurance and social insurance

1.2 The employees who have 02 or more labor contracts at the same time with many different units shall pay the social insurance and unemployment insurance premium under the first signed labor contract, and pay health insurance under the labor contract with the highest salary.

Conclude:

• Pay social insurance and unemployment insurance premium at the first place of contract signing
• Pay health insurance in the place with the highest salary

Related posts:

- You can see more Circular 111/2013 / TT-BTC on personal income tax here

- The latest personal income tax deduction according to Resolution 954/2020 / UBTVQH14 (effective from July 1, 2020)

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