Công văn 1823/BTC-TCT

To: Ministries, ministerial-level agencies and government-attached agencies

Provincial-level People’s Committees

The Ministry of Finance issued Circular No. 27/2009/TT-BTC on February 6, 2009, guiding the implementing the extension of personal income tax payment.

In order to uniformly apply the implementing the extension of personal income tax payment in strict accordance with regulations, the Ministry of Finance guides some specific contents as follows:

1. With respect to objects not being entitled to an extension of PIT payment:

1.1. According to Clause 2, Article 1 of Circular No. 27/2009/TT-BTC mentioned above, objects not being entitled to an extension of PIT payment include:

a/ Resident individuals and non-resident individuals deriving income from real properties transfer.

b/ Resident individuals and non-resident individuals deriving income from winnings, including lottery winning, sales promotion winning in every kind, betting and casino winning, winning in prized games and contests and winning in other forms.

c/ Non-resident individuals deriving income from business activities; income from salaries or wages; income from inheritance; and income from gifts.

1.2. Non-resident individuals deriving income in Vietnam who are not entitled to extension of PIT payment include:

a/ Individuals without presence in Vietnam.

b/ Individuals leaving Vietnam before June 30, 2009.

c/ Individuals arriving tin Vietnam from January 1, 2009 on, whose dates of departure have not yet been identified clearly, having no registered place of permanent residence or rent contract with a term of 90 days or more in Vietnam.

2. With respect to the extended time of PIT payment

Under the guidance in Circular No. 27/2009/TT-BTC mentioned above, the extended time of PIT payment shall lasts from January 1, 2009, through May 31, 2009; The determination of the income derived in the extended time of PIT payment with respect to eah objects and taxable income items shall be as follows:

2.1. For income from salaries or wages derived by resident individuals: It shall be salary and wage paid by income paying agencies to employees from January 1, 2009, through May 31, 2009, regardless of whether these income are arisen in 2009, or from 2008 or before.

Particularly, PIT amounts payable by high-income earners in 2008 but not paid or , PIT amounts payable by high-income earners which have been detected through examination or inspection to be recovered shall not be extended to pay.

2.2. For income from business activities derived by resident individuals: It shall be the income subject to PIT tax derived from business turnover arisen from January 1, 2009, through May 31, 2009.

2.3. For income from capital transfer (including securities transfer):

a/ For the transfer of contributed capital portions: It shall be the time of submitting the legal dossier on transfer of contributed capital to a competent state management agency, provided that the time of submitting falls within the period from January 1, 2009, through May 31, 2009

b/ For securities transfer:

- For listed securities and securities not yet listed but already registered for transfer through securities trading centers: It shall be the time when the securities company, Securities Stock Exchange or Securities Trading Center issues notifications of successful transactions, provided that the time of notification falls within the period from January 1, 2009, through May 31, 2009.

 - For securities other than those prescribed above: it shall be the time when securities transaction contracts taking effect; in case where the securities transaction contracts are not available, it shall be the time of making registration for securities transfer with the securities-issuing company, provided that the time of taking effect of securities transaction contracts or the time of registering for transferring securities falls within the period from January 1, 2009, through May 31, 2009.

c/ For income from royalties and franchise: It shall be the income items which were paid in the period from January 1, 2009, through May 31, 2009, in accordance with the payment time stated in the contract.

2.4. For income from inheritance or gifts of resident individuals: It shall be the time of submitting the legal dossier on the transfer of ownership rights or use rights over bequeathed assets or gifts to a competent state agency, provided that the time of submitting the legal dossier falls within the period from January 1, 2009, through May 31, 2009.

The time of submitting a dossier on the transfer of ownership rights or use rights over bequeathed assets or gifts to a competent state agency is the date when the competent state agency receives the dossier according to provisions.

3. With respect to PIT refund:

Under the guidance at Point 3.3, Article 2 of Circular No. 27/2009/TT-BTC income earners may retain tax amounts being entitled to extension of PIT payment during the extended time.

a/ If the income paying agency has temporarily withheld payable tax amounts before the date of issuance of Circular No. 27/2009/TT-BTC but not yet paid them into the state budget, the income paying agencies shall be responsible for refunding the temporarily withheld tax amounts in according to the following process:

- The accounting (finance) section shall make out a list of cases in which PIT has been temporarily withheld (clearly stating the taxable income and tax amount temporality withheld of each individual) and submit it to the unit’s leadership for approval;

- On the basis of the approved list, the income paying agency shall issue notifications to concerned individuals for them to take back the tax amounts temporarily withheld by the unit.

- Individuals shall sign on the list upon receiving the temporarily withheld amounts.

If the income paying agency has issued tax withholding receipts to taxpayers, they shall recover these receipts upon refunding the withheld tax amounts.

The deadline for refunding the withheld tax amounts not yet paid into the state budget is the last working day of February 2009 at the latest.

From the date of issuance of Circular No. 27/2009/TT-BTC through May 31, 2009, income paying agencies shall not be allowed to keep the payable PIT amounts of taxpayers being entitled to an extension to pay , in stead, they shall have to refund them to taxpayers together with their income.

b/ In case tax amounts being extended to pay have been paid into the state budget:

In case income paying agencies had withheld tax amounts of individuals being entitled to an extension to pay and paid it into the state budget, tax authorities shall base on budget payment receipts to issue notifications to concerned organizations and individuals to refund tax amounts according to the following procedures:

- Income paying agencies and individual taxpayers shall submit an application to request tax authorities directly in charge of administering to refund the amount of PIT being extended to pay but paid into the State Budget in according to form No. 01/HTBT (issued together with the Ministry of Finance’s Circular No. 60/2007/TT-BTC of June 14, 2007, guiding the implementation of a number of articles of the Law on Tax Administration and the Government’s Decree No. 85/2007/ND-CP of May 25, 2007, detailing the implementation of a number of articles of the Law on Tax Administration), enclosed with tax returns and tax payment receipts as evidence.

- Basing on valid dossiers of request for tax refund from income paying agencies or individual taxpayers, tax authorities shall examine, issue the decision on refunding PIT and send it to state treasuries for refunding the paid tax amounts.

- The time limit for tax refund shall be 5 working days after the receipt of valid dossiers at the latest.

- Whenever receiving the refunding amount, income paying agencies shall be responsible for paying it to individuals having income within 5 working days after the receipt of these tax amounts. The order of and procedures for the refund of tax amounts to individuals having income comply with the guidance at Point a mentioned above.

4. Filing the amount of PIT to be temporarily entitled to an extension to pay

During the extended time, income paying agencies shall not be allowed to keep the tax amounts to be extended to pay; individuals who are objects subject to directly filing PIT with tax authorities shall be responsible for paying the amount of PIT to be extended to pay. However, income paying agencies and individuals who are objects subject to directly filing PIT with tax authorities shall have to still file the amount of PIT to be extended to pay and submit returns in according to the guidance in the Ministry of Finance’s Circular No. 84/2008/TT-BTC of September 30, 2008.

For cases of transfer of contributed capital portions, inheritance or gifts ... which are entitled to an extension of PIT payment, district-level tax offices shall, after examining the dossiers and calculating the tax amounts to be extended to pay, send notifications of extending PIT payment (in according to form No. 01/GNT-TNCN issued together with this Official Letter) for concerned individuals and competent state management agencies for use as a basis for the transfer of ownership rights or use properties. A notification shall be made in at least 3 copies to be handed over to the individual being extended to pay tax, transferred to the competent state management agency and kept at the tax authority.

Any problems arisen in the course of implementation should be promptly reported to the Ministry of Finance (the General Department of Taxation) for further study and guidance.-