Công văn 6122/BTC-TCT

To: Provincial/municipal Finance Services, State Treasuries and Tax Departments

The Ministry of Finance has recently received documents from some Tax Departments, reflecting problems in the refund of income tax on high-income earners under Item 1.2, Point 1, Section III, Part G of the Finance Ministry’s Circular No. 60/2007/TT-BTC of June 14, 2007, guiding the implementation of a number of articles of the Tax Administration Law, and guiding the implementation of the Government’s Decree No. 85/2007/ND-CP of May 25, 2007, detailing the implementation of a number of articles of the Tax Administration Law, and guidance in the Finance Ministry’s Official Letter No. 128/BTC-TCT of January 4, 2008. Concerning this matter, the Ministry of Finance provides the following guidance:

Point 5.1, Section 5, Part III of the Finance Ministry’s Circular No. 81/2004/TT-BTC of August 13, 2004, guiding the implementation of the Government’s Decree No. 147/2004/ND-CP of July 23, 2004, which details the implementation of the Ordinance on Income Tax on High-Income Earners, specifies cases eligible for the refund of income tax on high-income earners, including:

- Individuals whose income tax amounts temporarily paid in the year are larger than payable amounts upon annual tax finalization, except cases in which they have the overpaid tax amounts subtracted by income-paying agencies from the subsequent period’s payable tax amounts.

- Other cases eligible to refund under competent agencies’ handling decisions according to law.

In order to uniformly implement regulations on the refund of income tax on high-income earners to taxpayers in the above cases and create favorable conditions for taxpayers, the Ministry of Finance specifically guides the refund of income tax on high-income earners as follows:

1. Responsibilities of tax agencies:

- Upon annual tax finalization, if a payer of income tax on high-income earners (personal income tax) has an overpaid tax amount to be refunded (at the request of the taxpayer), the tax agency of the locality where the taxpayer makes tax registration and which grants tax identification numbers shall consider and promptly refund tax to the taxpayer in accordance with law. If in the year the taxpayer has tax withheld and paid in different localities by income-paying agencies or has paid tax by another mode, he/she shall declare and finalize all his/her total incomes and the payable tax amount, the temporarily paid tax amount with the tax agency where tax finalization is conducted for consideration and refund of tax.

- For other cases of tax refund, the tax agency shall refund tax according to law and its competence.

2. Tax refund procedures:

- Upon issuance of a tax refund decision (according to Form No. 04/HTBT attached to the Finance Ministry’s Circular No. 60/2007/TT-BTC of June 14, 2007), the tax agency shall send this decision, enclosed with additional information on tax refund, to the state treasury of the same level where the taxpayer files tax declaration and finalization (made according to the attached form).

- The state treasury shall make a payment order (in case tax is refunded by account transfer) or a payment slip (in case tax is refunded in cash) for refunding tax to the taxpayer; at the same time, cancel the remittance into the state budget of the refunded tax amounts, if they have not yet been finalized into the state budget, or account as the current year’s state budget expenditures for the refunded tax amounts, if they have been finalized into the previous year’s state budget.

Based on the above guidance, tax agencies shall provide guidance to taxpayers for information and compliance; finance and tax agencies and state treasuries shall join in the implementation. Problems arising in the course of implementation should be reported to the Ministry of Finance for study and timely settlement.