Công văn 6229/TC/TCT

To: Provincial/municipal Tax Departments

The Finance Ministry has received official letters from some rep offices and provincial/municipal Trade Services, questioning about personal income tax payment by rep offices. Concerning this matter, the Ministry hereby provides guidance as follows:

Pursuant to 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 detailing the implementation of the Ordinance on Income Tax on High-Income Earners:

- Point 3.3.1.2, Section III, stipulates: “In cases where the managing agencies don’t pay incomes directly but, according to their functions and tasks, manage, inspect and supervise activities of organizations employing individual taxpayers, such organizations, if being able to assure the concentrated and timely tax collection and getting consents of tax offices, may collect and remit the tax money into the state budget under regulations.”

- Point 2.1, Section IV stipulates: “Income-paying agencies shall enjoy remuneration to be calculated on the withheld income tax amounts before remitting them into the state budget in order to cover expenses for organization of tax collection and reward individuals with achievements in organization of tax collection at the rate of 0.5% of the tax amounts on regular incomes, or 1% of the tax amounts on irregular incomes.”

According to the above-said provisions and based on their operations, rep offices may opt for either of the two ways of making declaration for personal income tax payment: registering tax payment with Provincial/ Municipal Tax Departments or paying the tax through their authorized units:

- Rep offices registering tax payment with Provincial/ Municipal Tax Departments shall declare incomes and register tax payment in strict accordance with the provisions of Circular No. 81/2004/TT-BTC.

- Rep offices paying tax through units authorized by tax offices shall monthly have to declare incomes and payable income tax amounts to these units so that the latter may declare and remit tax money into the state budget under the guidance in the Finance Ministry’s Circular No. 81/2004/TT-BTC Provincial/ Municipal Tax Departments shall issue written authorizations to functional management units under the provisions of Point 3.3.1.2, Section III of the above-mentioned Circular No. 81/2004/TT-BTC on payment and remittance of personal income tax. Authorized units may use remunerations according to the provisions of Point 2.1, Section IV of this Circular.

The Finance Ministry hereby notifies the above guidance to Provincial/ Municipal Tax Departments for knowledge and implementation.