Answer:
As prescribed by the Law on PIT, for resident individuals who sign the LC having the terms of at least 03 months, the Employer will make tax deductions as per the partially cumulative tariff, including the case where the Employee signs the LC of at least 03 months with many Employers[1]. For resident individuals who do not sign the LC or sign the LC having terms of less than 03 months and have a total income of at least VND2 million, organisations or individuals who pay wages, remunerations, or other amounts to the Employee must make a tax deduction of 10% the income before making payments[2].
Regarding PIT finalisation, the Employee can authorise the Employer to finalise PIT on his or her behalf if the Employee earns income from salary, wages from the LC last at least 03 months and are working for the Employer at the time of tax finalisation, including those who have not spent the full 12 months working for the Employer in the year, and also earn current income from other sources with an average of not more than VND10 million/month which has been subject to a tax deduction of 10% by those who pay the income, and the Employee does not request to finalise PIT on this income portion[3]. Supposing that the Employee is a resident individual who signs LC having the term of at least 03 months and is working under the LC at the time of tax finalisation, the finalisation of PIT will be implemented based on particular circumstances:
- If the Employee earns current income from the contracts on side projects with an average income of at least VND10 million/month in the tax year which has been subject to a tax deduction of 10% by those who pay the income, the Employee must finalise PIT by himself or herself and cannot authorise the Employer to finalise tax for him or her.
- The Employer paying salary, wages under the LC, and those who pay remunerations, wages, or other amounts under the contracts on side projects must provide the Employee with the source documents of PIT deduction so he or she can finalise PIT[4].
- On the other hand, if the Employee earns current income from the contracts on side projects with an average income of not more than VND10 million/month in the tax year which has been subject to a tax deduction of 10% by those who pay the income, and does not request to finalise tax on this current income, he or she can authorise the Employer to finalise tax on the income from salary, wages that they receive from the Employer.
[1]Article 25.1(b.1) of the Circular 111/2013/TT-BTC of Ministry of Finance dated 15/08/2013
[2]Article 25.1(i) of the Circular 111/2013/TT-BTC of Ministry of Finance dated 15/08/2013
[3]Article 16.2 (a.4) of the Circular No. 156/2013/TT-BTC of the Ministry of Finance dated 06/11/2013 as amended and supplemented by Article 21.3 of the Circular 92/2015/TT-BTC of the Ministry of Finance dated 15/06/2015 and Article 8.6 (d.2) of the Decree No. 126/2020/ND-CP of the Government dated 19/10/2020.
[4]Article 25.2 of the Circular No. 111/2013/TT-BTC of Ministry of Finance dated 15/08/2013
