PIT Finalization: Handling Incorrect Authorization, Issuing Withholding Certificates, and Re-Filing by Individuals
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The Ministry of Finance provided guidance on three common issues in enterprise personal income tax (PIT) finalization: (1) when an employee has delegated authorization but is later found to be required to self-file (due to additional tax payable); (2) how to complete withholding certificates in this scenario; (3) employees needing to re-file independently when eTax Mobile does not yet support this function. Per Ministry of Finance guidance (based on Circular 80/2021/TT-BTC and Decree 126/2020/NĐ-CP), enterprises must amend their PIT finalization returns when an individual is found to be ineligible for delegation. The withholding certificate records the amount withheld/provisionally paid during the year. Individuals must physically attend the tax authority to re-file if the application does not support this. Enterprises are not subject to late payment penalties if they properly fulfill withholding and declaration obligations based on actual income paid during the period.
Question
An enterprise provisionally pays PIT on behalf of employees. Three issues arise:
- An employee has delegated authorization but is later found ineligible (additional tax payable) - must the enterprise amend its return?
- In this case, what amount should the withholding certificate show?
- The individual needs to re-file independently - what to do when eTax Mobile does not support this?
Guidance Content from Images
On amending the finalization return: Per Circular 80/2021/TT-BTC dated September 29, 2021 on PIT finalization: when an individual is found ineligible for delegation, the paying organization must amend its PIT finalization return per Article 47 of the Tax Administration Law and Article 47 of Decree 126/2020/NĐ-CP. A withholding certificate must also be issued for the individual to self-file.
On withholding certificate content: The withholding certificate records the PIT amount withheld/provisionally paid during the year (not the post-finalization amount). The individual uses this certificate to declare total income from all sources.
On enterprise responsibility: The enterprise properly fulfills source withholding obligations for income paid through it; enterprise responsibility is limited to income paid through the enterprise. No basis for late payment penalties if the enterprise has correctly and fully paid the withheld tax.
On individual re-filing method: If eTax Mobile does not yet support re-filing, individuals may attend the tax authority in person or submit documents through the National Public Service Portal/electronic tax portal per current regulations.
Legal basis: Article 17 PIT Law; Circular 80/2021/TT-BTC; Decree 126/2020/NĐ-CP; Circular 111/2013/TT-BTC; Circular 92/2015/TT-BTC.