Công văn 5181/CT-TTHT năm 2017 về thuế thu nhập cá nhân do Cục thuế thành phố Hồ Chí Minh ban hành

Dear Yakjin Co., Ltd. at Ho Chi Minh city

Address: 10th Floor, MB Sunny Tower, 259 Tran Hung Dao Street, District 1, HCMC TIN: 0314195448

In reply to your Official Correspondence No. YAKJINHCM-TAX(PIT)/001/2017 dated April 19, 2017 concerning queries about PIT, the Tax Department would like to give you the following advice:

Pursuant to the Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance providing instructions about PIT:

- Clause 2 of Article 2 sets out regulations on incomes from wages and salaries as follows:

“Income earned from salaries and wages means a monetary amount that an employee receives from an employer, including:

a) Salaries, wages and other amounts in the nature of salaries or wages, all of which exist in cash or non-cash form.

b) Allowances and/or benefits, except the followings:

…"

- Point b of clause 2 of Article 8 regulates the date of determination of taxable income with respect to income earned from wages or salaries:

“Date of determination of taxable income with respect to income earned from wages and salaries is the date on which an entity or person pays income to a taxpayer.”

- Point 1 of clause 1 of Article 25 regulates tax withholding:

“1. Tax withholding

Tax withholding is the income payer’s calculating and withholding the tax payable from the taxpayer’s income before paying the income to the tax payer in the following specific cases:

…

b) Incomes from salaries and wages

b.1) The income payer shall deduct taxes from incomes of residents that sign labor contracts for 03 months or longer according to the progressive tax table, including the persons that sign such contracts at various places.

b.2) The income payer shall still withhold tax from the incomes earned residents that sign labor contracts for 03 months but resign before such labor contracts expire according to the progressive tax table.

…

i) Withholding tax in other cases:

The organization or person that pays a total income from 2 million VND to a resident that does not sign a labor contract (as guided in Point c and Point d Clause 2 Article 2 of this Circular) or that signs a labor contract for less than 03 months shall withhold 10% tax on the income before it is paid to that resident.

…"

In light of the aforesaid regulations:

By your own account, if you terminate a labor contract with an employee whose labor contract lasts more than 3 months on March 31, 2017, and you pay March 2017’s wages and salaries on April 10, 2017, PIT on such income will be withheld according to the progressive taxation table.   

If an employee signs a probationary employment contract having the term of less than 3 months (from February 6, 2017 to April 5, 2017) with you and you sign an official employment contract having the term of 1 year with that employee on April 6, 2017, when paying March 2017’s wages or salaries on April 10, 2017 (after conclusion of that official employment contract, you will have to withhold PIT from such income according to the progressive taxation table.

The Tax Department is sending this document for your information and compliance with regulations laid down in legislative documents mentioned herein./.

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