AUTOMATIC PIT REFUND, 5 COMMON INQUIRIES

The new decision regarding the application of automatic PIT refund (personal income tax) by the General Department of Taxation of Vietnam marks an important step forward in the tax reform process, helping to reduce administrative burdens and facilitate taxpayers. The automatic PIT refund process is still relatively new, and as such, many questions remain about its implementation and related procedures. The following article will address some common inquiries from personal income taxpayers.

1. What is automatic PIT refund?

Automatic PIT refund refers to the process where PIT refund procedures are handled automatically through the tax authority’s information technology system, including tasks such as data aggregation to determine the filing obligation, creating the final settlement declaration, processing the refund, and conducting post-refund controls.

Accordingly, taxpayers may use the eTax Mobile application, the electronic tax application for individuals provided by the General Department of Taxation, to complete the procedures based on automatically aggregated information and use the pre-filled declaration form available on the system, rather than performing each individual step under the previous process.

The automatic PIT refund process is expected to simplify administrative procedures, reduce processing times, and minimize risks in tax management. However, it is important to note the specific subjects and conditions for applying the automatic PIT refund.

2. Who is eligible for automatic PIT refund?

Eligible individuals for the automatic PIT refund process

According to the provisions in Decision 108/QD-TCT of 2025 regarding the Automatic Personal Income Tax (PIT) Refund Process issued by the Director General of the General Department of Taxation, this automatic process is applied to resolve PIT refund cases for individuals who directly declare taxes.

In this context, individuals who directly declare taxes include resident individuals earning income from salaries or wages in the following cases (according to Point d3, Clause 4, Article 8 of Decree 126/2020/ND-CP):

– Individuals who have additional taxes payable or excess taxes paid that they wish to refund or offset against the next tax period. However, the following cases are excluded:

+ Individuals whose additional taxes payable after settlement for each year are equal or les than VND50,000;

+ Individuals whose taxes payable are lower than the taxes already temporarily paid and do not request a refund or offset against the next tax period;

+ Individuals receiving employment income under labor contracts of 3 months or longer with an employer, as well as incidental income from other sources, whose average monthly income during the year does not exceed VND 10 million and who have had PIT withheld at the rate of 10%. In the absence of a request, such individuals are not required to file a tax settlement for this income.

+ Individuals whose employers purchase life insurance (excluding voluntary pension insurance) or other non-mandatory insurance, where the insurance premiums have been deducted by the employer or the insurance company at the rate of 10% on the corresponding premiums for the portion purchased or contributed by the employer for the employee. In such cases, the employee is not required to file a PIT settlement for this income.

– Individuals who are present in Vietnam for less than 183 days in the first calendar year but remain in Vietnam for 183 days or more within a continuous 12-month period, commencing from their first day of arrival.

– Foreign individuals who conclude their employment contract in Vietnam and submit a tax declaration to the tax authorities prior to their departure from Vietnam.

– Resident individuals earning salary or wage income who qualify for tax reductions due to circumstances such as natural disasters, fires, accidents, or serious illnesses that impact their ability to fulfill tax obligations.

Conditions for the implementation of the automatic PIT refund process

In order to be eligible for an automatic PIT refund, the refund request must meet the following conditions:

– Tax obligations have been fulfilled: At the time of processing the PIT refund application, the income-paying organization must have fulfilled its tax withholding obligations, or the total PIT paid by the taxpayer (individual) must have been fully remitted to the state budget during the tax finalization period when the taxpayer requests the refund;

– Data consistency with the tax management database: The PIT refund application must have the “Total taxable income” field matching the data recorded in the tax finalization period according to the tax authority’s management database at the time of processing the application. Additionally, the “Total tax refund requested” field must be less than or equal to the aggregated data in the tax finalization period according to the tax authority’s management database at the time of processing the application.

– Verified and linked receiving account: The taxpayer’s refund receiving account information must be verified and linked with the tax authority’s management database.

3. What PIT taxpayers need to do?

PIT taxpayers requesting a refund should check the information automatically generated by the eTax Mobile system and take the following actions:

– In agree: To confirm and submit the tax finalization application according to the instructions on the application.

– If not agree: To modify the information in the corresponding fields, provide reasons for discrepancies with the tax authority’s suggested data, and submit the tax declaration application along with supporting documents.

Once the declaration has been confirmed, the system will automatically create and submit the refund request; verify and determine whether the application meets the criteria for automatic processing; and proceed with the procedures to resolve the automatic PIT refund as per the regulations.

4. When will the automatic PIT refund process begin?

The automatic PIT refund process will be applied starting from the 2024 tax period, in accordance with the effective date of Decision 108/QD-TCT (January 24th, 2025).

5. When is the deadline for PIT delaration for individuals who file their own tax return?

For PIT taxpayers who directly declare their taxes, the deadline for submitting the tax return is the last day of the 4th month following the end of the calendar year (as stipulated in Point b, Clause 2, Article 44 of the 2019 Tax Administration Law)

>> DO NON-RESIDENT INDIVIDUAL HAVE TO PAY PERSONAL INCOME TAX? https://linconlaw.vn/do-non-resident-individual-have-to-pay-personal-income-tax/

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