JOINT CIRCULAR No. 123/2008/TTLT-BTC-BCA GUIDING THE SYSTEM OF COLLECTION AND PAYMENT OF PERSONAL INCOME TAX FOR OFFICERS, NON-COMMISSIONED OFFICERS, WORKERS, AND STAFF RECEIVING SALARIES UNDER THE MINISTRY OF PUBLIC SECURITY

JOINT CIRCULAR

Guidelines on the collection and payment of personal income tax for officers, non-commissioned officers, workers, and employees receiving salaries under the Ministry of Public Security

civil servant receiving salary under the Ministry of Public Security

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Pursuant to the Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006;

Pursuant to the Personal Income Tax Law No. 04/2007/QH12 dated November 21, 2007;

Pursuant to Decree No. 100/2008/NĐ-CP dated September 8, 2008 of the Government detailing certain provisions of the Personal Income Tax Law;

Pursuant to Decree No. 85/2007/NĐ-CP dated May 25, 2007 of the Government detailing the implementation of certain provisions of the Tax Administration Law;

Pursuant to Decree No. 204/2004/NĐ-CP dated December 14, 2004 of the Government on the wage system for civil servants, public officials, and armed forces;

Pursuant to Decree No. 136/2003/NĐ-CP dated November 14, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Public Security;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

To be consistent with the specific activities of units under the Ministry of Public Security, the Ministry of Finance and the Ministry of Public Security provide guidelines on the collection and payment of personal income tax for officers, non-commissioned officers, workers, and employees receiving salaries under the Ministry of Public Security who have taxable income from wages and salaries as prescribed by the Personal Income Tax Law as follows:

I. SCOPE OF APPLICATION

This Circular guides the collection and payment of personal income tax for officers, non-commissioned officers, workers, and employees receiving salaries (hereinafter referred to as taxpayers) in agencies, units, and public service organizations under the Ministry of Public Security that have income from wages, salaries, and other income with the nature of wages and salaries received in monetary or non-monetary forms from agencies and units under the Ministry of Public Security (hereinafter referred to as payers).

If taxpayers have other taxable incomes (other than income from wages and salaries), they shall declare and pay taxes according to the guidelines set forth in Circular No. 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance guiding the implementation of certain provisions of the Personal Income Tax Law and guiding the implementation of Decree No. 100/2008/NĐ-CP dated September 8, 2008 of the Government detailing certain provisions of the Personal Income Tax Law (hereinafter referred to as Circular No. 84/2008/TT-BTC).

II. TAXABLE INCOME FROM WAGES AND SALARIES

1. Taxable income from wages and salaries includes all income that taxpayers receive from payers in monetary or non-monetary forms, including:

1.1. Wages, salaries, and other amounts with the nature of wages and salaries recorded in labor contracts or in recruitment decisions, salary increase decisions, rank promotion decisions, and military rank promotions.

1.2. Allowances and subsidies, including living expenses, which taxpayers receive, except for some allowances and subsidies as specified in Point 2 below.

1.3. Fees, bonuses, and other benefits in monetary or non-monetary forms, including:

a) Fees for participating in scientific and technical projects; fees for participating in projects and programs; royalties for writing books, articles, translating materials; fees for teaching, performing arts, sports, advertising services...;

b) Bonuses in monetary or non-monetary forms, excluding the following bonuses:

- Bonuses accompanying state-awarded titles, including bonuses accompanying commendations and rewards as prescribed by laws on commendation and reward, specifically:

+ Bonuses accompanying commendations include: National Model Soldier; Model Soldier of the People's Public Security Force, Model Soldier at the grassroots level, Advanced Worker, Model Soldier; Outstanding Student, Excellent Student, etc.

+ Bonuses accompanying rewards include: Orders, Medals of various types;

+ Bonuses accompanying national honors such as the title of Mother Heroic Vietnam, Hero of the People's Armed Forces, Hero of Labor, Teacher, Doctor, People's Artist, etc.;

+ Bonuses accompanying the Ho Chi Minh Award, State Awards;

+ Bonuses accompanying Commendation Certificates, Letters of Commendation;

- Bonuses accompanying national and international awards recognized by the Vietnamese State;

The authority to issue commendation decisions, bonus amounts accompanying commendations, and award forms as mentioned above must comply with the provisions of the Law on Commendation and Awards.

- Bonuses for technological improvements, inventions, and discoveries recognized by competent state authorities or the Ministry of Public Security;

- Bonuses for achievements in combating crime and protecting national security; bonuses for research achievements serving national security protection; in the patriotic security movement, the whole people's movement for national security;

- Bonuses for reporting violations of the law to competent state authorities.

c) Other benefits that taxpayers receive from payers.

2. Allowances and subsidies not included in taxable income, including:

2.1. Monthly preferential allowances and one-time allowances, including:

a) Allowances and subsidies for war invalids, disabled veterans, relatives of martyrs; allowances and subsidies for revolutionary cadres; allowances and subsidies for heroes of the armed forces, heroes of labor, and other beneficiaries of preferential treatment under the Law on Preferential Treatment for Persons with Merit;

b) One-time allowances for sudden difficulties, work injury allowances, occupational disease allowances;

c) One-time allowances for childbirth or adoption;

d) Allowances for reduced working capacity;

đ) One-time retirement allowances; monthly pensions;

e) Severance pay, unemployment benefits;

g) Allowances for addressing social evils as prescribed by law;

h) Discharge allowances; demobilization allowances; job creation allowances; one-time allowances when officers and non-commissioned officers of the People's Public Security cease service without meeting retirement conditions or transferring to another profession;

i) Other allowances paid by Social Insurance;

2.2. Hazardous and dangerous area allowances for industries, professions, or jobs in workplaces with hazardous factors;

2.3. Attraction allowances for new economic zones, economic bases, and remote islands with particularly difficult living conditions;

2.4. Regional allowances as prescribed by law for those working in remote, isolated areas, and harsh climates;

2.5. National defense and security allowances, including:

a) Special allowances;

a) Special allowance;

b) Seniority allowance for officers and non-commissioned police officers;

c) National defense and security service allowance for workers and civil servants in the police force;

d) Special allowances for security include:

- Regulations and policies for officers, non-commissioned officers, and soldiers undertaking particularly arduous, dangerous, or hazardous tasks; when participating in training, combat, readiness duty, exercises, enforcement, flood and storm prevention, accident and injury prevention, search and rescue operations, and other missions;

- Regulations and policies for police forces directly participating in reinforced teams working in the Central Highlands, Southwest, Northwest regions, and border provinces of Vietnam-Laos;

- Regulations and policies for police officers and soldiers working in mountainous and island areas;

- Special regulations and policies for traffic order and safety police forces and specialized forces combating drug crimes;

- Special allowances for certain judicial positions and responsibilities according to the profession of inspection for police inspectors, responsibility allowances according to the profession for party inspection officials, and responsibility allowances in anti-corruption activities within the People's Public Security;

- Special regulations and policies for investigation forces and criminal pursuit forces within the People's Public Security;

- Allowances for police officers and soldiers directly involved in management, education, care, medical examination, and combating individuals infected with HIV/AIDS;

- Allowance for public security officers serving to protect international conferences held in Vietnam, protecting major national holidays, festivals, and traditions;

- Preferential allowances for officers, non-commissioned officers, and soldiers in guard duties within the People's Public Security;

- Special allowances and special benefits for intelligence forces;

- Prison management allowances, educational facility management allowances, juvenile detention center management allowances; temporary detention facility management allowances under the Ministry of Public Security;

- Responsibility allowance for protecting confidential codes;

- Regulations and policies for forces performing tasks at K and C locations;

- Training allowances for police officers and soldiers serving to protect international conferences held in Vietnam, national holidays, festivals, and traditional events;

- Other special security allowances for police forces as prescribed by law;

3. Tax reduction:

In cases where taxpayers encounter difficulties due to natural disasters, fires, accidents, serious illnesses affecting their ability to pay taxes, they may be considered for tax reduction corresponding to the extent of damage but not exceeding the amount of tax payable. The determination of tax exemptions and reductions, and the procedures for tax reduction applications are stipulated in Point 1 and Point 2, Section IV, Part A of Circular No. 84/2008/TT-BTC. The heads of public security organs of provinces and centrally-administered cities, and budgetary units at level II shall examine and issue decisions on tax reduction and bear responsibility for their decisions.

III. TAX REGISTRATION, DEDUCTION, DECLARATION, PAYMENT, AND SETTLEMENT

1. Matters concerning tax registration, deduction, declaration, payment, and settlement of individual income tax from salaries and wages of taxpayers in public institutions under the Ministry of Public Security established by the Ministry of Public Security in specific cases are as follows:

1.1. Tax Registration

Taxpayers in military units and public institutions with revenue under the Ministry of Public Security temporarily do not need to register for tax.

1.2. Tax Deduction

a) Units directly paying income have the responsibility to deduct individual income tax and remit it to the account of the superior unit. Public security organs of provinces and centrally-administered cities, and budgetary units at level II directly collect and consolidate the individual income tax of subordinate units and remit it to the State Budget.

Monthly deductions of tax from salaries and wages are based on taxable income from salaries and wages and other amounts having the nature of salaries and wages actually paid to taxpayers. The paying unit calculates the provisional family deduction for each taxpayer based on the registration of each person. Based on the remaining income and the progressive tax rate table specified in Circular No. 84/2008/TT-BTC, the paying unit calculates the tax, deducts it, and retains the deducted tax to remit to the State Budget.

If a unit has new payments to individuals outside the organization, it must deduct tax at source according to the guidelines in Circular No. 84/2008/TT-BTC dated September 30, 2008, issued by the Ministry of Finance, specifically as follows:

Units paying fees, honoraria, and other expenses to individuals providing services without signing labor contracts such as royalties; book fees; teaching fees; participation fees in associations, boards of directors, boards of members, management boards; fees for scientific and technical services; cultural services; sports services; consulting design construction services, legal services, with a total payment of VND 500,000 or more per transaction, must deduct tax before payment to the individual at the following rates:

- Deduct 10% of the income for individuals who have a tax identification number and those under the Ministry of Public Security.

- Deduct 20% of the income for individuals without a tax identification number.

Units paying income subject to tax deduction as above must provide withholding tax certificates upon request of the individual being taxed. The tax authority is responsible for providing withholding tax certificates for individual income tax to the paying unit according to the application form (Form No. 17/TNCN issued together with Circular No. 84/2008/TT-BTC of the Ministry of Finance).

b) At the beginning of the year, no later than January 31, each taxpayer must declare and register the number of dependents eligible for family deduction and submit the Declaration Form to the direct managing and paying unit for the paying unit to use as a basis for calculating provisional dependent deductions; if there are changes in dependents during the year, they must re-declare.

In cases where taxpayers share dependents such as spouses or siblings, they must agree to declare dependents according to the principle that each dependent can only be deducted once from the income tax of one taxpayer in a given tax year; if taxpayers sharing a dependent must support them and declare deductions for family allowances, they will be subject to penalties under the Law on Tax Administration.

Taxpayers are only required to submit the Declaration Form for Dependents, confirmed by the management agency or organization, without having to provide proof of dependents, and are responsible for the accuracy of their declarations for deductions.

1.3 Payment of Tax

a) Monthly, the entity paying income must remit the withheld tax to the higher-level financial authority.

b) Quarterly, no later than the 30th day of the first month of the following quarter, provincial public security organs, centrally-administered city public security organs, and level II budgetary units must remit the individual income tax collected from their units and subordinate units into the State Budget through their accounts at the State Treasury in the province or city where the transactions take place.

c) By the latest date of March 30 of the following year, based on the finalization of tax payments, provincial public security organs, centrally-administered city public security organs, and level II budgetary units have the responsibility to determine the total amount of individual income tax due, the amount already paid, and to pay the remaining balance into the State Budget.

1.4 Finalization of Tax

a) Individual taxpayers are not required to prepare tax finalization reports;

b) Income-paying entities shall finalize taxes on behalf of each individual and report the total amount of tax withheld during the year according to the guidelines for finalizing taxes on income from salaries and wages applicable to income-paying entities, concurrently with annual budget finalization reports submitted to higher authorities up to the Ministry of Public Security.

c) When finalizing individual income tax for specific cases, if the amount of tax withheld during the year exceeds the tax liability, the income-paying entity shall offset this against the total tax to be withheld by the entity. If the offset is insufficient, it shall be deducted from the tax generated by the individual in the following month. If a taxpayer wishes to claim a refund of overpaid tax, they must submit a refund request to the income-paying entity, which will use the individual's withheld income tax for the month to make the refund, and the remainder will be paid into the State Budget.

d) The tax declaration forms and finalization reports must be stored by the income-paying entity according to regulations on accounting record retention and simultaneously reported to higher-level units up to the Ministry of Public Security.

2 Officers, non-commissioned officers, workers, and staff working in state-owned enterprises operating for public benefit, security companies within the police force, and units not covered by Section I of this Circular must comply with tax registration, declaration of family allowances, finalization of taxes, and refunds as stipulated in Circular No. 84/2008/TT-BTC dated September 30, 2008, issued by the Ministry of Finance.

IV. IMPLEMENTATION

This Circular takes effect from January 1, 2009. Other matters related to income from salaries and wages not specified in this Circular shall be implemented according to the guidelines set out in Circular No. 84/2008/TT-BTC dated September 30, 2008, issued by the Ministry of Finance.

The Ministry of Public Security shall guide the system of reporting and tax declaration forms, tax finalization documents; supervise and inspect the declaration, payment, and finalization of individual income tax within the organizational structure of public security units.

During implementation, if there are difficulties or issues, units are requested to promptly report to the Ministry of Finance and the Ministry of Public Security for research and resolution./.