Joint Circular No. 19/2009/TTLT-BTC-BNV guiding the personal income tax collection and payment regime for individuals working in confidential organizations

JOINT CIRCULAR

Guidelines on the collection and payment of personal income tax for individuals working in confidential organizations.

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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. 48/2008/NĐ-CP dated April 17, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Home Affairs;

The Minister of Finance prescribes the level of collection,

To be consistent with the special confidentiality nature of the confidential sector, the Ministry of Finance and the Ministry of Home Affairs provide guidelines on the collection and payment of personal income tax for individuals working in confidential organizations who have taxable income from salaries and wages as prescribed by the Personal Income Tax Law as follows:

I. SCOPE OF APPLICATION

1. This Circular provides guidelines on the collection and payment of personal income tax for individuals working in confidential organizations, including those receiving salaries in defense-security units under the Government Confidential Organization Board and individuals engaged in confidential work but not military personnel or public security officers working in ministries, sectors, and localities with income from salaries, wages, and other income with the nature of salaries and wages received in various forms, either in cash or non-cash, from defense-security units under the Government Confidential Organization Board; ministries, sectors, and localities (hereinafter referred to as the paying entity).

Individuals working in confidential organizations with other taxable incomes (other than income from salaries and wages) 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 dated September 30, 2008 of the Ministry of Finance).

2. Individuals working in the Ministry of Defense's confidential organizations shall follow the guidelines provided by the Ministry of Finance – Ministry of Defense; individuals working in the Ministry of Public Security's confidential organizations shall follow the guidelines provided by the Ministry of Finance – Ministry of Public Security.

II. TAXABLE INCOME FROM SALARIES AND WAGES

1. Taxable income from salaries and wages includes all income that the salary recipient receives from the paying entity in various forms, either in cash or non-cash, including:

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

1.2 Allowances and subsidies, including living expenses, which the salary recipient receives, except for some allowances and subsidies as specified in Point 2 below.

1.3 Various remuneration, bonuses, and other benefits in cash or non-cash, including:

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

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

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

+ Bonuses accompanying commendations include: National Model Worker; Model Worker at the ministry, sector, central organization, provincial, and centrally-administered city level; Model Worker at the grassroots level, Advanced Worker, Model Soldier;

+ 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, Teacher, Doctor, Artist Member of the National Assembly...

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

+ Bonuses accompanying Commendation Badges, Medals;

+ Bonuses accompanying Certificates of Merit, Letters of Commendation;

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 accompanying national and international awards recognized by the Vietnamese state;

- Bonuses for technological improvements, inventions, and discoveries recognized by competent state authorities;

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

c) Other benefits received from the paying entity.

2. Allowances and subsidies not included in taxable income include:

2.1 Subsidies and monthly allowances, and one-time subsidies, 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 recipients of allowances and subsidies under the Law on Preferential Treatment for Persons Contributing to the Revolution;

b) One-time hardship subsidies; occupational injury and occupational disease subsidies;

c) One-time childbirth and adoption subsidies;

d) Disability allowance;

đ) One-time retirement subsidy; monthly pension;

e) Severance pay, unemployment benefit, and job loss compensation;

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

h) Discharge allowance; demobilization allowance; employment creation allowance; one-time allowance when officers and professional soldiers cease serving in the military; one-time allowance when individuals engaged in confidential work cease working in confidential organizations;

i) Other allowances paid by the Social Insurance Fund.

2.2 Hazardous and dangerous area allowances for industries, professions, or jobs in workplaces with hazardous and dangerous 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 individuals working in remote, isolated areas with harsh climates.

2.5 Defense and security allowances, including:

a) Seniority allowance for cryptographic staff;

b) National defense and security service allowance for personnel engaged in other work in cryptographic organizations;

c) Responsibility allowance for protecting cryptographic secrets;

d) Responsibility allowance for other cryptographic work;

đ) Other special allowances for national security and military within the cryptographic sector (if applicable).

3. Tax reduction:

In cases where taxpayers encounter difficulties due to natural disasters, fires, accidents, or 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 owed. The determination of the amount of tax reduction, application procedures, and formalities for tax reduction shall be carried out in accordance with the provisions at point 1, 2, Section IV Part A Circular 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance. Heads of units and directors of defense-security companies under the Government Cryptographic Agency shall consider and issue decisions on tax reductions and bear responsibility for their decisions.

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

Matters concerning tax registration, deduction, declaration, payment, and settlement of personal income tax for individuals working in cryptographic organizations shall be applied as follows:

1. For cryptographic staff who are not military or public security personnel working in ministries, sectors, and localities, they shall follow the guidelines set forth in Circular No. 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance. Allowances and subsidies that are not included in taxable income shall be implemented according to the provisions at point 2, Section II of this Circular.

2. For individuals receiving salaries in agencies, units, and defense-security companies under the Government Cryptographic Agency:

2.1 Tax Registration:

Individuals receiving salaries in agencies, units, and defense-security companies under the Government Cryptographic Agency temporarily do not need to register for tax.

2.2 Tax Deduction:

a) Units paying income have the responsibility to deduct personal income tax and remit it to the Government Cryptographic Agency.

Monthly deductions from income derived from salaries and wages are based on the taxable income from salaries and wages and other amounts having the nature of salaries and wages actually paid to the recipient. Based on the remaining income and the progressive tax rate table specified in Circular No. 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance, the unit paying income calculates the tax, deducts the tax, and retains the deducted tax to remit to the Government Cryptographic Agency.

If a unit paying income pays income to individuals outside its own organization, it must deduct tax at source in accordance with the guidance provided in Circular No. 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance, specifically as follows:

When paying fees, honoraria, or other payments to individuals providing services without signing a labor contract such as royalties; book translation 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, if the total amount paid exceeds VND 500,000 per transaction, then tax must be deducted before payment to the individual according to the following rates:

- Deduct 10% of the income for individuals with a taxpayer identification number, individuals working in cryptographic organizations, and individuals belonging to the Ministry of Defense and the Ministry of Public Security.

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

b) At the beginning of each year, no later than January 30, each individual receiving salary must declare and register the number of dependents eligible for tax deductions and submit the declaration form to the directly managing and income-paying unit for the unit to use as a basis for calculating temporary dependent deductions. Any changes in dependents during the year must be reported again.

If an individual receiving salary shares dependents with another taxpayer, such as a spouse or sibling, they must agree to declare dependents according to the principle that each dependent can only be deducted once from one taxpayer in a tax year; if both the individual receiving salary and other taxpayers sharing the same dependent claim deductions, they will be subject to penalties under the Law on Tax Administration.

Individuals receiving salary only need to submit a declaration form for dependents, certified by the organizational cadre agency, without submitting proof of dependents, and are responsible for the truthfulness of the declaration.

2.3 Tax Payment:

- Monthly, the unit paying income must remit the deducted tax to the Government Cryptographic Agency.

- Quarterly, no later than the 30th day of the first month of the next quarter, the Government Cryptographic Agency transfers the personal income tax collected from units to the state budget.

- By May 30 of the following year, based on the settlements made by the units paying income, the Government Cryptographic Agency is responsible for determining the total personal income tax payable, the amount already paid, and remitting the remaining balance to the State Budget.

2.4 Tax Settlement:

- Individuals receiving salary do not need to prepare tax settlement documents.

- Units paying income shall settle taxes on behalf of each individual and report the consolidated annual settlement to the Government Cryptographic Agency.

- In cases where, upon settling personal income tax for specific individuals, the tax deducted throughout the year exceeds the tax owed, the unit paying income shall offset the excess against the total tax to be deducted by the unit. If the offset is insufficient, it shall be deducted from the tax due of the individual in the following month. If a taxpayer wishes to refund excess tax paid, they must submit a request for tax refund to the unit paying income, which will use the monthly withheld tax to refund the excess, and the remainder will be remitted to the Government Cryptographic Agency.

- The Government Cryptographic Agency shall aggregate the individual income tax settlement of the entire agency and report the consolidated settlement with the annual budget settlement to the Ministry of Home Affairs.

IV. IMPLEMENTATION

This Circular shall take effect 45 days from the date of signature and shall apply to the collection and payment of individual income tax on salaries and wages for employees working in cryptographic organizations from January 1, 2009.

The Department of Planning and Finance - Ministry of Home Affairs shall guide the system of reporting forms for tax declaration and settlement; supervise and inspect the declaration, payment of taxes and individual income tax settlement according to this Circular and Circular No. 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance.

In the course of implementation, if there are difficulties or obstacles, units are requested to promptly reflect them to the Ministry of Finance and the Ministry of Home Affairs for study and resolution./.