Joint Circular No. 19/2009/TTLT/BTC-BNV guiding the personal income tax collection and payment 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 the Government Decree No. 100/2008/NĐ-CP dated September 8, 2008 detailing certain provisions of the Personal Income Tax Law;

Pursuant to the Government Decree No. 85/2007/NĐ-CP dated May 25, 2007 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;

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 ensure compliance 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 stipulated by the Personal Income Tax Law as follows:

I. SCOPE OF APPLICATION

1. These Circulars guide 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 or police personnel working in ministries, sectors, and localities with income from salaries, wages, and other income with the nature of salaries and wages received in the form of money or non-monetary forms 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 who have other taxable incomes (other than income from salaries and wages) shall declare and pay taxes according to the 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 the Government Decree No. 100/2008/NĐ-CP dated September 8, 2008 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 confidential organizations of the Ministry of National Defense shall follow the guidance of the Ministry of Finance - Ministry of National Defense; individuals working in confidential organizations of the Ministry of Public Security shall follow the guidance of 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 the form of money or non-monetary forms, including:

1. 1 Salaries, wages, and other amounts with the nature of salaries and wages recorded in the labor contract or in the recruitment decision, salary increase decision, rank promotion decision, or military rank promotion decision.

1. 2 Allowances and subsidies, including living expenses, except for some allowances and subsidies as specified in Point 2 below.

1. 3 Various remunerations, bonuses, and other monetary or non-monetary benefits, including:

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

b) Bonuses in the form of money or non-monetary forms, except for the following bonuses:

- Bonuses accompanying state-awarded titles, including bonuses accompanying commendation titles and rewards according to the laws on commendation and reward, specifically:

+ Bonuses accompanying commendation titles such as: Outstanding Soldier of the Nation; Outstanding Soldier of the Ministry, Sector, Central Mass Organizations, Province, and City Directly Under the Central Government; Outstanding Soldier at the Base Level, Advanced Worker, Advanced Soldier;

+ Bonuses accompanying rewards such as: Orders, Medals; + Bonuses accompanying national honors such as the title of Mother Heroic Vietnam, Hero of the People's Armed Forces, Hero, Teacher, Doctor, Artist of Merit...

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

+ Bonuses accompanying Commemorative Medals, Badges;

+ 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. Amounts of allowances and subsidies not included in taxable income include:

2. 1 Subsidies and monthly allowances, including 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 according to the Regulation on Preferential Treatment for Persons Contributing to the Revolution;

b) Emergency hardship subsidies; occupational injury and occupational disease subsidies;

c) One-time childbirth and adoption subsidies;

d) Disability allowance;

đ) One-time retirement allowance; monthly pension;

e) Severance pay, unemployment benefit;

g) Subsidies for social evils according to the law;

h) Discharge allowance; demobilization allowance; job 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 job allowances for jobs or workplaces with hazardous and dangerous factors.

2. 3 Attraction allowances for new economic zones, economic bases, and islands far from the mainland with particularly difficult living conditions.

2. 4 Regional allowances as prescribed by law for individuals working in remote, isolated areas, and harsh climates.

2. 5 National defense and security allowances, including:

a) Long-term service allowances for confidential work;

b) National defense and security service allowances for individuals engaged in confidential work other than confidential work.

c) Allowance for responsibility in work related to protecting cryptographic secrets;

d) Allowance for responsibility in other key position works;

đ) Other special allowances for security and military in the key position sector (if any).

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, the application forms, and procedures for tax reduction shall be carried out according to the provisions at point 1,2, Section IV Part A Circular 84/2008/TT-BTC dated September 30, 2008, issued by the Ministry of Finance. Heads of units and directors of defense-security companies under the Government Key Position Administration shall consider and issue decisions on tax reductions and bear responsibility for their decisions.

III. TAX REGISTRATION, WITHHOLDING TAX, INCOME TAX RETURN, PAYMENT OF TAX, AND SETTLEMENT OF TAX

Matters concerning tax registration, withholding tax, income tax return, payment of tax, and settlement of personal income tax for individuals working in key position organizations shall be applied on a case-by-case basis as follows:

1. For individuals engaged in key position work who are not military personnel or public security officers working in ministries, sectors, and localities, the implementation shall follow the guidance provided in Circular No. 84/2008/TT-BTC dated September 30, 2008, issued by 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 Key Position Administration:

2.1 Tax Registration:

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

2.2 Withholding Tax:

a) Units paying income have the responsibility to withhold personal income tax and remit it to the Government Key Position Administration.

Withholding tax on income from wages and salaries shall be conducted monthly. Based on the taxable income from wages and salaries and other amounts with the nature of wages and salaries actually paid to the salary recipients, the unit paying income calculates the provisional deduction for dependents for each individual based on their registration. On the basis of remaining income and the progressive tax rate table specified in Circular No. 84/2008/TT-BTC dated September 30, 2008, issued by the Ministry of Finance, the unit paying income calculates the tax, withholds the tax, and retains the withheld tax to remit to the Government Key Position Administration.

If the unit paying income incurs payments to individuals outside its own organization, it must withhold tax at source according to the guidance provided in Circular No. 84/2008/TT-BTC dated September 30, 2008, issued by the Ministry of Finance, specifically as follows:

When paying fees, honoraria, or other payments to individuals performing services without signing labor contracts such as royalties; book translation fees; teaching fees; participation fees in associations, boards of management, boards of directors, management boards; fees for scientific and technical services; cultural services; sports services; design and construction service fees, legal service fees, with a total payment of income from VND 500,000 or more per transaction, tax must be withheld before payment to the individual according to the following rates:

- Withhold 10% of the income applicable to individuals with taxpayer identification numbers, individuals working in key position organizations, individuals under the Ministry of National Defense and the Ministry of Public Security.

- Withhold 20% of the income applicable to individuals without taxpayer identification numbers.

b) At the beginning of the year, no later than January 30, each salary recipient must declare and register the number of dependents eligible for deductions and submit the declaration form to the directly managing and paying unit for the unit paying income to use as the basis for calculating provisional dependent deductions. If there are changes in dependents during the year, a new declaration must be submitted.

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

The salary recipient only needs to submit a declaration form for dependents, certified by the organizational cadre agency, without having to provide proof of dependents, and bears responsibility for the truthfulness of the declaration for deductions.

2.3 Payment of Tax:

- Monthly, the unit paying income must remit the withheld tax to the Government Key Position Administration.

- Quarterly, no later than the 30th day of the first month of the next quarter, the Government Key Position Administration 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 Key Position Administration is responsible for determining the total personal income tax payable, the amount already paid, and remitting the remaining amount to the State Budget.

2.4 Settlement of Tax:

- Salary recipients do not need to prepare tax settlement documents.

- Units paying income shall settle taxes on behalf of each individual and report the consolidated annual tax settlement to the Government Key Position Administration.

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

- The Government Key Position Administration shall consolidate the personal income tax settlement for the entire administration and report the consolidated annual tax settlement to the Ministry of Home Affairs.

IV. IMPLEMENTATION

This Circular shall take effect forty-five days from the date of signature and shall apply to the collection and payment of personal income tax on salaries and wages of individuals working in Confidential Organizations from January 1, 2009.

The Department of Financial Planning - Ministry of Home Affairs shall guide the system of tax declaration and reporting forms; direct and inspect the declaration, payment, and settlement of personal income tax in accordance with this Circular and Circular No. 84/2008/TT-BTC dated September 30, 2008, issued by the Ministry of Finance.

In case of difficulties or obstacles during implementation, units are requested to promptly report to the Ministry of Finance and the Ministry of Home Affairs for study and resolution./.