In business activities of enterprises, payment for employees take a huge portion in the budget. To make the levy of personal income tax more convenient, the obligations to perform tax audit for this kind of tax belongs to enterprises, as prescribed by the law.
According to the law on tax administration, tax audit is determination of payable tax amount of a taxation year or a period from the beginning of the taxation year to the time of termination of taxable activities or from the commencement to the termination of taxable activities.
According to the Law on Personal income tax 2007 (adjusted and supplemented in 2012) and Decree No. 83/2013/NĐ-CP providing guidelines for the Law on Tax administration:
- Organizations and individuals paying taxable income have the obligations to declare, deduct, pay tax and perform tax audit for those;
- Individuals who receives taxable income have the obligation to declare, deduct, pay tax perform tax audit for other incomes.
Procedures and cases in which personal income tax must be audited are regulated in Circular No. 156/2013/TT-BTC, Circular No. 119/2014/TT-BTC, Circular No. 92/2015/TT-BTC:
For organizations and individuals pay taxable income:
In this case, organizations and individuals hiring employees, such as enterprises, shall pay them income, so it would be more convenient if these organizations and individuals perform tax audit. Employees shall authorize those organizations and individuals to perform tax audit on behalf of them. Authorization form is the form No. 04-2/TNCN as prescribed in Circular No. 156/2013/TT-BTC and copies of invoices or documents proving charity, humanitarian contribution (if any).
Cases in which employees authorized organizations and individuals to perform tax audit:
- The employee only earns income from wages and signed a labor contract with the organization or individual paying that income and the employee is still working there when authorizing, even if he/she has not worked for full 12 months in the year;
- The employee earn income from wages and signed a labor contract with the organization or individual paying that income and the employee is still working there when authorizing, even if he/she has not worked for full 12 months in the year. Besides that, he/she earns an additional income in other places and have had 10% tax deducted from that income by the payer shall not be audited if not requested;
- The employee who is moved from the old organization to the new one in case the old one is divided, split, amalgamated, merged, transformed, dissolved or shut down. At the end of the year, if the employee authorized the new organization to perform tax audit, the organization shall collect all the documents issued by the old one to prove tax deducted and to establish grounds for tax audit.
A dossier for personal income tax audit includes:
- The declaration form using the form No. 05/KK-TNCN prescribed in Circular 156/2013/TT-BTC;
- The table forms No. 05-1/BK-TNCN, 05-2/BK-TNCN, 05-3/BK-TNCN prescribed in Circular 156/2013/TT-BTC.
Directly performing personal income tax audit:
When an employee earns income from wages (but does not authorize the payer, such as organizations or individuals to perform tax audit on behalf of his/her) or a person earns income from an insurance agents, lottery agents or multi-level marketing, he/she shall directly perform personal income tax audit.
A dossier for personal income tax audit includes:
- The declaration form using the form No. 09/KK-TNCN prescribed in Circular 156/2013/TT-BTC;
- The annex form No. 09-1/PL-TNCN, No. 09-3/PL-TNCN (if deductions for dependents is claimed), No. 09-4/PL-TNCN prescribed in Circular 156/2013/TT-BTC;
- Photocopies of documents proving the amount of tax deducted, paid in the year or paid overseas (if any).
If the payer does not provide he/she documents proving tax deduction due to shutdown, tax agencies shall base on their database to handle with this without requirement of these documents.
If due to foreign jurisdiction, foreign tax agencies do not verify paid tax, the tax-payer shall submit a photocopy of the Certificate of Tax deduction (specifying the tax declaration number) issued by the income payer or a photocopy of banking notice of overseas tax payment which is certified by the tax-payer.
- Photocopies of invoices, documents proving the contributions to charity funds, humanitarian funds or scholarship funds (if any);
- If the person earns income from an international organization, embassy, consulate and earns income abroad, documents proving the amount of money paid by these income-payer shall be required and must be attached with a Certificate of annual income, using the form No. 20/TXN-TNCN prescribed in Circular No. 156/2013/TT-BTC.
Dossiers shall be submit at tax agencies as follows:
- When the person perform tax audit directly: submit the dossier to the Department of Taxation where he/she submit tax declaration in the year;
- When the person earns income from wages from two and more income-payers:
The dossier shall be submitted at tax authority of the income payer in case tax deduction is performed by the income payer;
- When the person changes his/her work place and the latest income-payer deducted tax, the dossier shall be submitted to the tax authority of that income-payer;
- When the person changes his/her work place and the latest income-payer does not deducted tax, the dossier shall be submitted at the sub-department of tax where the person resides;
- If the person does not have tax deducted at any organization or individual paying income, the dossier shall be submitted at the sub-department of tax where the person resides;
- If the person does not sign a labor contract or sign a labor contract which lasts under 03 months or sign service contract and earns income from two and more income-payers and have 10% tax deducted, the dossier shall be submitted to the sub-department of tax where the person resides;
- If the person earns income from one or more income-payers but at the time of audit, he/she does not work for any organization or individual, the dossier shall be submitted to the sub-department of tax where the person reside;
- If the person runs a registered insurance agent, lottery agent or multi-level marketing agent, the dossier shall be submitted at the sub-department of tax where the business is located; if the business is not registered, submit at the sub-department of tax where the person resides.