In principle, only those with high incomes have to pay personal income tax, but there are many cases of probationary workers with low salaries but with a 10% tax deduction. Is such a business deduction legal?
Is the probationary subject to a 10% personal income tax deduction?
Pursuant to Clause 2, Article 3 of the Law on Personal Income Tax, income from salaries and wages is determined to be subject to personal income tax.
In which, the point I, clause 1, Article 25 of Circular 111/2013/TT-BTC stipulates that:
Organizations and individuals paying wages, remuneration, and other expenditures to resident individuals who do not sign labor contracts (as guided in Point c, d, Clause 2, Article 2 of this Circular) or sign labor contracts of less than three (03) months with a total income payment of two million (2,000,000 VND) /time or more, must deduct taxes at 10% on the previous income When paid to the individual.
Thus, if the employee and the employer have signed a probation contract or have a probation agreement in the labor contract for less than 03 months and the total salary paid to the employee is VND 02 million or more/ time, the enterprise is allowed to deduct 10% of personal income tax before paying the employee.
Therefore, if the probation is in the aforementioned case, the employer is completely allowed to deduct 10% of the salary paid to the employee to pay personal income tax.
How not to be deducted 10% personal income tax?
Pursuant to Point i, Clause 1, Article 25 of Circular 111/2013/TT-BTC, if the estimated total income after deductions is not enough to pay personal income tax, the employee can make a commitment send the enterprise as a temporary basis for not deducting 10% of tax.
An employee may make a temporary commitment that has not yet withheld tax if the following conditions are fully satisfied:
– Having a total income of VND 2 million/time or more.
– Resident individuals sign a probationary contract or a labor contract of fewer than 3 months to work.
– Only income is subject to a tax deduction (if you work at 02 or more places, you cannot make a commitment).
– Estimated total taxable income after deducting family circumstances has not reached the taxable level (estimate total income is 132 million VND/year or less if there are no dependents).
– Must register for tax and have a tax code at the time of commitment.
If the above conditions are satisfied, the employee can download and fill out Form 02/CK-TNCN and then send it to the enterprise so as not to be deducted 10% of salary.
However, from January 1, 2022, this form of personal income tax commitment will be made according to the new form, Form 08/CK-TNCN, which is issued together with Circular 80/2021/TT-BTC.
The commitment statement applies when the individual receives income and estimates the total income in the calendar year is not yet subject to PIT.)
Above is the answer to the question: "Is it right or wrong to try to get 10% of personal income tax deducted?"
Collected from source
Author: Binh Thao
Consulted by: Lawyer Nguyen Duc Hung