Official Letter No. 1430/CTDAN-TTHT on Personal Income Tax Finalization for Transferred Employees

GENERAL DEPARTMENT OF TAXATION DA NANG CITY TAX DEPARTMENT No. 1430 /CTDAN-TTHT Regarding: Personal Income Tax Finalization for Transferred Employees		SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness Da Nang, February 24, 2025
To:	Est Rouge Technologies Joint Stock Company Tax Code: 0401864688 Address: Lot 31-32 Nguyen Huu An, Nai Hien Dong Ward, Son Tra District, Da Nang City

The Da Nang City Tax Department has received Document No. 250201/CV-ERT dated February 14, 2025, from Est Rouge Technologies Joint Stock Company (referred to as the Company) requesting guidance on finalizing Personal Income Tax (PIT) for transferred employees. Regarding this matter, the Da Nang City Tax Department has the following opinion:

Pursuant to Points d.1 and d.2, Clause d, Article 8 of Decree No. 126/2020/ND-CP dated October 19, 2020, by the Government, which regulates the PIT finalization:

“d) Personal income tax on organizations and individuals who pay taxable income from salaries and wages; individuals with income from salaries and wages may authorize organizations or individuals paying income to finalize tax on their behalf; individuals with income from salaries and wages directly finalize tax with the tax authority. Specifically as follows:

d.1) Organizations and individuals paying income from salaries and wages have the responsibility to declare tax finalization and finalize on behalf of individuals who have authorized them, regardless of whether there is tax withholding or not. In cases where the organization or individual does not pay income, no PIT finalization is required. If an employee is transferred from the old organization to a new organization due to merger, consolidation, division, restructuring, or if both organizations are part of the same system, the new organization is responsible for finalizing tax on behalf of the employee for income paid by the old organization and reclaiming the tax withholding certificate issued by the old organization (if any).

d.2) Resident individuals with income from salaries and wages may authorize organizations or individuals paying income to finalize tax, as follows:

Individuals with income from salaries and wages under a labor contract of 3 months or more at one place and actually working there at the time the income-paying organization or individual performs tax finalization, including cases where the individual does not work for 12 full months in the year. In cases where the employee is transferred from the old organization to a new organization according to Point d.1 of this Clause, the individual may authorize tax finalization to the new organization.”

Accordingly, if an employee has a labor contract of 3 months or more and is transferred from a subsidiary company to the parent company and is working at the time the parent company finalizes the tax, the employee is allowed to authorize the parent company to finalize their PIT in accordance with Point d.2, Clause d, Article 8 of Decree No. 126/2020/ND-CP.

The parent company is responsible for finalizing the tax on behalf of the employee for both the income paid by the subsidiary and reclaiming the PIT withholding certificates issued by the subsidiary to the employee from January 1, 2024, to November 30, 2024, as directed in Point d.1, Clause d, Article 8 of Decree No. 126/2020/ND-CP.

The Da Nang City Tax Department provides this reply for the Company’s reference and implementation. Should you need further assistance, please contact the Da Nang City Tax Department (Taxpayer Support and Communication Department) at: 190 Phan Dang Luu Street, Hoa Cuong Bac Ward, Hai Chau District, Da Nang City, or refer to the Tax Department's official website for more information at: https://danang.gdt.gov.vn.

Recipients: As above; Leadership of the Tax Department (for reporting); Tax Department Units: NVDTPC, TTKT2; File: VT, TTHT.

On behalf of the Director DEPUTY DIRECTOR   Luu Duc Sau

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