Ms. Linh asked, when it comes to quarterly/monthly reporting, do she have to declare personal income tax of employees at the business location to the tax authority in Ho Chi Minh City or Ben Tre province (old)?

Regarding this issue, Ho Chi Minh City Tax Department 2 has the following opinion:

Pursuant to Clause 3, Article 42 of the Law on Tax Administration No. 38/2019/QH14:

"Article 42. Principles of tax declaration and calculation

… 3. Taxpayers shall declare and calculate taxes at the competent local tax authority where their headquarters is located. In case the taxpayer conducts centralized accounting at the head office and has a subsidiary unit in a different provincial administrative unit where their headquarters is located, the taxpayer shall declare taxes at the head office and calculate taxes, and allocate tax obligations to each locality where the state budget revenue is enjoyed. The Minister of Finance shall specify this clause in detail".

Pursuant to Clause 2, Article 11 of Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government detailing a number of articles of the Law on Tax Administration:

"2. Place of submission of tax declaration dossiers for taxpayers with activities and business in many other provincial-level localities where the taxpayer has its head office as prescribed in Point b, Clause 4, Article 45 of the Law on Tax Administration shall perform centralized accounting at the head office (except for the cases prescribed in Clauses 1, 3, 4, 5 and 6 of this Article) at the tax authority managing the head office. At the same time, taxpayers must submit the Table of tax allocation payable (if any) according to each provincial-level locality where the state budget revenue is enjoyed (including dependent units and business locations) to the tax authority managing the head office, except for the following cases where the Table of tax allocation payable is not required:

a) Value added tax on The taxpayer's transport business activities whose transport routes pass through other provinces where the taxpayer has its head office.

b) Value added tax on insurance and reinsurance business activities.

c) Value added tax on construction business activities (including construction of roads, power lines, water pipes, oil pipes, gas pipes) in other provinces where the head office is located but no dependent unit or business location is established in that province where the value of the construction work including value added tax is less than VND 1 billion.

d) Corporate income tax of dependent units and business locations with income entitled to corporate income tax incentives. Taxpayers must separately determine the amount of corporate income tax payable for the activities entitled to incentives with the tax authority managing the place where the dependent unit or business location is located and the province must not allocate it to other dependent units or business locations of the taxpayer.

d) Value added tax increase, corporate income tax of dependent units, business locations of taxpayers being micro-enterprises according to the provisions of the law on supporting small and medium-sized enterprises

e) Profit after tax remaining after setting up funds (except for profit after tax of computerized lottery activities)".

Pursuant to Clause 3, Article 19 of Circular 80/2021/TT-BTC dated September 29, 2021 of the Minister of Finance guiding the implementation of a number of articles of the Law on Tax Administration and Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government guiding tax declaration, tax calculation, allocation and payment of personal income tax:

... 3. Tax declaration and payment:

a) Personal income tax on income from salaries and wages:

a.1) Taxpayers only pay salaries and wages to employees working at dependent units and business locations in provinces other than the head office, deduct personal income tax on income from salaries and wages according to regulations and submit tax declaration dossiers according to form No. 05/KK-TNCN, appendix of the table determining the amount of personal income tax payable to localities enjoying revenue sources according to form No. 05-1/PBT-KK-TNCN issued with Appendix II of this Circular to the direct tax authority, pay personal income tax on income from salaries and wages to the state budget for each province where the employee works according to the provisions of Clause 4, Article 12 of this Circular. The personal income tax amount determined for each province is monthly or quarterly corresponding to the personal income tax declaration period and is not re-determined when finalizing personal income tax…”.

Based on the above regulations, in case the company pays salaries and wages to employees working at a business location in a province other than the head office, the company shall declare and calculate taxes according to the provisions of Clause 3, Article 42 of the Law on Tax Administration No. 38/2014/QH14, the location for submitting tax declaration documents is according to the provisions of Clause 2, Article 11 of Decree No. 126/2020/ND-CP and is guided in Clause 3, Article 19 of Circular No. 80/2021/TT-BTC.

We request Ms. Tran Thuy Linh to base on the actual situation at the unit and compare with the provisions of legal documents to comply with the regulations.