Official Letter No. 4551/CT-CS dated October 21, 2025 of the Tax Department is an important document, providing detailed instructions on how to calculate, deduct and declare taxes. personal income tax (TNCN) for salaries and wages. The correct application of this document helps businesses and accountants comply with the law and avoid the risk of administrative sanctions.
Official dispatch No. 4551/CT-CS reaffirms the scope taxable income, including bonuses in cash or in kind, emphasizing the responsibility for deduction at source and monthly/quarterly declaration according to Article 28 of Decree 65/2013/ND-CP and Article 25 of Circular 111/2013/TT-BTC. Read on to understand how to apply the document in accounting - auditing - tax practice.
Legal basis related to official dispatch 4551/CT-CS
To ensure the guidance and correct application of regulations on personal income tax (PIT), Official Letter No. 4551/CT-CS was issued based on the current legal system. These bases specifically regulate taxable income, responsibility for deduction, declaration and settlement of PIT for organizations and individuals paying income. Below is a summary of relevant legal documents:
| Name of legal document | Related content | Article, clause quotation |
| Decree 65/2013/ND-CP | Detailed regulations on taxable income, tax exemption, deduction and personal income tax declaration | Article 3, Clause 2; Article 28, Clause 2 |
| Circular 111/2013/TT-BTC | Guidance on the implementation of the Law on Personal Income Tax, specifically regulating taxable and non-taxable items | Article 2, Clause 2; Article 25, Clause 1 |
| Decree 126/2020/ND-CP | Regulations on tax declaration, tax payment, tax settlement and authorization of settlement on behalf of employees | Article 8, Clauses 1, 2, 6 |
| Tax Administration Law No. 38/2019/QH14 | Laying the foundation for tax management, declaration, deduction and handling of tax violations | Chapter IV, Section 2 |
| Personal Income Tax Law No. 04/2007/QH12 (amended, supplemented) | Identify taxpayers, taxable income, and progressive tax schedules | Article 2, Article 7, Article 22 |
Core content and important notes from Official Dispatch No. 4551/CT-CS
Official Letter No. 4551/CT-CS of the Tax Department dated October 21, 2025 provides detailed instructions on calculating and declaring personal income tax (PIT) on salaries and wages. The document clarifies the scope of taxable income, including basic salary, allowances, bonuses in cash or in kind, and emphasizes the responsibility to deduct tax at source according to the provisions of Decree 65/2013/ND-CP and Circular 111/2013/TT-BTC.
Following the instructions of the document correctly helps businesses ensure accurate tax declaration and payment, avoiding the risk of violating the law. Accounting and auditing professionals can apply this regulation to determine the correct time to calculate taxes, classify income and optimize the year-end tax settlement process, improving the transparency and reliability of financial reports.
Scope of Personal Income Tax: What is the “nature of salary and wages”?
Official Letter No. 4551/CT-CS affirms that income subject to personal income tax is very broad, including not only basic salary but also allowances, bonuses and all amounts of salary and wage nature according to Article 2, Clause 2 of Circular 111/2013/TT-BTC. Common amounts that need to be included in taxable income include:
- Basic salary and allowances for position, responsibility, and region.
- Bonuses in cash or kind such as Tet bonus, KPI, employee gifts.
- Overhead expenses, for example, telephone costs, clothing, and gifts in kind.
Accurately determining these amounts helps to deduct taxes at source in accordance with regulations, ensuring transparent declaration and settlement of personal income tax, while minimizing audit risks and administrative sanctions.
Classification of bonuses and non-cash income
Official Letter No. 4551/CT-CS clearly guides how to classify income from salaries and wages to determine whether or not it is subject to personal income tax. The table below summarizes common types of income, tax rates and legal basis, helping accountants and businesses to apply regulations correctly, avoiding errors in deductions and declarations:
| Income type | Calculate personal income tax | Legal basis |
| Basic salary, responsibility allowance | Have | Article 2, Clause 2 of Circular 111/2013/TT-BTC |
| Tet bonus, KPI bonus in cash | Have | Nature of salary and wages |
| Housing rent exceeds 15% of total taxable income | Have | Point b, Clause 2, Article 2 of Circular 111/2013/TT-BTC |
| Telephone and business trip expenses are paid in accordance with regulations. | Are not | Not included in taxable income |
Responsibility for deducting personal income tax according to Official Dispatch No. 4551/CT-CS
Pursuant to Official Dispatch No. 4551/CT-CS, organizations and individuals paying income are responsible for deducting personal income tax before paying income to employees. Specifically:
- Make monthly deductions based on taxable income.
- Apply progressive tax rates to employees with contracts of 3 months or more.
- Fully deduct all allowances, bonuses, and other amounts of a salary or wage nature.
Correct deductions not only help employees avoid paying taxes incorrectly, but also help businesses avoid the risk of violating tax laws.
Monthly/quarterly personal income tax declaration and tax settlement according to Official Dispatch No. 4551/CT-CS
Official dispatch No. 4551/CT-CS also clearly states the declaration and settlement of personal income tax as follows:
- Income paying organizations must file taxes monthly or quarterly.
- Make settlement on behalf of employees if authorized.
- If employees do not authorize, they must declare, pay and settle personal income tax themselves.
This helps ensure that all income from salaries and wages is managed transparently and fully.
Taxpayer's obligations according to Official Dispatch No. 4551/CT-CS
Taxpayers should note important obligations:
- Tax is calculated based on actual income generated, including all amounts of salary and wage nature.
- Declare and pay personal income tax on time as prescribed.
- Contact local tax authorities for specific instructions if you have any problems.
Compliance with the regulations in Official Dispatch No. 4551/CT-CS helps taxpayers avoid violations and risks of being fined.
Practical examples of applying Official Dispatch No. 4551/CT-CS
To help businesses and employees easily visualize how to properly implement the regulations, the Tax Department has clearly stated in Official Letter No. 4551/CT-CS typical cases of calculating, deducting and declaring personal income tax (PIT) on salaries and wages. Below are two practical examples illustrating how to apply the Official Letter in monthly income payments and in bonuses in kind.
Example 1: A business pays salaries and allowances to employees.
Company A has 50 employees working under labor contracts of 3 months or more. Every month, the company pays income including: basic salary, responsibility allowances, professional allowances, and performance bonuses (KPI) in cash.
According to Official Letter No. 4551/CT-CS, the first step that Company A needs to do is to determine the taxable income of each employee. Taxable income includes all salaries, allowances and cash bonuses. At the same time, the company needs to exclude tax-exempt items according to regulations, such as travel allowances and legal meal allowances.
After determining taxable income, Company A must deduct personal income tax monthly. The deduction is made based on the progressive tax schedule applied to each employee's taxable income. Deduction before salary payment helps ensure tax obligations are met on time and avoid violations of the law.
The next step according to Official Letter No. 4551/CT-CS is to declare and settle personal income tax. Company A declares tax monthly or quarterly. If the employee authorizes, the company will make the settlement on behalf of the employee to ensure complete and transparent tax procedures.
By correctly applying Official Letter No. 4551/CT-CS, Company A not only ensures compliance with the legal regulations on personal income tax, but also helps employees avoid paying taxes incorrectly or insufficiently. This not only protects the rights of employees but also enhances the company's reputation and responsibility in managing income and tax obligations.
Example 2: Receive Tet bonus in kind
Individual B receives a Tet bonus from the company in kind worth 10 million VND (e.g., gifts, company products). According to official dispatch No. 4551/CT-CS:
- Although not cash, this bonus is still taxable income because it is a bonus from salary or wages.
- The paying company is responsible for declaring and deducting personal income tax based on the value of the item, applying the correct progressive tax schedule if B has a labor contract of 3 months or more.
This example clearly illustrates that not only cash but also substantial in-kind bonuses are subject to tax, helping employees and businesses understand their tax reporting and payment obligations.
Important notes when applying Official Dispatch No. 4551/CT-CS
When implementing the provisions of Official Dispatch No. 4551/CT-CS in practice, businesses and individuals need to pay attention to some key points to ensure compliance with legal regulations, limit errors and risks when settling personal income tax. The table below summarizes important notes that accountants, human resources and taxpayers should grasp:
| Note content | Detailed instructions |
| Determine correct taxable income | Including all salaries, bonuses, and allowances of a salary nature. Not excluding welfare expenses, in-kind bonuses, etc. if not tax-exempt. |
| Distinguish tax exemptions | Only allowances such as meal allowances, telephone allowances within prescribed limits, travel allowances, and valid clothing allowances are tax-exempt. |
| Tax deduction time | Personal income tax must be deducted at the time of income payment, avoiding accumulation or late payment. |
| Declare and pay taxes on time | Depending on the scale and form of operation, businesses declare monthly or quarterly. It is necessary to ensure that the deadline for submitting declarations and paying taxes is met to avoid late payment penalties. |
| Authorization for settlement of business | Individuals can authorize the company to settle on their behalf if they only have income in one place, helping to reduce the procedures that individuals have to submit themselves. |
| Keep complete records and documents | Including labor contracts, payroll, deduction tables, tax receipts, and settlement authorization papers for inspection and examination purposes. |
| Compare data when settling | Enterprises need to check the match between deduction data and total actual income and expenditure to avoid differences when finalizing the year. |
| Update regulatory changes promptly | Personal income tax guidelines may change from year to year. Businesses need to monitor new documents to make timely adjustments. |
Conclude
Official Letter No. 4551/CT-CS plays an important role in guiding businesses and individuals to fulfill their personal income tax (PIT) obligations in accordance with regulations. Understanding and correctly applying the instructions in the Official Letter not only helps taxpayers avoid mistakes, but also ensures transparency and fairness in income management and tax deductions.
In reality, many businesses still have difficulty determining taxable income, classifying tax exemptions or handling year-end settlements. This is when support from professional accounting and tax experts becomes necessary to minimize risks and optimize the tax declaration and payment process. Synchronization between human resources, accounting and administration departments helps businesses comply with the law and operate more effectively.
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Service contact information at MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
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