The allocation of personal income tax is guided by the Hanoi Tax Department in Official Dispatch No. 10179/HAN-QLDN4 issued on August 11, 2025. This regulation applies in cases where the parent company pays salaries and wages to employees working at dependent units or business locations in provinces other than the head office.
This is an issue that many businesses are concerned about as their operations are expanding and their staff is dispersed across many locations. This article will analyze in detail the official dispatch, legal basis, personal income tax allocation method and important notes to help businesses comply with regulations.
See more articles at: Overview of personal income tax
Legal basis for personal income tax allocation
Official dispatch No. 10179/HAN-QLDN4 issued based on the current legal system, including:
- Tax Administration Law 2019: prescribes tax management principles, tax declaration and payment obligations of taxpayers.
- Decree 126/2020/ND-CP October 19, 2020: detailed guidance on a number of articles of the Law on Tax Administration.
- Circular 80/2021/TT-BTC September 29, 2021: Instructions for implementing the Law on Tax Administration and Decree 126.
In particular, Articles 12 and 19 of Circular 80/2021/TT-BTC are important legal bases for applying the allocation of personal income tax obligations to centrally-accounting enterprises but having dependent units and business locations in other provinces.
Article 12 Circular 80/2021/TT-BTC – Allocation of tax obligations
Article 12 of Circular 80/2021/TT-BTC stipulates that enterprises with headquarters in one province but conducting business activities in another province must make centralized tax declarations at the directly managing tax authority. At the same time, the amount of tax payable must be allocated to each province where the business activities are conducted.
Article 19 Circular 80/2021/TT-BTC – Tax declaration, tax calculation, and personal income tax allocation
Article 19 of Circular 80/2021/TT-BTC clearly stipulates the method of allocating personal income tax:
- Personal income tax must be determined separately for each locality based on the actual tax deducted.
- If the employee is transferred, rotated or seconded, the tax amount is allocated according to the workplace at the time of income payment.
- Business declaration according to the form 05/KK-TNCN with appendix 05-1/PBT-KK-TNCN.
Main content of personal income tax allocation guidance
In the document, the Hanoi Tax Department has systematized the regulations into two key groups. The first is to clearly identify cases where enterprises, especially parent companies, are required to allocate personal income tax. The second is the allocation method and implementation principles, ensuring transparent and correct tax declaration and payment. These are two important contents that enterprises need to grasp to apply correctly in practice.
When must the parent company allocate personal income tax?
According to the guidance of the Hanoi Tax Department, the parent company must allocate personal income tax in the following cases:
- Centralized salary payment at headquarters: Employees work at branches or business locations in other provinces but salaries and wages are paid centrally at the parent company.
- Having dependent units in many provinces: Enterprises with centralized accounting, but have many dependent units/business locations in different provincial areas.
- Personnel rotation: Employees are seconded or transferred from the head office to work in another province, and personal income tax is allocated to the place where the actual income arises.
The allocation ensures that the local budget where the business activity occurs receives the corresponding tax portion, avoiding the concentration of tax resources in a single locality.
Personal income tax allocation method
Official dispatch No. 10179/HAN-QLDN4 together with Circular 80/2021/TT-BTC provides specific personal income tax allocation methods as follows:
Determine the amount of personal income tax to be allocated
Enterprises must separately determine the amount of tax deducted for each individual working in each location.
For example:
- Employee A works at the Hai Phong branch and is paid by the parent company in Hanoi. A's deducted personal income tax must be allocated to the Hai Phong City budget.
- Employee B works at the Hanoi headquarters, withholding personal income tax paid to the Hanoi budget.
In case of transfer or assignment, personal income tax allocation
If the employee is transferred or seconded to another province, at the time of income payment, personal income tax is allocated according to the actual place of work.
Personal income tax allocation declaration file
In order for the allocation of personal income tax to be carried out in accordance with regulations, enterprises not only need to accurately determine the amount of tax payable for each locality but also need to prepare complete declaration documents according to the instructions of the tax authority. This document is an important legal basis, helping to demonstrate the transparency in the allocation of personal income tax and at the same time facilitating the process of checking and comparing later. Specifically, enterprises need to do the following:
- Declare personal income tax according to form 05/KK-TNCN.
- Prepare Appendix 05-1/PBT-KK-TNCN to determine the amount of tax payable for each locality.
- Submit application to tax authority directly managing head office.
Pay personal income tax
In the process of allocating personal income tax, enterprises must pay taxes according to each locality where tax obligations arise. This means that if the parent company is headquartered in Hanoi but has branches or business locations in other provinces, the personal income tax of employees at that branch must be allocated personal income tax and paid directly to the corresponding local budget. This is a mandatory requirement to ensure fairness in state budget management.
Upon receipt of the tax payment certificate, the State Treasury will base on the content of the certificate and proceed to account for the payment amount according to the location where the personal income tax has been allocated. If the enterprise incorrectly identifies the payment location or provides missing information, the tax will be misallocated and the enterprise will be forced to carry out adjustment procedures. This is both time-consuming and may result in late payment penalties, so determining the correct location where personal income tax needs to be allocated from the beginning is a key factor to ensure compliance.
Tax declaration, tax payment
Along with the obligation to pay money, enterprises need to prepare personal income tax declaration dossiers according to the prescribed form, paying special attention to the detailed appendix on personal income tax allocation. In the appendix, enterprises must clearly show the total taxable income, number of employees, and deductible tax amount at each branch or business location so that the tax authority has a basis for inspection. This is an important step in implementing personal income tax allocation in accordance with the instructions in Circular 80/2021/TT-BTC.
In addition, the payment voucher must accurately fill in the identification code, tax authority and tax collection area corresponding to the personal income tax allocation. If there is an error in the declaration or the wrong area is paid, the enterprise may have its documents returned or be subject to additional collection. Therefore, enterprises should develop a strict internal process from salary calculation, deduction, declaration to payment, and update new regulations to ensure that personal income tax allocation is carried out fully, transparently and promptly.
Applying technology to support tax declaration
To support businesses in declaring and paying allocated taxes, the General Department of Taxation has:
- Upgrade the HTKK application from June 30, 2025, allowing the allocation of personal income tax according to 2-level management areas.
- Apply the payment identification code (ID) according to Official Dispatch 1483/TCT-KK dated April 24, 2023. Thanks to that, businesses can pay taxes easily, ensuring correct accounting for each province.
Applying technology helps reduce errors, increase transparency and shorten the time to fulfill tax obligations.
Illustrative example for personal income tax allocation
The regulations on personal income tax allocation are sometimes general, making it difficult for businesses to visualize how to apply them in practice. To clarify, below are some specific situations illustrated according to the tax authority's guidance. These examples help businesses clearly see the difference between paying taxes centrally at the head office and allocating taxes to each locality where employees work.
In case of transport business
Suppose ABC Transport Company has its headquarters in Hanoi but has additional branches in Da Nang and Ho Chi Minh City. The total number of employees in the company is 120, of which 40 work at the Da Nang branch, 50 at the Ho Chi Minh City branch and 30 at the Hanoi headquarters. The company pays salaries centrally in Hanoi with an average income of 20 million VND per month for an employee, withholding personal income tax estimated at 10%, or 2 million VND/person/month.
According to regulations, although salaries are paid from Hanoi, personal income tax must be distributed according to the actual place of work of employees. Thus, the Da Nang branch with 40 employees must pay VND80 million in personal income tax to the local budget each month; the Ho Chi Minh City branch with 50 employees must pay VND100 million to the city budget; and the 30 employees in Hanoi continue to pay VND60 million at the head office. In total, the company pays VND240 million in personal income tax each month, but it is divided among three different localities instead of being collected entirely in Hanoi.
| Work location | Number of employees | Estimated personal income tax (million VND/month) | Tax receiving budget |
| Hanoi (headquarters) | 30 | 60 | Hanoi |
| Da Nang (branch) | 40 | 80 | Danang |
| Ho Chi Minh City (branch) | 50 | 100 | Ho Chi Minh City |
| Total | 120 | 240 | — |
In case of seconded staff
XYZ Company Limited is headquartered in Hanoi, where all salaries are paid. In January 2025, the company transferred 5 technical staff to the Hai Phong branch to support the project for 6 months. Each employee has an average income of 30 million VND/month. Personal income tax is deducted at the rate of 10%, equivalent to 3 million VND/person/month.
During the secondment period, although the company still pays salaries in Hanoi, because the employees work directly in Hai Phong, the personal income tax arising from this group of employees must be allocated to the Hai Phong budget. Thus, the amount of personal income tax to be allocated is: 5 employees × 3 million VND × 6 months = 90 million VND.
| Information | Data |
| Number of seconded staff | 5 |
| Time of secondment | 6 months |
| Average income | 30 million VND/person/month |
| Personal income tax deduction (10%) | 3 million VND/person/month |
| Total personal income tax to be allocated to Hai Phong | 90 million dong |
If your business needs assistance in personal income tax declaration, personal income tax allocation for multiple branches, or want to ensure compliance with legal regulations, please refer to Professional Tax Accounting Services – MAN for full consultation and support.
Important notes for businesses when allocating personal income tax
Although the regulations on personal income tax allocation have been clearly guided, many businesses are still prone to making mistakes during implementation if they do not follow them closely. To ensure proper tax declaration and payment, and to limit the risk of being fined or having to pay back taxes, businesses need to pay special attention to the following points:
- Allocate income to the right place: avoid errors leading to late payment or collection.
- Comply with required forms: use correct forms 05/KK-TNCN and 05-1/PBT-KK-TNCN.
- Regularly monitor new documents: Hanoi Tax Department and General Department of Taxation regularly update regulations, businesses need to grasp them promptly.
- Applying technology: declaring taxes via HTKK, paying taxes using identification codes to optimize the process.
Recommendations for businesses
In order for the allocation of personal income tax to not only comply with regulations but also become an effective management process, businesses need to proactively implement systematic solutions. This is not only a way to minimize legal risks but also helps optimize accounting resources, ensuring transparency and credibility in operations. Some specific recommendations include:
- Review payroll model: Clearly identify which employees work at business locations other than the province for tax allocation.
- Accounting and human resources training: Ensure understanding and correct application of regulations.
- Build internal processes: From salary calculation, tax deduction to declaration and payment of allocated taxes.
- Professional consulting: For large-scale businesses with many branches, you should consult tax consulting services to avoid mistakes.
Businesses can refer to more Professional Auditing Services – MAN to ensure transparency of financial data and strict compliance with regulations on personal income tax allocation as well as other tax obligations.
Conclude
Official Letter No. 10179/HAN-QLDN4 of the Hanoi Tax Department has clarified the obligation to allocate personal income tax (PIT) when the parent company pays salaries to employees at branches or business locations in other provinces. Enterprises need to comply with Circular 80/2021/TT-BTC, declare according to Form 05/KK-TNCN and 05-1/PBT-KK-TNCN, and pay taxes in the correct location where the employee works.
Accurate allocation of personal income tax helps businesses limit legal risks, avoid collection and ensure fair budget allocation among localities. Businesses should also apply technology such as HTKK and payment identification codes to optimize the tax declaration and payment process.
For businesses with multiple locations, compliance can be complicated. MAN – Master Accountant Network Providing personal income tax consulting services and professional tax allocation support, helping businesses comply with the law, reduce errors and save costs.
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