Authorizing personal income tax settlement is an important tax administrative procedure that helps employees optimize time and ensure accuracy. According to data from the General Department of Taxation, every year more than 801 individuals complete their tax settlements through the paying organization to reduce the burden of direct procedures.
The implementation of the commission right to settle personal income tax is a right as stipulated in Tax Administration Law No. 38/2019/QH14 and Decree 126/2020/ND-CP. Specifically, individuals who have signed contracts for 3 months or more and are employed at the time of settlement will be eligible for authorization.
Understanding this process helps businesses avoid errors regarding personal deductions or insurance contributions. Let MAN – Master Accountant Network analyze the legal aspects in detail so you can perform the most professional tax return.
Legal basis governing the authorization of personal income tax finalization
To properly authorize personal income tax settlement, we need to base our actions on the current legal framework. This serves as a guiding principle for all tax consulting and auditing activities in Vietnam.
The legal system regarding personal income tax is constantly being improved to create favorable conditions for citizens. Understanding the following regulations is mandatory for accountants and professional tax settlement service providers.
Law on Tax Administration and guiding decrees
Law No. 38/2019/QH14 on Tax Administration establishes the principle that individuals can self-declare their personal income tax or authorize the paying organization to do so. Decree 126/2020/ND-CP subsequently detailed specific cases, deadlines for submitting documents, and related responsibilities.
Circular 80/2021/TT-BTC and Circular 111/2013/TT-BTC
Circular 80/2021/TT-BTC provides guidance on the implementation of the law, including the issuance of form 08/UQ-QTT-TNCN specifically for authorizing personal income tax finalization. Circular 111/2013/TT-BTC remains an important basis for determining taxable and tax-exempt income.
Conditions for individuals to be authorized to settle personal income tax on behalf of businesses.
Based on guidance from the tax authorities, individuals can authorize the income-paying organization to perform tax settlement on their behalf in the following cases:
Case 1: Stable employment at one company
Individuals who have an employment contract of 3 months or more with an organization and are actually working there at the time the organization performs tax settlement.
Note: This regulation applies even if an individual has worked for less than 12 months in a calendar year.
Case 2: Transfer within the same system or due to company changes.
Employees who are transferred from their old unit to a new unit are still eligible to delegate authority to the new unit if:
- The existing business undergoes merger, consolidation, splitting, or conversion of its legal form.
- The old and new units are within the same system (corporation, holding company).
Case 3: Having additional occasional income at a low level.
Individuals who have signed an employment contract for more than 3 months at one place, and also have occasional income from other sources but meet the following conditions:
- The average monthly current income during the year should not exceed 10 million VND.
- The paying entity has deducted the tax at source at the prescribed rate. 10%.
- Individuals do not need to file a tax return for this portion of their occasional income.
Case 4: Foreign national terminates contract.
Foreign individuals who have completed their employment contracts in Vietnam but have not yet finalized their tax returns with the tax authorities may authorize the paying organization or a third party to do so on their behalf. The authorized party will be responsible for any resulting tax obligations.
Cases where personal income tax settlement is not authorized
Besides those eligible for tax settlement assistance, the law also clearly defines the barriers that prevent individuals from authorizing others to do so. If an employee falls under any of the following criteria, they are required to personally carry out the tax settlement procedure with the tax authorities to receive a tax refund or make additional payments.
Below is a summary table of cases where authorization is not eligible:
| Criteria | Details of cases where authorization is not permitted. |
| Type of contract | Workers who sign employment contracts for less than 3 months or work through the following forms: probationary period, piecework, service contract, collaborator, apprenticeship/training. |
| Change of workplace | Individuals who sign employment contracts of 3 months or more with 2 or more employers in the same tax year. |
| Working conditions | They have left their job or are no longer present at the business at the time the entity is filing its tax return. |
| Current income | – Average monthly incidental income exceeds 10 million VND (total over 120 million VND/year).
– Irretrievable income not subject to tax withholding (due to payments under 2 million VND/time or a commitment to low income). |
| Tax registration | Individuals who have not been issued a tax identification number (TIN) at the time of tax finalization. |
Sample power of attorney for personal income tax settlement and how to fill it out correctly.
Form 08/UQ-QTT-TNCN attached to Circular 80/2021/TT-BTC is currently the only legally accepted document. Incorrect information provided on the personal income tax finalization authorization form may result in the application being rejected or a tax refund being delayed.
Individuals should ensure they accurately record their tax identification number, full name, and correctly mark the boxes confirming their income status. Even a small error in the data can complicate the personal income tax finalization authorization process more than necessary.
Instructions for filling in the identification information section.
In the "Full Name" section, taxpayers must write their full name in capital letters with accents. The tax identification number must be a 10-digit active number. For "Residential Address," please write your permanent or temporary address so that the tax authorities can easily contact you when authorizing the tax authorities to finalize your personal income tax return.
How to verify sources of income
Taxpayers need to confirm that their income is solely from their current employer or from temporary income that has already been subject to withholding tax (10%). This commitment serves as the basis for businesses to legally authorize the settlement of personal income tax. Individuals who make false declarations will be held responsible.
Download the personal income tax settlement authorization form here.
Responsibilities of businesses when receiving authorization for personal income tax finalization.
Upon receiving the authorization for personal income tax settlement, the paying organization will act on behalf of the employee to fulfill all declaration and submission obligations. The business will be responsible for the accuracy of the data before the management agency.
Businesses must review payroll records and registered personal deductions. The process of authorizing personal income tax settlement requires close coordination between human resources and accounting to ensure maximum benefits for employees.
Compilation of income data for the year
Accountants need to total all taxable income generated from January to December. For cases where personal income tax finalization is authorized, businesses use the HTKK software to export data files and send them to the General Department of Taxation's portal.
Calculate the tax deduction and progressive tax rate.
The application of the progressive tax rate requires absolute accuracy. Businesses that authorize personal income tax settlement must calculate the personal deduction and dependent deduction based on the valid documents previously provided by the employee.
Deadline for submitting personal income tax returns for 2026 (tax settlement period 2025)
The deadline for filing tax returns is a particularly important factor in the personal income tax settlement process. If a business submits its personal income tax settlement authorization documents late, the penalty can amount to tens of millions of VND according to Decree 125/2020/ND-CP on administrative penalties in the field of tax and invoices.
Typically, the deadline for tax settlement for income-paying organizations is the last day of the third month after the end of the calendar year. If this day falls on a statutory holiday, the deadline for authorizing personal income tax settlement will be moved to the next working day.
Schedule for submitting documents to the paying organization
For the 2025 tax settlement period, which will be carried out in 2026, businesses need to complete the collection of tax settlement authorization forms from employees before March 2026. Early preparation allows the accounting department sufficient time to verify income data, cross-check withholding certificates, and complete the necessary documentation in accordance with regulations.
Consequences of late filing
The tax authorities are now closely monitoring the time of electronic filing of tax returns on the system. Cases of late submission of authorized personal income tax finalization returns may not only be subject to administrative penalties but also other potential consequences. Late payment penalty of 0.03%/day will be incurred. Regarding outstanding tax amounts, many businesses choose professional tax settlement services to ensure timely payment and minimize legal risks.
Procedure for filing personal income tax returns using the HTKK software.
Information technology has simplified the process of authorizing personal income tax settlements. Currently, most units use the HTKK software or the thuedientu.gdt.gov.vn portal to submit official reports to the management agency.
Users need to download the latest version of HTKK to have all the forms according to Circular 80. The steps for declaring data from the personal income tax finalization authorization form into the software must be carefully checked and cross-checked to avoid technical errors.
Enter the data into Appendix 05-1/BK-QTT-TNCN
This is an appendix for individuals with contracts of 3 months or more. The accountant will select the box "Individual authorizes tax settlement on their behalf" for employees who have submitted a personal income tax settlement authorization form. The system will automatically calculate based on the tax rate formula.
Generate and submit tax returns online.
After completing the data, the accountant exports the XML file. This file contains the complete list of employees authorized to file personal income tax returns and their corresponding tax amounts. Digitally signing with a token is the final step before submitting the official documents.
The self-assessment tax process often involves many complicated procedures, from preparing deduction documents to filing online tax returns with errors leading to delays in tax refunds. Don't let procedural worries bother you! Let our team of experts help you optimize your tax refund, process your documents quickly and accurately. Contact us today! in order to be free consultation and use Comprehensive personal income tax settlement service!
Special notes regarding personal deductions when authorizing someone else to act on your behalf.
Personal deductions significantly reduce the amount of tax payable. When authorizing the tax settlement, individuals must ensure that the dependent's file has been approved and that each dependent has a complete tax identification number.
If an employee has not registered for a tax deduction during the year but actually has a dependent obligation, they can still register it when authorizing the settlement of personal income tax. This requires the accountant to quickly update the information on the system.
Principles for calculating dependent deductions
Each dependent can only be claimed as a tax deduction once by one taxpayer. When an individual authorizes a tax settlement, the business will base the calculation of the most accurate deduction amount on the actual period of support provided during the year.
Documents proving dependent status
Even after authorizing the settlement of personal income tax, individuals are still responsible for retaining supporting documents such as birth certificates and household registration records. The authorized business only keeps copies for explanatory purposes in case of tax inspections or audits.
How to calculate personal income tax for individuals who authorize someone else to act on their behalf.
The tax calculation formula is based on taxable income and progressive tax rates. For individuals who authorize personal income tax finalization, the year-end tax amount is the difference between the total annual tax payable and the amount already provisionally deducted monthly through payroll.
If the amount of tax paid exceeds the amount due, the employee will receive a tax refund or offset it against the next tax period. The authorized personal income tax settlement process helps individuals receive their refund quickly without having to go through complicated procedures themselves.
Formula for determining taxable income
|
Taxable income = Taxable revenue – Deductions |
The business will perform all these calculation steps on behalf of the individual as soon as it receives a valid authorization document for personal income tax settlement from the employee.
Current progressive tax rate table
Below is a detailed data table comparing the old tax schedule and the 2026 progressive personal income tax schedule to help businesses and individuals easily track their financial plans.
| Tax rates | Taxable income/month (Before 2026) | Taxable income/month (from 2026 onwards) | Tax rate |
| 1 | Up to 5 million VND | Up to 10 million VND | 5% |
| 2 | Over 5 to 10 million VND | Between 10 and 30 million VND | 10% |
| 3 | Between 10 and 18 million VND | Between 30 and 60 million VND | 15% |
| 4 | Between 18 and 32 million VND | Over 60 to 100 million VND | 25% |
| 5 | Between 32 million and 100 million VND | Over 100 million VND | 35% |
| 6 | Between 52 and 80 million VND | – (Included in level 5) | – |
| 7 | Over 80 million VND | – (Included in level 5) | – |
Applying this table to personal income tax finalization authorization documents helps employees understand their tax obligations transparently. It also serves as a basis for verifying the accuracy of the tax paid.
Handling tax overpayments/underpayments after final settlement.
After a company completes the personal income tax finalization authorization procedure, the result is usually either overpayment or underpayment. The company is responsible for informing the employee of this result and taking the necessary financial processing steps as prescribed by law.
In case of underpayment, the company will deduct the difference from the employee's salary to pay into the state budget. Conversely, if the personal income tax settlement authorization documents show an overpayment, the company will directly refund the employee or offset it against the next period.
Procedures for refunding personal income tax through businesses.
Individuals who overpay their taxes and have authorized the tax authorities to process their personal income tax returns will have their refund processed by the paying entity. This solution helps employees avoid the hassle of having to go directly to the tax office to verify complex tax refund documents.
Tax offsetting between individuals within the same organization.
The tax authorities allow offsetting of excess and deficit amounts for individuals who have authorized the settlement of personal income tax. The final total tax payable by the business is the figure after balancing the entire list of employees for the period.
The importance of professional tax consulting services.
Managing the personal income tax settlement authorization files for a large number of employees places immense pressure on the accounting department. Errors in tax laws not only cause financial losses but also damage the company's reputation with its employees.
Professional tax auditing and accounting services have become essential. MAN – Master Accountant Network not only helps businesses legally authorize personal income tax settlements but also optimizes tax costs in a legitimate way.
Minimizing legal risks for businesses.
Using our service ensures that all tax returns for authorized personal income tax settlement are accurate. We always keep up-to-date with the latest regulations to protect businesses from periodic tax audits by regulatory authorities.
Enhancing the employee experience
When the personal income tax settlement authorization process runs smoothly, employees feel secure and confident in the company's management capabilities. Transparency helps create a professional, cohesive work environment and attracts talent.
Conclude
Authorization for personal income tax settlement is a crucial link in financial management and legal compliance in Vietnam. Following this process correctly provides convenience for employees and demonstrates the professionalism of the business. Understanding the conditions and forms according to Circular 80 is mandatory to avoid legal risks.
If your company is having difficulty compiling the necessary documents for personal income tax finalization authorization or needs a reputable auditing firm, please contact MAN. We are committed to providing you with the best service. tax consulting services, tax settlement and tax reporting High quality. Let MAN be your partner, ensuring the highest accuracy and optimal results for your organization.
Service contact information at MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
Frequently Asked Questions about Authorization for Personal Income Tax Settlement
No. If you have employment contracts of more than 3 months at two different places, you must file your own tax return with the tax authority where you registered for personal deductions instead of authorizing someone else to file your personal income tax return on your behalf.
Employees must be currently employed at the company at the time of tax settlement to authorize the settlement of personal income tax. If you have left your job, you must settle your tax yourself or ask your new employer to do it for you.
If the deadline is missed, you cannot authorize the tax settlement of your personal income tax. In that case, the company will only settle the income they paid, and you will have to settle your personal tax return yourself to be entitled to a tax refund. Can I work at two places at the same time with authorization?
What happens if I quit before the company finalizes the accounts?
What should I do if I forget to submit the power of attorney?
