Question: Dear Lawyer, in the case of changing the legal representative to a foreign employee as mentioned above, how should our company report, handle, and pay the arising taxes? We kindly request legal advice from you for our company.
-
Regarding the obligation to settle personal income tax (PIT) for the previous legal representative
Based on the provisions of point d.3, clause 6, Article 8 of Decree No. 126/2020/ND-CP of the Government detailing certain provisions of the Law on Tax Administration, a foreign individual who terminates a working contract in Vietnam must finalize their tax declaration with the tax authorities before leaving the country. If the individual has not completed the tax settlement procedures with the tax authorities, they can authorize the income-paying organization or other organizations or individuals to finalize their tax according to the regulations on tax settlement for individuals. In this case, the income-paying organization or the organization/individual that receives the authorization must be responsible for any additional PIT payable or refunds for overpaid taxes.
Thus, the previous legal representative can either authorize the company to finalize PIT or personally complete the tax settlement with the tax authorities. The company should note that if the previous legal representative has not completed the tax settlement procedures before leaving the country, the company is responsible for finalizing PIT on behalf of the previous legal representative. Accordingly, the company is obligated to file the annual tax return for PIT settlement in accordance with clause 6, Article 8 of Decree No. 126/2020/ND-CP mentioned above.
-
Regarding the tax registration procedures for the new legal representative
According to the provisions of clause 3, Article 33 of the 2019 Law on Tax Administration regarding the tax registration responsibilities of the enterprise for its employees:
The company is obligated to register for tax on behalf of the individual earning income (the new legal representative) no later than 10 working days from the date the tax obligation arises if the individual does not yet have a tax code;
The company must also register for tax on behalf of the dependents of the taxpayer (the new legal representative) no later than 10 working days from the date the taxpayer registers for family circumstance deductions as stipulated by law, in cases where the dependents do not yet have a tax code.
|
