Circular No. 10/2009/TT-BTC dated January 21, 2009 of the Ministry of Finance guiding personal income tax registration, withholding tax, and tax declaration and finalization applicable to individuals
1. Scope of application
1.1. Taxpayers: individuals who act as insurance agents and have income liable to personal income tax.
1.2. Personal income tax-liable income from agency activities includes agency commissions bonuses in different forms, supports and other amounts received from principal establishments
2. Tax registration
2.1. Individuals acting as insurance agents shall make tax registration under the Tax Administration Law and guiding documents.
2.2. A tax registration dossier comprises:
- A tax registration declaration, made according to form No. 03 DK-TCT, attached to the Finance Ministry’s Circular No. 85/2007/TT-BTC dated July 18, 2007, guiding the implementation of the Tax administration Law regarding tax registration.
- A copy of the taxpayer’s identity card or passport;
- The business registration certificate of certificate of insurance agency training, granted by the insurance company.
2.3. Place of submission of tax registration dossiers:
- An insurance agent who makes tax registration by himself/herself shall submit the tax registration dossier to the Tax Department of the district where he/she resides.
- If agent submit tax registration dossiers to the insurance company, the insurance company shall submit tax registration dossiers to its managing tax office. The tax office directly managing the insurance company shall receive registration dossiers, examine dossiers and grant tax identification numbers to each agent, and then transfer tax identification numbers to the insurance company for allocation to its agents.
3. Tax withholding and issuance of tax withholding invoices
3.1. Tax withholding and declaration:
- Insurance business establishments (below referred to as principal establishments) shall withhold personal income tax for income earned from agency activities which are paid to their agents at rates corresponding to agents’ incomes according to the following partially progressive tariff:
Unit of calculation: VND 1,000
- Income of an agent under this tariff is his/her income from which family circumstance-based reductions for dependants, compulsory insurance premiums and charity and humanitarian donations are not allowed to be deducted.
- In case the principal establishment pays income from agency activities to its agents on a quarterly basis, the quarterly income should be converted into monthly income in order to calculate the amount of personal income tax temporarily withheld under the above tariff. If income is paid on a yearly basis, yearly income must be converted for withholding.
- On the basis of the personal income tax amount already withheld, the principal establishment shall make monthly tax declaration according to form No. 01/KK-BH attached to this Circular (not translated herein) and submit the declaration to its managing tax office. If the monthly withheld tax amount is less than VND 5 million, declaration shall be made on a quarterly basis.
3.2. Issuance of tax withholding invoices
Upon withholding tax under the above guidance, the principal establishment shall issue a tax withholding invoice to agents, if so requested, for use as a ground for tax finalization or refund.
4. Tax finalization declaration
4.1. Tax finalization declaration for the principal establishment shall be made according to form No. 02/KK-BH attached to this Circular (not translated herein).
4.2. Tax finalization declaration for individuals acting as agents:
An individual who acts as an agent and has income liable to personal income tax shall make tax finalization declaration in the following cases:
- He/she has in a year a payable income tax amount higher then the tax amount already withheld or temporarily paid or earns income in the year but the income thereon tax has not yet been withheld or temporarily paid.
- He/she makes a request for tax refund or clearing of the paid tax amount against the subsequent tax period’s payable tax amount.
Tax finalization declaration dossiers, time limit and place for submission of tax finalization declaration dossiers comply with Clause 2.4, Point 2, Section II, Part B of the Finance Ministry’s Circular No. 84/2008/TT-BTC dated September 30, 2008, applicable to business individuals.
Personal income tax finalization declarations of individuals acting as agents must be enclosed with dossiers evidencing their dependants (if making declarations for reductions for dependants).
- If an agent also earns income from salaries or wages or income from other business activities other than agency activities, he/she shall add income from agency activities to income from salaries and wages and income from other business activities for tax finalization.
- Tax finalization declaration is not required in other cases.
5. Organization of implementation
5.1. This Circular takes effect 45 days from the date of its signing and applies to insurance agents’ incomes from January 1, 2009.
5.2. Guiding regulations on personal income tax of high-income earners and enterprise income tax applicable to individuals acting as insurance agents are annulled.
5.3. Other contents not guided in this Circular comply with the Finance Ministry’s Circular No. 84/2008/TT-BTC dated September 30, 2008, guiding the implementation of a number of articles of the Personal Income Tax Law and the Government’s Decree No. 100/2008/ND-CP dated September 8, 2008, detailing the implementation of a number of articles of the Personal Income Tax Law.
Any arising problems should be reported to the Ministry of Finance (the General Department of Taxation) for study and settlement.
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