Dependents with new tax identification numbers are eligible for deductions.

From July 1, a tax code becomes a prerequisite for an individual to be considered a dependent and receive family deductions.

At the conference to collect opinions on the draft circular guiding the Law on Personal Income Tax (PIT) and the Law on Tax Administration held by the General Department of Taxation on June 14 in Ho Chi Minh City, many businesses expressed concerns about applying this regulation in practice. Meanwhile, the tax authority said that this is a good "initiative" to avoid the situation where many individuals register the same dependent.

How to register for tax code without ID card?

At the conference, Ms. Ta Thi Phuong Lan - Deputy Director of the Personal Income Tax Department, General Department of Taxation - said that the new point in the draft circular guiding the revised Personal Income Tax Law, expected to be applied from July 1, is that in cases of dependent registration after July 1, dependents must have a tax code (MST) to be eligible for family deductions.

Submit personal income tax settlement documents at Ho Chi Minh City Tax Department

Regarding this issue, the representative of the Ho Chi Minh City Union of Trading Cooperatives (Saigon Co.op) said that currently, the issuance of tax codes is based on identity cards (ID cards). If the above regulations are applied, how can an employee who gives birth and has a newborn child without an ID card obtain a tax code to receive family deductions? In this case, will the tax authority issue a tax code based on the birth certificate?

Samsung Company representative asked: There are many dependents who are now 80-90 years old and no longer have ID cards, so can they apply for tax codes based on their household registration books? Many businesses believe that the draft circular guiding the new Personal Income Tax Law is currently in the consultation stage, so it will be issued at least by July 1. Therefore, if the regulation requires dependents to have tax codes from July 1, it will be difficult to implement. There should be time for taxpayers to prepare, especially for businesses with a large number of employees.

According to businesses, the draft circular does not clearly state whether the tax code registration is done by the business or the employee for dependents who arose before July 1. Businesses request the General Department of Taxation to provide clear instructions so that businesses can notify their employees. A representative of PouYuen VN Company said that the business has up to 80,000 employees. If the tax authority later requires all 80,000 employees to re-register tax codes for their dependents, it will be very time-consuming.

Use birth certificate to register tax code

Ms. Ta Thi Phuong Lan said that the change by the tax authority ensures the principle of not causing disruption to taxpayers. Therefore, this new regulation only applies to dependents arising from July 1. Dependents who do not have a tax code and have been registered for deduction before July 1 will continue to receive family deductions until they are granted a tax code. In the case of dependents arising from July 1, the dependent only needs to provide additional information, from which the tax authority will automatically grant a tax code. The tax authority does not require individuals to complete a profile or make a tax code themselves before completing the procedure to register dependents.

Mr. Cao Anh Tuan, Deputy Director General of the General Department of Taxation, said the purpose of this new regulation is to avoid the situation of double registration of dependents as has happened recently. Regarding the issue of granting tax codes to dependents, the General Department of Taxation has submitted a separate dossier to the Ministry of Finance, but in the general spirit, it will try to create favorable conditions for taxpayers. Accordingly, from July 1, in cases of registering new dependents but not having a tax code, the tax authority will still allow deductions, but there will be instructions for taxpayers to comply with regulations and will not be too rigid. Also according to the General Department of Taxation, taxpayers only have to register and submit documents proving one dependent once during the period of calculating family deductions.

Regarding taxpayers' concerns about the regulation that if they change their workplace, they must re-register and submit documents proving dependents as in the case of first-time registration, Mr. Cao Anh Tuan said that the General Department of Taxation noted this opinion and will study improvements. In the case of new children born after July 1, Ms. Phuong Lan said that the tax authority will soon have instructions so that taxpayers can use the birth certificate to register a tax code for their children. Later, when the child is old enough to have an ID card, the tax authority will update this information into the system.

There are incentives but they are difficult to get.

At the conference, many businesses commented on the circular guiding the Law on Tax Administration. The representative of Company 577 said that the new Law on Tax Administration allows businesses in difficulty to gradually pay tax debts for no more than 12 months, from the date of the start of the period for compulsory enforcement of tax administrative decisions. Businesses are very happy with this provision, but if you read it carefully, you will see that it is difficult for businesses to enjoy incentives because the tax authority requires businesses to have a bank guarantee. "Businesses that borrow capital for business must submit a loan plan, mortgaged assets... to be approved by the bank. Here, businesses that owe taxes and ask for a bank guarantee are very difficult" - said the representative of this company. This person also said that businesses have to reluctantly pay tax debts because the penalty for late payment is up to 0.05%/day, equivalent to 18%/year, while the current market interest rate is only 12-13%/year and is included in the cost. The late payment penalty interest is not included in the cost of the business, so the after-tax penalty interest is up to more than 22-23%/year.

This is also the concern of many businesses at the conference. Responding to this issue, Mr. Cao Anh Tuan said that currently the tax arrears are very large, up to thousands of billions of VND each year. One of the reasons leading to this situation is that the penalties are not strict, so recently when amending the law, the penalty for false declaration was increased from 10% to 20%, the penalty for late payment from 0.05%/day to 0.07%/day and only applied after 90 days. Mr. Tuan also said that the bank interest rate that businesses mentioned has only been applied for a few months, while at the time of amending the law, the bank interest rate was at 20-25%. Mr. Tuan suggested that businesses fulfill their tax obligations well to avoid being fined for late payment at high levels./.

According to (vov.vn) - LT