Personal income tax refunds will be automatic from 2025

The information was announced by the leader of the General Department of Taxation (Ministry of Finance) at an event on November 21. Accordingly, this agency is building the "suggested personal income tax finalization declaration" function on eTax Mobile applications (apps), to support individuals in electronic tax declaration.

That is, this application will support taxpayers to create tax declarations based on data from businesses - the place that pays income to taxpayers, instead of having to compile declaration information themselves as is currently the case.

The tax industry will then upgrade the application to automatically support the settlement and refund of personal income tax for taxpayers. This is expected to be implemented early next year, before the 2024 personal income tax settlement period.

Director General of the General Department of Taxation Mai Xuan Thanh said that automatic personal income tax refunds will help simplify manual steps and file processing, when the number of individual taxpayers who have to settle and refund taxes every year is very large.

Personal income tax refund is when people are refunded the excess amount paid during the year, or have taxable income that has not reached the threshold for payment. According to the Personal Income Tax Law, individuals without dependents and with an income of less than 132 million VND per year can apply for a refund of the excess amount paid. For each dependent (parents, wife, children, siblings), the deductible income is an additional 52.8 million VND per year.

People with two or more sources of income must directly complete the tax settlement and refund procedures. At that time, they compile their own deduction documents to submit with their application. However, the procedures and tax refund documents are quite complicated, causing many people to decide to give up the excess amount or pay for support services to get a refund.

In addition to tax refunds, according to the General Department of Taxation, authorities also built an electronic portal for individuals doing e-commerce business to register, declare, and pay taxes.

Tax authorities use artificial intelligence (AI) to control revenue and sales on e-commerce platforms. This tool will analyze electronic invoice information, identify risks of fake invoices or trading of documents when considering value-added tax (VAT) refunds. AI applications are also used in analyzing big data collected from e-commerce business activities, to identify acts of non-declaration and tax evasion.