Article 4 of Circular 111/2013 / TT-BTC dated August 15, 2013 guiding the implementation of the law on personal income tax, the law amending and supplementing a number of articles of the law on personal income tax and Decree No. 65 / 2013 / ND-CP of the Government detailing a number of articles of the law on personal income tax and the law amending and supplementing a number of articles of the law on personal income tax stipulating the reduction of personal income tax such as after:
“According to Article 5 of the Law on Personal Income Tax and Article 5 of Decree No. 65/2013 / ND-CP, taxpayers are facing difficulties due to natural disasters, fires, accidents, dangerous diseases affecting their ability to If taxpayers are eligible for tax payment, they shall be considered for tax reduction corresponding to the extent of damage but not exceeding the payable tax amount. As follows:
1. Determine the amount of tax to be reduced
a) Tax reduction consideration is made according to the tax year. Taxpayers who encounter difficulties caused by natural disasters, fires, accidents or dangerous diseases in a tax year are entitled to reduction of payable tax amounts of that tax year.
b) The payable tax amount used as a basis for tax reduction consideration is the total of personal income tax amounts payable by taxpayers in the tax year, including:
b.1) Personal income tax paid or deducted for income from capital investment, income from capital transfer, income from real estate transfer, income from winning prizes, income from copy rights, income from franchising, income from inheritance; income from gifts.
b.2) Personal income tax payable for income from business and income from salaries and wages.
c) The basis for determining the extent of damage eligible for tax reduction is the total actual cost of recovering damage minus (-) compensation from the insurance organization (if any) or from the organization, individuals causing accidents (if any).
d) The reduced tax amount is determined as follows:
d.1) If the amount of tax payable in the tax year is greater than the damage level, the reduced tax amount is equal to the damage level.
d.2) If the tax payable in the tax year is smaller than the damage, the reduced tax is equal to the tax payable.
Procedures and dossiers for tax reduction consideration comply with documents guiding tax administration.”