PricewaterhouseCoopers News Brief - Guidance on 2009 PIT Finalisation
CIRCULAR 02
As anticipated in our News Brief dated 20 August 2009, the Ministry of Finance has now released a new PIT Circular 02, dated 11 January which makes a number of changes to the PIT regime and administrative procedures. Key points include:
- Circular 02 allows withholding organisations (i.e. employers) to undertake PIT finalisation on behalf of its employees. For those readers that attended our PIT update presentations in late 2009 will recall that PwC had concerns with respect to the absence of an employer PIT finalisation/reconciliation. This has now been resolved and employers will be able to prepare and submit (by 31 March) a single PIT finalisation return that declares all the income paid to its employees and calculate the associated annual taxes thereon.
Any underpayments of tax must be remitted to the tax authority by the employer. The Circular is silent on how to deal with overpayments, but we anticipate that employers will calculate the tax due for all employs, irrespective of whether there is an under or over payment.
If an individual has income from other sources (e.g. from other employers, from business income, etc), they still have a responsibility to prepare and submit a separate PIT final return that incorporates all income and attend to any under/over payment of tax.
- The Circular confirms the deductibility of contributions to mandatory insurance schemes in respect of expatriates. In addition, the requirements with respect to supporting documents for mandatory insurance contributions have been simplified.
- Amendments have been made in relation to the PIT treatment of various types of personal investment income.
********
OFFICIAL LETTER 90
The General Department of Taxation issued Official Letter (OL) 90 guiding the submission of 2009 PIT final returns. The OL directs provincial tax authorities to ask taxpayers to delay submitting PIT final returns in January pending further guidance. There is a suggestion that new forms may be released soon.
In addition, OL 90 reiterates that where there is no change to the 2009 initial dependant registration, no annual re-registration in required for year 2010 onwards.
CIRCULAR 02
As anticipated in our News Brief dated 20 August 2009, the Ministry of Finance has now released a new PIT Circular 02, dated 11 January which makes a number of changes to the PIT regime and administrative procedures. Key points include:
- Circular 02 allows withholding organisations (i.e. employers) to undertake PIT finalisation on behalf of its employees. For those readers that attended our PIT update presentations in late 2009 will recall that PwC had concerns with respect to the absence of an employer PIT finalisation/reconciliation. This has now been resolved and employers will be able to prepare and submit (by 31 March) a single PIT finalisation return that declares all the income paid to its employees and calculate the associated annual taxes thereon.
Any underpayments of tax must be remitted to the tax authority by the employer. The Circular is silent on how to deal with overpayments, but we anticipate that employers will calculate the tax due for all employs, irrespective of whether there is an under or over payment.
If an individual has income from other sources (e.g. from other employers, from business income, etc), they still have a responsibility to prepare and submit a separate PIT final return that incorporates all income and attend to any under/over payment of tax.
- The Circular confirms the deductibility of contributions to mandatory insurance schemes in respect of expatriates. In addition, the requirements with respect to supporting documents for mandatory insurance contributions have been simplified.
- Amendments have been made in relation to the PIT treatment of various types of personal investment income.
********
OFFICIAL LETTER 90
The General Department of Taxation issued Official Letter (OL) 90 guiding the submission of 2009 PIT final returns. The OL directs provincial tax authorities to ask taxpayers to delay submitting PIT final returns in January pending further guidance. There is a suggestion that new forms may be released soon.
In addition, OL 90 reiterates that where there is no change to the 2009 initial dependant registration, no annual re-registration in required for year 2010 onwards.