Employees can now refund their overpaid taxes using the new feature available in the Tax Administration's salary and wage list system. This allows employers to register the information of eligible wage earners separately for each individual and track the refund request systematically.
Details of Refund Request Registration
The option to register a refund request for overpaid taxes related to employee welfare and incentive payments is available under the title "Refund Request List" on the salary tax portal at salary.tax.gov.ir. Employers can submit their requests for the years 2021 to 2024.
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According to Note (4) of Circular No. 200/1403/50, if the employment relationship between the employee and employer continues, there is no need for the wage earner to appear in person to receive the overpaid tax, and the process will be carried out based on the employer's request. This change can help reduce problems and facilitate the process for employees.
Limitations and Conditions for Refund
In calculating the amounts eligible for refund, the ceiling set for welfare and incentive payments is 11.7% of total payments. Items such as end-of-service bonuses, severance pay, and travel expenses are excluded from this calculation. This means that this figure is not the definitive tax refund rate but rather the ceiling amount eligible for welfare and incentive payments.
The method of calculation and execution of the refund depends on the tax assessment status of the requested year. In cases where the income tax for the relevant year has been assessed and a determination notice has been issued, the employer must register the tracking code of the systematic assessment report that was the basis for issuing the determination notice so that the refund can be processed by the relevant tax administration.
Conversely, if the year in question has not yet been assessed, the refundable amounts will be calculated based on the information provided by the employer in the submitted lists. This allows employers to easily register the relevant requests if needed.
To use this feature, the employer must log into the salary tax system, select "New Salary List" from the "Salary List" menu, and register the information of wage earners from whom excess tax has been deducted for welfare and incentive payments in the relevant year.
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