How does an online seller determine taxable revenue in Vietnam?
How does an online seller determine taxable revenue in Vietnam?
Based on Article 10 of Circular 40/2021/TT-BTC regarding the basis for calculating VAT and personal income tax for household businesses and individual businesses, the taxable revenue for online sellers is determined as follows:
- The taxable revenue for VAT and personal income tax is:
+ Revenue including tax (for cases subject to tax) from all sales, processing fees, commissions, and services provided during the tax period, including bonuses, sales support, promotions, trade discounts, payment discounts, monetary or non-monetary support.
+ Subsidies, surcharges, additional fees received as prescribed.
+ Compensation for contract violations and other compensations (only calculated into personal income taxable revenue).
+ Other revenues that the household business or individual business receives, regardless of whether the money has been collected.
How does an online seller determine taxable revenue in Vietnam? (Image from the Internet)
What are the principles for tax calculation for online sellers who are household businesses or individual businesses in Vietnam?
Based on Article 4 of Circular 40/2021/TT-BTC, the principles for tax calculation for online sellers who are household businesses or individual businesses are as follows:
- The principles for tax calculation for household businesses and individual businesses are implemented according to the current legal provisions on VAT, personal income tax, and other relevant legal normative documents.
- household businesses and individual businesses with revenue from production and business activities in the calendar year of 100 million VND or less are not required to pay VAT and personal income tax according to the legal provisions on VAT and personal income tax. household businesses and individual businesses are responsible for accurately, honestly, and fully declaring and submitting tax documents on time, and are accountable before the law for the accuracy, honesty, and completeness of tax documents.
- household businesses and individual businesses organized in the form of a group of individuals or family households have a revenue threshold of 100 million VND/year or less to determine that an individual is not required to pay VAT or personal income tax, which is determined for one (01) sole representative of the group of individuals or family households in the tax year.
When do online sellers who are household businesses or individual businesses pay taxes through the declaration method in Vietnam?
Based on Article 3 of Circular 40/2021/TT-BTC, regarding the interpretation of terms for household businesses, individual businesses paying taxes through the declaration method, as follows:
Interpretation of Terms
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- “Large-scale household businesses, individual businesses” are those with revenue and labor scales meeting the highest criteria of micro-enterprises or above. Specifically: household businesses, individual businesses in agriculture, forestry, fisheries, industry, and construction with an average annual number of social insurance participants of 10 or more or a total revenue from the preceding year of 3 billion VND or more; household businesses or individual businesses in commerce and service sectors with an average annual number of social insurance participants of 10 or more or total revenue from the preceding year of 10 billion VND or more.
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- “household businesses, individual businesses paying tax through the declaration method” are large-scale household businesses; household businesses, individual businesses that have not met the large-scale criteria but choose to pay tax through the declaration method.
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Thus, online sellers who are household businesses or individual businesses pay taxes through the declaration method in the following cases:
- Large-scale household businesses are those with revenue and labor scales meeting the highest criteria of micro-enterprises or above. Specifically:
+ household businesses, individual businesses in agriculture, forestry, fisheries, industry, and construction with an average annual number of social insurance participants of 10 or more or a total revenue from the preceding year of 3 billion VND or more.
+ household businesses, individual businesses in commerce and service sectors with an average annual number of social insurance participants of 10 or more or total revenue from the preceding year of 10 billion VND or more.
- household businesses, individual businesses that have not met the large-scale criteria but choose to pay tax through the declaration method.
Where is the tax payment location for online sellers who are household businesses or individual businesses in Vietnam?
Based on Clause 1, Article 56 of the Tax Administration Law 2019, the tax payment location for online sellers who are household businesses or individual businesses is as follows:
- At the State Treasury;
- At the tax authority receiving the tax declaration documents;
- Through organizations authorized by the tax authority to collect taxes;
- Through commercial banks, other credit institutions, and service organizations as prescribed by law.
