How to calculate VAT and personal income tax for household businesses, individual businesses paying fixed tax in Vietnam in 2024?

How to calculate VAT and personal income tax for household businesses, individual businesses paying fixed tax in Vietnam in 2024?

Based on Article 10 of Circular 40/2021/TT-BTC which stipulates the basis for tax calculation, the method of calculating VAT and personal income tax for household businesses and individual businesses paying fixed tax is determined as follows:

Where:

- Revenue for VAT and personal income tax calculation is:

+ Revenue includes tax (in the case subject to tax) of the entire amount received from sales, processing fees, commission, and service provision arising during the tax calculation period from production, business activities of goods and services, including bonuses, incentives for achieving sales targets, promotions, trade discounts, payment discounts, monetary or non-monetary support.

+ Subsidies, additional charges, surcharges, and extra fees received according to regulations.

+ Compensation for contractual violations, other compensations (only counted for personal income tax revenue).

+ Other revenue received by household businesses paying fixed tax, regardless of whether money has been received or not.

- The VAT rate and personal income tax rate are determined based on Appendix 1 List of sectors for calculating VAT, personal income tax on revenue for household businesses and individual businesses issued with Circular 40/2021/TT-BTC.

How to calculate VAT and personal income tax for household businesses, individual businesses paying fixed tax in Vietnam in 2024? (Image from the Internet)

What are regulations on the determination of revenue for calculation for household businesses paying fixed tax in Vietnam?

According to point a, clause 4, Article 13 of Circular 40/2021/TT-BTC, the determination of revenue for fixed tax calculation for household businesses paying fixed tax is as follows:

- The revenue for fixed tax calculation for household businesses paying fixed tax is calculated on a calendar year or month for seasonal business cases and stable business in one year.

- The fixed tax household self-determines the revenue for fixed tax calculation in the year on the tax declaration form number 01/CNKD issued with Circular 40/2021/TT-BTC. In cases where the fixed tax household cannot determine the fixed revenue, does not file a tax declaration dossier, or the determined fixed tax revenue is not appropriate with the actual business, the tax authority will determine the revenue and set the fixed tax rate according to the provisions of Article 51 of the Law on Tax Administration 2019.

Download Form 01/CNKD Tax Declaration Form for household businesses, individual businesses.

- Based on the tax declaration dossier of the fixed tax household and the tax authority's database to obtain public opinions, consult the Tax Advisory Council, and serve as a basis for the Tax Department's direction and review of the establishment of the tax roll at each Tax Sub-department.

Where is the fixed tax submitted?

According to clause 1, Article 56 of the Law on Tax Administration 2019, the place to submit fixed taxes is regulated as follows:

- At the State Treasury;

- At the tax managing authority where tax declaration dossiers are received;

- Through organizations authorized by the tax managing authority to collect taxes;

- Through commercial banks, other credit institutions, and service organizations as prescribed by law.

What documents are required for a fixed tax declaration for household businesses paying fixed tax in Vietnam?

According to clause 2, Article 13 of Circular 40/2021/TT-BTC, the documents required for a fixed tax declaration for household businesses paying fixed tax are as follows:

(1) For household businesses paying fixed tax leasing assets: The tax declaration form for household businesses and individual businesses according to form number 01/CNKD issued with Circular 40/2021/TT-BTC.

Download Form 01/CNKD Tax Declaration Form for household businesses, individual businesses.

(2) For household businesses paying fixed tax using invoices issued by the tax authority, selling retail per each occurrence, when declaring tax for revenue on individual invoices, the fixed tax household declares tax per each occurrence and uses the tax declaration form for household businesses and individual businesses according to form number 01/CNKD issued with Circular 40/2021/TT-BTC, simultaneously presenting and submitting the following documents with the tax declaration dossier:

- A copy of the economic contract for the supply of goods or services in the same industry as the fixed tax household's business activities;

- A copy of the acceptance and liquidation of the contract;

- A copy of documents proving the origin of goods or services such as: purchase list of local agricultural products if the goods are local agricultural products; list of goods purchased, exchanged by border residents if the goods are imported by border residents; invoices provided by the seller if the goods are imported and purchased from domestic business individuals or organizations; related documentation to prove if the goods are produced or provided by the individual themselves; etc.

In addition, the tax authority has the right to request the presentation of original documents for comparison and confirmation of the accuracy of copies compared to the originals.