Is it necessary to specify the TIN on invoices for household businesses in Vietnam?

Is it necessary to specify the TIN on invoices for household businesses in Vietnam?

According to Clause 5, Article 10 of Decree 123/2020/ND-CP, the regulation on invoice content is as follows:

Content of the invoice

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5. Name, address, and TIN of the buyer

a) In the case where the buyer is a business establishment with a TIN, the buyer's name, address, and TIN on the invoice must match the business registration certificate, branch operation registration certificate, household business registration certificate, taxpayer registration certificate, TIN notification, investment registration certificate, or cooperative registration certificate.

If the name or address of the buyer is too long, the seller is allowed to abbreviate some common nouns on the invoice, such as “Phường” (ward), Q instead of “Quận” (district), TP instead of “Thành Phố” (city), TNHH instead of “Trách nhiệm Hữu hạn" (limited liability), KCN instead of “khu công nghiệp” (industrial park), SX instead of “sản xuất” (manufacturing/ production), CN instead of “Chi nhánh” (branch), etc.) but must ensure complete house number, street name, ward, commune, district, city, and accurately identify the name and address of the enterprise and comply with the business registration, taxpayer registration of the enterprise.

b) If the buyer does not have a TIN, the invoice is not required to show the buyer's TIN. In certain cases of selling goods and providing special services to individual consumers as stipulated in Clause 14 of this Article, the invoice is not required to show the name or address of the buyer. If selling goods and services to foreign customers coming to Vietnam, the buyer's address information can be replaced by passport or immigration document number and nationality of the foreign customer.

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Hence, if the buyer is a household business, the invoice must specify the buyer's name, address, and TIN as indicated on the household business registration certificate.

For buyers without a TIN, the TIN is not required to be shown on the invoice.

Is it necessary to specify the TIN on invoices for household businesses in Vietnam?

What is the structure of a TIN of household business in Vietnam?

According to Article 5 of Circular 105/2020/TT-BTC and Clause 1, Article 5b of Circular 01/2021/TT-BKHDT, supplemented by Article 1 of Circular 02/2023/TT-BKHDT, the TIN of household business as stated on the household business Registration Certificate is simultaneously the TIN of the household business.

The structure of the TIN of household business is as follows:

TIN structure: N1N2N3N4N5N6N7N8N9N10 - N11N12N13

Where:

- The first two numbers N1N2 represent the regional allocation number of the TIN.

- The seven numbers N3N4N5N6N7N8N9 are structured to increase sequentially from 0000001 to 9999999.

- The tenth number N10 is the check digit.

- The three numbers N11N12N13 represent sequential numbers from 001 to 999.

- The hyphen (-) is used to separate the group of the first 10 digits from the last 3 digits.

Accordingly, the TIN can be either 10 or 13 digits. Specifically:

- A 10-digit TIN is used for businesses, organizations with legal status; representatives of households, household businesses, and other individuals.

- A 13-digit TIN with a hyphen (-) separating the first 10 digits and the last 3 digits is used for dependent units and other subjects.

What are tax payment methods for household businesses in Vietnam?

Based on the regulations in Circular 40/2021/TT-BTC, household businesses may choose one of the following tax payment methods:

First, the declaration method

Regulated under Clause 3, Article 3 of Circular 40/2021/TT-BTC: The declaration method is the method of declaring tax and calculating tax based on actual revenue arising for the monthly or quarterly period.

Pursuant to Clause 1, Article 5 of Circular 40/2021/TT-BTC, the declaration method for household businesses is regulated as follows:

(i) The declaration method is applied to the following subjects:

- household businesses, individuals with large-scale business.

- household businesses, individuals who do not meet the large-scale criteria but choose to pay tax via the declaration method.

(ii) household businesses that pay tax by the declaration method shall declare tax monthly except for new household businesses and households eligible for quarterly tax declaration and choosing to declare tax quarterly as per Article 9 of Decree 126/2020/ND-CP.

(iii) If the household business paying tax by the declaration method determines that the taxable revenue does not match the actual situation, the tax authority shall impose the taxable revenue in accordance with Article 50 of the Tax Administration Law 2019.

(iv) household businesses paying tax by the declaration method must implement accounting and billing policies. If the household operates within industries where revenue can be verified by confirmations from competent authorities, it is exempted from accounting policies.

(v) household businesses, individuals paying tax by the declaration method are not required to finalize taxes.

Second, the fixed method (khoan)

According to Clause 7, Article 3 of Circular 40/2021/TT-BTC and Clause 1, Article 7 of Circular 40/2021/TT-BTC (amended, supplemented by Clause 1, Article 1 of Circular 100/2021/TT-BTC), regulations for the fixed method on household businesses are as follows:

(i) The fixed method is the method of calculating tax based on fixed revenue rates determined by tax authorities to calculate the fixed tax amount according to Article 51 of the Tax Administration Law 2019.

(ii) The fixed method is applied to household businesses, individuals that are not subject to tax declaration and not subject to tax payment per occurrence.

(iii) household businesses paying tax by the fixed method (Fixed) do not need to apply accounting policies. Fixed tax households using retail invoices must maintain and present invoices, contracts, legal service dossiers, and proofs of valid goods and services when requesting issuance and retail of invoices for each occurrence.

In cases where fixed tax households do business in border markets, border gate markets, markets in economic zones on Vietnam's territory, they must store invoices, contracts, documents proving the legality of goods, and present them upon request from competent state management agencies.

(iv) Fixed households that have been notified by tax authorities of the fixed tax amount payable from the beginning of the year must pay taxes as notified. If a fixed household notified at the beginning of the year ceases or temporarily suspends business within the year, the tax authority shall adjust the payable tax amount according to instructions at point b.4, point b.5, Clause 4, Article 13 of Circular 40/2021/TT-BTC.

For fixed households that start business during the year (less than 12 months in a calendar year), they are subject to VAT and PIT if they have annual business revenue exceeding 100 million VND; or not subject to VAT and PIT if the annual business revenue is 100 million VND or below.

(v) Fixed households declare taxes annually as stipulated in point c, Clause 2, Article 44 of Tax Administration Law 2019, and pay taxes within the timeframe specified by the tax authority's Notice of Payment as per Clause 2, Article 55 of Tax Administration Law 2019.

If a fixed household uses invoices issued by tax authorities and sells them retail by number, they must separately declare and pay taxes on the revenue arising from those invoices per occurrence.