Is it required to declare taxes for operating a mobile food stall in Vietnam?

Is it required to declare taxes for operating a mobile food stall in Vietnam?

The opening of a mobile food stall will implement the tax calculation method for individual business taxpayers on each occurrence as stipulated in Article 6 of Circular 40/2021/TT-BTC as follows:

1. The method of tax declaration per occurrence applies to individual businesses that do not operate regularly and do not have a fixed business location. Irregular business operations are determined based on the characteristics of the production and business activities of each field, profession, and are self-identified by the individual to choose the tax declaration method as guided in this Circular. A fixed business location is the place where the individual conducts production and business activities such as: transaction locations, stores, workshops, warehouses, docks, or other similar locations.

2. Individual businesses that declare taxes per occurrence include:

a) Mobile individual businesses;

b) Individuals who are private construction contractors;

c) Individuals transferring the Vietnamese national domain name “.vn”;

d) Individuals earning income from digital content products and services, unless they choose to pay taxes by the declaration method.

3. Individual businesses that declare taxes per occurrence are not required to implement accounting policies but must preserve invoices, vouchers, contracts, and documents proving the legality of goods and services and present them along with the tax declaration dossier for each occurrence.

4. Individual businesses that declare taxes per occurrence must declare taxes when taxable revenue arises.

Per the above regulations, the opening of a mobile food stall will be taxed per occurrence.

Therefore, individual businesses declaring taxes per occurrence must declare taxes when taxable revenue arises.

Thus, opening a mobile food stall still requires full tax declarations.

Is it required to declare taxes for operating a mobile food stall in Vietnam?​ (Image from the Internet)

How to declare personal income tax for a mobile food stall in Vietnam?

Based on Article 8 of Decree 126/2020/ND-CP on the types of taxes declared monthly, quarterly, annually, per occurrence of tax obligations, and tax finalization:

The declaration of personal income tax for individuals opening mobile food stalls can be done monthly, quarterly, annually, or per occurrence. To be specific:

(1) Declare Personal Income Tax (PIT) monthly.

(2) Declare PIT quarterly if meeting the criteria for quarterly tax declaration as stipulated in Article 9 of Decree 126/2020/ND-CP or in the following cases:

- Organizations or individuals paying income subject to tax withholding as per PIT law, where the income-paying organization or individual falls under quarterly VAT declaration and chooses to declare PIT quarterly.

- Individuals with income from salaries and wages directly declaring to the tax authorities and choosing to declare PIT quarterly.

(3) Declare PIT annually

For individuals acting as lottery agents, insurance agents, or multi-level sales who have not withheld taxes during the year because it did not reach the payment threshold but determine to be liable for taxes by the year's end.

(4) Declare PIT per occurrence

For individuals directly declaring tax or organizations, individuals declaring and paying taxes on behalf of the following income types:

- Income from real estate transfers.

- Income from capital transfers.

- Income from capital investments.

- Income from royalties, franchising, prizes from abroad.

- Income from inheritances, gifts.

Thus, in juxtaposition with the regulations, opening a mobile food stall for PIT declaration can follow any of the aforementioned methods depending on whether the stall meets the standards of these tax declaration methods.

Do mobile food stalls in Vietnam have to pay value-added tax (VAT)?

Household businesses and individual businesses with an annual calendar year revenue from production and business activities of 100 million VND or less are not subject to VAT and PIT according to the legal provisions on VAT and PIT.

Household businesses and individual businesses are responsible for accurately, honestly, and fully declaring taxes and submitting tax dossiers on time; they are legally responsible for the accuracy, honesty, and completeness of the tax dossier as stipulated. (Article 4 of Circular 40/2021/TT-BTC).

If a mobile food stall’s annual calendar year revenue is 100 million VND or less, it is not subject to VAT and PIT according to the legal provisions on VAT and PIT.

Conversely, if the annual calendar year revenue is 100 million VND or more, full payment of VAT and PIT is required.

For example, if income in the calendar year exceeds 100 million VND, VAT and PIT must be paid as follows:

According to Appendix 1 List of business sectors with VAT and PIT calculated at percentage rates on revenue for household businesses and individual businesses issued with Circular 40/2021/TT-BTC as follows:

For food service businesses (including mobile food stalls), a 3% VAT and a 1.5% PIT apply.

Thus, the total tax rate that household businesses and individual businesses in mobile food stall services liable to could be 4.5%.

The tax amount to be paid will be calculated based on the above tax rate multiplied by taxable revenue.