Is the fixed tax for household businesses calculated annually or monthly in Vietnam?
What is the basis for determining the fixed tax rate for household businesses in Vietnam?
According to Clause 2, Article 51 of the Law on Tax Administration 2019, the tax authority will base the determination of the fixed tax rate on the declaration documents of the household businesses, the database of the tax authority, and the opinions of the commune-level Tax Advisory Council.
This regulation is detailed in Clause 1, Article 13 of Circular 40/2021/TT-BTC as follows:
- The tax declaration dossier of the lump-sum household is self-declared by the household according to the projected revenue and fixed tax rate of the tax year;
- The tax authority's database;
- Advisory opinions of the commune-level Tax Advisory Council;
- The results of publicizing information and receiving feedback from the Tax Advisory Council, People's Committee, People's Council, Vietnam Fatherland Front at the commune level, the lump-sum household, and other organizations and individuals.
Publicizing information about fixed tax payers involves the tax authority organizing the publication and receiving feedback about the revenue and fixed tax rate applicable to fixed tax payers as regulated.
The first public information according to Clause 5, Article 13 of Circular 40/2021/TT-BTC is for reference and obtaining opinions on the projected revenue and fixed tax; and the second public information according to Clause 9, Article 13 of Circular 40/2021/TT-BTC is for referencing and collecting opinions on the official revenue and fixed tax payable for the tax year.
The publicizing information includes: posting information on paper at localities; sending directly to fixed tax payers; sending directly to the People's Councils, People's Committees, Vietnam Fatherland Front at the district, commune level; publicizing information on the Tax sector's electronic information page.
Is the fixed tax for household businesses calculated annually or monthly in Vietnam? (Image from the Internet)
Is the fixed tax for household businesses calculated annually or monthly?
According to Clause 3, Article 51 of the Law on Tax Administration 2019, the fixed tax for household businesses is calculated by calendar year or by month for seasonal businesses.
And according to point a.1, Clause 4, Article 13 of Circular 40/2021/TT-BTC, it is stipulated:
Tax Administration for fixed tax payers
...
4. Determine Revenue and fixed tax Rate
a) Determine Revenue and fixed tax Rate
a.1) Revenue and fixed tax Rate are calculated annually or monthly for seasonal and stable businesses within a year.
...
Therefore, the fixed tax for household businesses will be calculated by calendar year, and if it is a seasonal and stable business within a year, it will be calculated by month.
Note: The fixed tax for household businesses must be publicized in the locality. In case of changes in industry, scale of business, suspension, or temporary business cessation, the business household must declare it to the tax authority to adjust the fixed tax rate.
How is the revenue for fixed tax determined?
According to Clause 4, Article 13 of Circular 40/2021/TT-BTC stipulating:
Tax Administration for fixed tax payers
...
4. Determine Revenue and fixed tax Rate
a) Determine Revenue and fixed tax Rate
a.1) Revenue and fixed tax Rate are calculated annually or monthly for seasonal and stable businesses within a year.
a.2) The lump-sum household self-determines the taxable revenue for the year on the tax declaration form using Form No. 01/CNKD issued with this Circular. If the lump-sum household cannot determine the lump-sum revenue, does not submit the tax declaration dossier, or the determined taxable revenue is not consistent with actual business, the tax authority shall fix the revenue and determine the fixed tax rate as stipulated in Article 51 of the Law on Tax Administration.
a.3) Based on the tax declaration dossier of the lump-sum household and the tax authority's database to solicit public opinions, consult the Tax Advisory Council's opinion, and serve as a basis for the Tax Department to direct and review the compilation of the tax register at each Tax Sub-department.
The business household self-determines the taxable revenue for the year on the Tax Declaration Form using Form No. 01/CNKD issued with Circular 40/2021/TT-BTC.
In case the business household does not determine the lump-sum revenue, does not submit the tax declaration dossier, or the determined taxable revenue is not consistent with actual business, the tax authority shall fix the revenue and determine the fixed tax rate as regulated in Article 51 of the Law on Tax Administration 2019.
Referring to Clause 1, Article 51 of the Law on Tax Administration 2019 stipulating that the tax authority determines the amount of tax to be paid by the method of imposing tax (hereinafter referred to as the fixed tax rate) in cases where the business household does not implement or fully implement accounting policies, invoices, documents, except in cases specified in Clause 5, Article 51 of the Law on Tax Administration 2019.
To be specific, Clause 5, Article 51 of the Law on Tax Administration 2019 stipulates household businesses with revenue and labor scale meeting the highest criteria for microenterprises according to the law on supporting small and medium enterprises must implement accounting policies and pay tax according to the declaration method.
