Is the TIN issued to household business also a TIN issued to individual in Vietnam?

Is the TIN issued to household business also a TIN issued to individual in Vietnam?

According to Clause 3, Article 30 of the Law on Tax Administration 2019, the issuance of TINs is regulated as follows:

Subjects for taxpayer registration and issuance of TINs

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3. The issuance of TINs is regulated as follows:

a) Enterprises, economic organizations, and other organizations are issued a unique TIN to be used throughout their operation from the time of taxpayer registration until the TIN ceases to be valid. Taxpayers with branches, representative offices, or dependent units that directly perform tax obligations are issued dependent TINs. In cases where enterprises, organizations, branches, representative offices, or dependent units carry out taxpayer registration through the inter-connected single-window mechanism along with business registration, cooperative registration, or business operation registration, the number on the business registration certificate, cooperative registration certificate, or business operation registration certificate is also the TIN;

b) Individuals are issued a unique TIN to be used throughout their lifetime. Dependents of an individual are issued a TIN to account for personal income tax deductions. The TIN issued to the dependent is also the individual’s TIN when the dependent incurs obligations with the state budget;

c) Enterprises, organizations, and individuals responsible for withholding and paying tax on behalf of others are issued a substitute TIN to declare and pay tax on behalf of the taxpayer;

d) Issued TINs may not be reused for another taxpayer;

dd) The TIN of enterprises, economic organizations, or other organizations remains unchanged after changes in type, sale, gifting, or inheritance;

e) The TIN issued to households, household businesses, and individual businesses is the TIN issued to the individual representing the household, household business, or individual business.

Thus, the TIN for a household business is the TIN issued to the individual representing the household business.

Vietnam: Is the TIN issued to household business also a TIN issued to individual?

How is tax calculated for household businesses in Vietnam?

According to Article 10 of Circular 40/2021/TT-BTC, tax calculation for household businesses is as follows:

The tax basis for household businesses and individual businesses is taxable revenue and the tax rate applied to that revenue.

- Taxable revenue

Taxable VAT and personal income revenue for household businesses and individuals include all sales, processing fees, commissions, service provision revenues incurred during the tax period from production, business activities, including bonuses, sales achievements supports, promotions, trade, and payment discounts, supports in cash or in kind; subsidies, surcharges, excess charges, and additional fees as regulated; compensation for contract breaches and other damages (only counted into personal income taxable revenue); and any other revenue earned by household businesses, irrespective of whether it has been collected.

- Tax rate applied to revenue

+ The tax rate includes the VAT and personal income tax rate, applied specifically to each field or sector as guided in Appendix I issued with Circular 40/2021/TT-BTC.

+ In cases where household businesses and individuals operate in multiple fields or sectors, they declare and calculate taxes based on the revenue tax rate applicable to each field or sector. If household businesses and individuals cannot determine the taxable revenue of each field or sector, or if the determination is inconsistent with actual business operations, the tax authority will stipulate the taxable revenue for each field or sector under the tax management law.

- Determining the payable tax amount

VAT payable = Taxable VAT revenue x VAT rate

Personal income tax payable = Taxable personal income revenue x Personal income tax rate

Where:

+ Taxable VAT and personal income revenue are guided by Clause 1, Article 10 of Circular 40/2021/TT-BTC.

+ VAT and personal income tax rates are guided in Appendix I issued with Circular 40/2021/TT-BTC.

What is the first-time taxpayer registration period for household businesses in Vietnam?

Based on Clause 2, Article 33 of the Law on Tax Administration 2019, the first-time taxpayer registration period is regulated as follows:

Time limit for first-time taxpayer registration

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2. Taxpayers registering directly with tax authorities have a registration period of 10 working days from the following date:

a) Issuance of the household business registration certificate, establishment and operation license, investment registration certificate, or establishment decision;

b) Commencement of business activities in case of organizations not subject to business registration or household businesses and individuals subject to registration but not yet issued a business registration certificate;

c) Arising responsibility for tax withholding and paying on behalf of others; organizations paying on behalf of individuals under contracts, business cooperation documents;

d) Signing a contract for undertaking work with foreign contractors or subcontractors registering for paying tax directly to tax authorities; signing contracts, petroleum agreements;

dd) Arising personal income tax obligations;

e) Arising a request for tax refund;

g) Arising other obligations with the state budget.

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The first-time taxpayer registration period for household businesses is 10 working days from the date of issuance of the household business registration certificate as regulated.