May a household business currently paying fixed tax switch to paying tax under periodic declarations in Vietnam?
May a household business currently paying fixed tax switch to paying tax under periodic declarations in Vietnam?
Based on the provisions specified in Clause 3, Article 13 of Circular 40/2021/TT-BTC as follows:
Tax Management for fixed taxpayers
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3. Tax Declaration Filing Deadline
The deadline for tax declaration filing for fixed taxpayers is specified in Point c, Clause 2, Clause 3, Article 44 of the Law on Tax Administration. Specifically:
a) The deadline for filing tax declarations for fixed taxpayers is no later than December 15 of the year preceding the tax year.
b) For new business activities of fixed taxpayers (including households using paying tax under periodic declarations switching to the presumptive method), or fixed tax payers switching to paying tax under periodic declarations, or fixed tax payers changing business sectors, or changing the scale of business during the year, the deadline for filing tax declarations is no later than the 10th day from the date of commencing business, changing the tax calculation method, changing business sectors, or changing business scale.
c) The deadline for filing tax declarations in cases where the fixed tax household uses invoices provided or retail invoices sold by the tax authorities for each arising transaction is no later than the 10th day from the date of revenue generation requiring invoice use.
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household businesses currently paying taxes under the presumptive method (fixed tax payers) can switch to paying tax under periodic declarations.
May a household business currently paying fixed tax switch to paying tax under periodic declarations in Vietnam? (Image from the Internet)
What should a household business do when switching from paying fixed tax to paying tax under periodic declarations in Vietnam?
According to the provisions specified in Point b, Clause 4, Article 13 of Circular 40/2021/TT-BTC as follows:
Tax Management for fixed taxpayers
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4. Determination of Revenue and fixed tax Rate
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b) Adjustment of Revenue and fixed tax Rate
fixed taxpayers that propose an adjustment of revenue and fixed tax rate due to changes in business activities will have their fixed tax rate adjusted by the tax authority as regulated in Clause 3, Article 51 of the Law on Tax Administration from the date of change. Specifically:
b.1) For fixed tax payers changing the scale of business (business area, labor use, revenue), they must declare adjustments and supplements to the Tax Declaration Form No. 01/CNKD issued with this Circular. The tax authority, based on the tax declaration of the presumptive household and the tax authority's database, if determining the revenue deviation from the contracted revenue by 50% or more, will issue a Notice (Form No. 01/TB-CNKD issued with Decree No. 126/2020/ND-CP dated October 19, 2020, by the Government of Vietnam) on adjusting the fixed tax rate from the time of change in the tax year. If the tax authority's database, verification, inspection, or audit provides grounds that the presumptive household does not meet the conditions for the adjustment of the fixed tax rate under regulations, the tax authority will issue a Notice not to adjust the fixed tax rate according to Form No. 01/TBKDC-CNKD issued with this Circular.
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b.6) fixed tax payers switching to paying tax under periodic declarations must declare adjustments and supplements to the fixed tax Declaration according to Form No. 01/CNKD issued with this Circular. The tax authority will rely on the adjusted and supplemented declaration to reduce the predetermined tax rate for the transition period.
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fixed tax payers switching to paying tax under periodic declarations must declare adjustments and supplements to the fixed tax Declaration according to Form No. 01/CNKD issued with Circular 40/2021/TT-BTC.
The tax authority will rely on the adjusted and supplemented declaration to reduce the predetermined tax rate for the transition period.
What are the bases for determining fixed tax for fixed tax payers in Vietnam?
According to the regulations in Clause 7, Article 3 of Circular 40/2021/TT-BTC, the presumptive method is a method of tax declaration and tax calculation based on an actual revenue ratio arising monthly or quarterly.
The bases for determining fixed tax for fixed tax payers are specified in Clause 1, Article 13 of Circular 40/2021/TT-BTC, including:
- The tax declaration dossier of the fixed tax household, self-declared based on projected revenue and fixed tax rate for the tax year;
- The database of the tax authority;
- Consultative opinions from the commune-level tax advisory council, ward, and commune-level town;
- The results of public disclosure and receipt of feedback from the tax advisory council, People's Committee, People's Council, Fatherland Front of commune, ward, and commune-level town, the presumptive household, and other organizations and individuals.
The public disclosure of information for fixed tax payers is the tax authority's organization of announcing and receiving feedback on the revenue and fixed tax rate for fixed tax payers as regulated.
The first public disclosure of information follows Clause 5, Article 13 of Circular 40/2021/TT-BTC for reference and feedback on predicted revenue and fixed tax rate. The second public disclosure of information follows Clause 9, Article 13 of Circular 40/2021/TT-BTC for reference and feedback on the official revenue and fixed tax rate to be paid for the tax year.
Public information disclosure includes posting paper information at the location; sending directly to the presumptive household; sending directly to the People's Council, People's Committee, Fatherland Front of district, ward, commune, and commune-level town; publicly disclosing information on the Tax sector's electronic information portal.
