Shall presumptive taxes payable by household businesses declared quarterly or annually in Vietnam?

Shall presumptive taxes payable by household businesses declared quarterly or annually in Vietnam?

Based on Clause 3, Article 8 of Decree 126/2020/ND-CP regulating types of taxes declared monthly, quarterly, annually as follows:

Types of taxes declared monthly, quarterly, annually, on each occurrence of tax liability, and tax finalization declaration

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3. Types of taxes and other revenues of the State budget declared annually include:

a) Business license fee.

b) Personal income tax for individuals acting as lottery agents, insurance agents, or multi-level selling agents who have not been deducted for tax purposes during the year because the threshold has not been met but were identified by year-end to be liable for tax.

c) Types of taxes and fees for household businesses and individual businesses filing taxes using the presumptive tax method, and individuals leasing assets opting for annual tax declaration.

d) Non-agricultural land use tax.

Taxpayers declare annual tax for each parcel and declare comprehensively for homestead land if they have land use rights for multiple parcels within a district or various districts within the same provincial area. Taxpayers are not required to declare comprehensively in the following situations:

d.1) Taxpayers have land use rights for one or more parcels in the same district, but the total taxable land area does not exceed the homestead land limit where they have land use rights.

d.2) Taxpayers have land use rights for multiple parcels in different districts, but no parcel exceeds its threshold, and the total area of taxed parcels does not exceed the homestead land limit where they have land use rights.

đ) Agricultural land use tax.

e) Land and water surface rental fees payable annually.

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According to the above regulation, it can be seen that household businesses paying tax using the presumptive method will declare taxes annually.

Shall presumptive tax payable by household businesses declared quarterly or annually in Vietnam? (Image from Internet)

How to determine the presumptive tax payable for household businesses in Vietnam?

Based on Article 51 of the Law on Tax Administration 2019, the presumptive tax payable for household businesses paying tax using the presumptive method is determined as follows:

- The tax authority determines the tax amount payable based on the presumptive tax method (hereinafter referred to as the presumptive tax payable) for household businesses, individual businesses not fully implementing accounting, invoicing, and document policies.

- The tax authority bases the estimate on the household business's self-declared documents, the tax authority's database, opinions of commune-level tax advisory councils to determine the presumptive tax payable.

- The presumptive tax payable is calculated based on the calendar year or monthly for seasonal businesses. It must be publicly disclosed within the commune, ward, or township. Any change in the type, scale of business, cessation, temporary suspension requires the taxpayer to report to the tax authority for adjustment of the presumptive tax payable.

- The Minister of Finance provides detailed regulations on the basis and procedures for determining the presumptive tax payable for household and individual businesses.

- Household or individual businesses achieving revenue and labor scale criteria at the highest level for micro-enterprises per regulations on supporting small and medium enterprises must comply with accounting policies and pay tax via the declaration method.

What are the bases for determining the presumptive tax payable in Vietnam?

In accordance with Clause 1, Article 13 of Circular 40/2021/TT-BTC on tax management for presumptive taxpayers, the basis for determining the presumptive tax payable includes:

- Tax declaration files of the presumptive taxpayer are self-declared based on estimated revenue and presumptive tax payable for the tax calculation year;

- The tax authority's database;

- Advisory opinions of commune-level tax advisory councils;

- Results of public information disclosure and reception of feedback from tax advisory councils, the People's Committee, and People's Council, the Fatherland Front of the commune, ward, township; presumptive taxpayers, and other organizations, individuals.

Public disclosure of presumptive taxpayer information is when the tax authority organizes public disclosures and acceptance of feedback about revenue and the presumptive tax payable per regulation.

The first public information disclosure aims to gather reference opinions on projected revenue and presumptive tax payable; the second disclosure aims to gather opinions on the official revenue and presumptive tax payable payable for the tax calculation year.

Public information disclosure includes: posting information on paper at locations; direct distribution to presumptive taxpayers; direct distribution to the People's Council, People's Committee, Fatherland Front of the district, ward, commune, township; public disclosure on the Tax Authority's website.

What documents are included in the presumptive tax declaration in Vietnam?

The presumptive tax declaration is stipulated in Clause 2, Article 13 of Circular 40/2021/TT-BTC as follows:

- From November 20 to December 5 annually, the tax authority issues the next year's tax declaration form to all presumptive taxpayers.

- The tax declaration file for presumptive taxpayers as stipulated in point 8.1 of Appendix I - List of tax declaration files issued with Decree 126/2020/ND-CP is the Tax Declaration Form for household and individual businesses according to Form 01/CNKD Download.

- In cases where presumptive taxpayers use invoices provided by the tax authority, sold once per occurrence, when declaring tax on revenue shown in individual invoices, presumptive taxpayers declare taxes per occurrence and use the Tax Declaration Form for household and individual businesses according to Form 01/CNKD, accompanied by tax declaration documents:

+ A copy of the economic contract for the provision of goods and services within the same industry or profession of the presumptive taxpayer's business;

+ A copy of the acceptance and liquidation minutes of the contract;

+ A copy of documents proving the origin of goods and services, such as a list of purchased domestic agricultural products for domestic agricultural goods, a list of goods exchanged by border dwellers for imported goods, invoices provided by the seller for imported goods purchased from domestic business organizations or individuals, related documents proving goods produced or supplied by individuals...

The tax authority has the right to request the original document for verification of the accuracy of the copies compared to the originals.