What are the criteria for quarterly tax declaration for value-added tax and personal income tax in Vietnam?

What are the criteria for quarterly tax declaration for value-added tax and personal income tax in Vietnam? 

According to Article 9 of Decree 126/2020/ND-CP, specific criteria for quarterly tax declaration are stipulated as follows:

- Quarterly value-added tax declaration applies to:

+ Taxpayers required to declare value-added tax monthly, as stipulated in point a clause 1 Article 8 of Decree 126/2020/ND-CP, if their total turnover from the sale of goods and provision of services in the preceding year is 50 billion VND or less, they can declare value-added tax quarterly. The turnover from the sale of goods and services is determined as the total turnover on value-added tax declarations of the tax periods within the calendar year.

+ In cases where the taxpayer centrally declares tax at the headquarters for the dependent unit or business location, the turnover from the sale of goods and provision of services includes the turnover of the dependent unit or business location.

+ Taxpayers who have just started operations or business activities can choose to declare value-added tax quarterly. After conducting business for 12 full months, from the subsequent calendar year, they will base on the turnover of the immediately preceding calendar year (full 12 months) to determine whether to declare value-added tax on a monthly or quarterly basis.

- Quarterly personal income tax declaration is as follows:

+ Taxpayers required to declare personal income tax monthly, as specified in point a clause 1 Article 8 of Decree 126/2020/ND-CP, if eligible to declare value-added tax quarterly, may choose to declare personal income tax quarterly.

+ Quarterly tax declaration is determined once from the first quarter in which the tax declaration obligation arises and is applied consistently throughout the entire calendar year.

- Taxpayers are responsible for self-determining their eligibility for quarterly tax declaration to comply with declaration regulations.

+ Taxpayers who meet the criteria for quarterly tax declaration can choose to declare taxes monthly or quarterly consistently throughout the calendar year.

+ If a taxpayer currently declares taxes monthly and becomes eligible for quarterly declaration, intending to switch to quarterly, they must submit a written request as prescribed in Appendix I attached to this Decree to the directly managing tax authority no later than January 31 of the year they start declaring taxes quarterly. If they fail to do so by this deadline, they must continue to declare taxes monthly for the entire calendar year.

+ If a taxpayer self-discovers they are not eligible for quarterly tax declaration, they must declare taxes monthly from the first month of the subsequent quarter. The taxpayer is not required to resubmit monthly tax declaration documents for previous quarters but must submit a Declaration of Additional Tax Payable for the monthly amount exceeding the quarterly-declared amount as prescribed in Appendix I attached to this Decree and calculate late payment interest as per regulations.

+ If the tax authority discovers that a taxpayer is not eligible for quarterly tax declaration, the authority must reassess the additional monthly tax payable exceeding the amount the taxpayer declared and calculate late payment interest as per regulations. The taxpayer must begin monthly tax declarations upon receiving the tax authority's notification.

What are the criteria for quarterly tax declaration for value-added tax and personal income tax in Vietnam?  (Image from the Internet)

What are procedures for changing the tax calculation period for value-added tax and personal income tax from monthly to quarterly in Vietnam?

According to the guidance from the Ministry of Finance in sub-section 2, section 1 of the administrative procedures issued with Decision 1462/2022/QD-BTC, taxpayers wishing to change their tax calculation period must follow these steps:

Step 1: Taxpayers declaring taxes monthly and eligible for quarterly declaration, as per Article 9 of Decree 126/2020/ND-CP, must prepare dossiers and submit a written request to change the value-added tax (VAT) and personal income tax (PIT) calculation period from monthly to quarterly to the directly managing tax authority no later than January 31 of the first year of quarterly tax declaration.

If the dossier is submitted electronically, the taxpayer (NNT) will access the electronic information portal of their choice (including the electronic portal of the General Department of Taxation or other competent state agencies). They will electronically declare the tax dossier and related appendices (if any), sign electronically, and send it to the tax authority through the chosen portal.

Step 2: Tax authority receives the dossier:

- If the dossier is submitted directly at the tax authority or mailed, the tax authority will receive the dossier in accordance with current regulations.

- For dossiers submitted via electronic transactions, the receipt, review, and resolution will be carried out through the tax authority's data processing system:

+ Upon receiving the dossier, the electronic portal of the General Department of Taxation will notify the NNT confirming dossier submission or provide a reason for not receiving it within 15 minutes of receiving the electronic dossier.

+ Regarding dossier review and resolution, the tax authority will review and process according to the provisions of the Law on Tax Administration and related guidelines. The tax authority will send a notice of acceptance or rejection of the dossier to the portal that the NNT used to prepare and send the dossier within one working day from the date on the receipt notification.

Where is the place to submit VAT tax declaration dossiers in Vietnam?

According to Article 45 of the Tax Administration Law 2019, specific provisions about where to submit tax declaration dossiers are as follows:

- Taxpayers submit tax declaration dossiers to the directly managing tax authority.

- For tax declaration dossiers submitted through the one-stop service mechanism, the place to submit the tax declaration dossier follows the provisions of that mechanism.

- The place to submit tax declaration dossiers for exported and imported goods follows the Customs Law provisions.

- The Government of Vietnam stipulates the place to submit tax declaration dossiers for the following cases:

+ Taxpayers with multiple production and business activities;

+ Taxpayers conducting production and business in multiple areas; taxpayers with tax obligations arising from taxes declared and paid on an occurrence basis;

+ Taxpayers with tax obligations arising from land use fees; exploitation rights of water resources and mineral resources;

+ Taxpayers with tax obligations to finalize personal income tax;

+ Taxpayers who declare tax through electronic transactions and other necessary cases.