What are the criteria for quarterly VAT tax declaration in Vietnam?

What are the criteria for quarterly VAT tax declaration in Vietnam?

The criteria for quarterly tax declaration for value-added tax (VAT) and personal income tax are stipulated in Clause 1, Article 9 of Decree 126/2020/ND-CP as follows:

Quarterly VAT tax declaration applies to:

- Taxpayers who are subject to monthly VAT declaration as stipulated at Point a, Clause 1, Article 8 of Decree 126/2020/ND-CP and have a total annual revenue from the sale of goods and provision of services in the preceding year of 50 billion VND or less can declare VAT quarterly.

+ Revenue from the sale of goods and provision of services is determined as the total revenue on VAT returns for tax periods in the calendar year.
+ In cases where taxpayers centralize tax declaration at the headquarters for dependent units or business locations, the sale of goods and provision of services includes the revenue of the dependent units or business locations.

- In cases where new taxpayers are starting their business activities, they can choose to declare VAT quarterly. After 12 months of operation, from the following calendar year, based on the revenue level of the preceding full calendar year (12 months), they will declare VAT monthly or quarterly accordingly.

What are the criteria for quarterly VAT tax declaration in Vietnam? (Image from Internet)

Which types of taxes and contributions are declared quarterly in Vietnam?

According to Clause 2, Article 8 of Decree 126/2020/ND-CP, the types of taxes and contributions declared quarterly to the state budget include:

- VAT, personal income tax for cases where taxpayers choose quarterly declaration, meeting the criteria stipulated in Article 9 of Decree 126/2020/ND-CP.

- Corporate income tax for foreign airlines and foreign reinsurance.

- VAT, corporate income tax, personal income tax for credit institutions or third parties authorized by credit institutions to exploit secured assets while waiting for processing, declared on behalf of taxpayers with secured assets.

- Personal income tax for organizations or individuals paying income subject to tax withholding according to the personal income tax laws, where the income-paying organizations or individuals declare VAT quarterly and opt for quarterly personal income tax declaration; individuals with income from wages or salaries who directly declare tax to the tax authorities and opt for quarterly personal income tax declaration.

- Other types of taxes and contributions to the state budget declared on behalf of individuals where the declaring organization or individual declares VAT quarterly and opts to declare on behalf of the individual quarterly, except for cases specified at Point g, Clause 4 of this Article.

- Additional charges when crude oil prices increase (excluding the oil and gas activities of the Vietsovpetro Joint Venture at Block 09.1).

What is the taxpayer's responsibility to determine their eligibility for quarterly tax declaration in Vietnam?

According to Clause 2, Article 9 of Decree 126/2020/ND-CP, the taxpayer's responsibility to determine their eligibility for quarterly tax declaration is regulated as follows:

- Taxpayers meeting the criteria for quarterly tax declaration can choose to declare tax monthly or quarterly steadily throughout the calendar year.

- If taxpayers currently declare tax monthly but meet the conditions for quarterly declaration and opt to switch to quarterly declaration, they must submit a request as stipulated in Appendix I of this Decree to their direct tax authority no later than January 31 of the year starting quarterly declaration. If the taxpayer fails to submit the request to the tax authority by this deadline, they must continue monthly tax declaration steadily throughout the calendar year.

- If taxpayers themselves discover they do not meet the conditions for quarterly tax declaration, they must switch to monthly tax declaration from the first month of the next quarter. They are not required to resubmit the monthly tax returns of previous quarters but must submit a statement determining the additional tax amount due compared to the quarterly declared amount as per Appendix I of this Decree and apply late payment interest accordingly.

- If the tax authority discovers taxpayers do not meet the conditions for quarterly tax declaration, the tax authority must determine the additional monthly tax due compared to the amount declared by the taxpayer and apply late payment interest accordingly. Taxpayers must switch to monthly tax declaration from the time they receive the tax authority's notice.