What are the documents to be retained by individual businesses paying tax under separate declarations in Vietnam?

What is the definition of individual businesses paying tax under separate declarations in Vietnam?

Pursuant to Article 3 of Circular 40/2021/TT-BTC, the following regulations apply:

Definitions

In addition to the terms defined by the Law on Tax Administration, tax Laws and relevant Decrees, the terms below are construed as follows for the purpose of this Circular:

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2. A “large-scale” household business or individual business means a household business or individual business that satisfies the highest criteria for revenue and employees of extra-small enterprises. To be specific: A household business or individual business in aquaculture, forestry, aquaculture, industry, construction has an annual average number of at least 10 employees participating in social insurance or has a total revenue in the preceding year of at least 3 billion VND; a household business or individual business in the field of commerce or services has an annual average number of at least 10 employees participating in social insurance or has a total revenue in the preceding year of at least 10 billion VND.

3. “periodic declaration” means a method of declaring, calculating proportional tax on actual revenue earned per month or quarter.

4. “household businesses and individual businesses paying tax under periodic declarations” are large-scale household businesses and individual businesses or other household businesses and individual businesses that choose to pay tax under periodic declarations.

5. “separate declaration” means a method of declaring, calculating proportional tax on actual revenue earned separately.

6. “individual businesses paying tax under separate declarations” are individual businesses who have casual business operation and do not have fixed business locations.

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Thus, “individual businesses paying tax under separate declarations” are individual businesses who have casual business operation and do not have fixed business locations.

Pursuant to Clause 2, Article 6 of Circular 40/2021/TT-BTC, the following regulations apply:

Method for calculating tax individual businesses under separate declarations

1. Individual businesses who have casual business operation and do not have fixed business locations shall pay tax separately. The individual shall determine whether his/her business is “casual” according to its characteristics in each business line. Fixed business location means the place where the individual’s business operation is carried out such as: transaction location, store, factory, warehouse, depot or a similar location.

2. Individual businesses paying tax under separate declarations include:

a) Travelling traders;

b) Individuals that are private construction contractors;

c) Individuals transferring Vietnam’s top-level domains “.vn”;

d) Individuals earning incomes from digital information products and/or services that do not choose to pay tax under periodic declarations.

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Individual businesses paying tax under separate declarations in Vietnam include the following individuals:

- Travelling traders;

- Individuals that are private construction contractors;

- Individuals transferring Vietnam’s top-level domains “.vn”;

- Individuals earning incomes from digital information products and/or services that do not choose to pay tax under periodic declarations.

What are the documents to be retained by individual businesses paying tax under separate declarations in Vietnam? (Image from the Internet)

What are the documents to be retained by individual businesses paying tax under separate declarations in Vietnam?

Pursuant to Clause 3, Article 6 of Circular 40/2021/TT-BTC, the following regulations apply:

Method for calculating tax individual businesses under separate declarations

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3. Individual businesses paying tax under separate declarations are not required to do accounting but must retain invoices, contracts, documents proving the legality of their goods and services and enclose them with the separate tax declarations.

4. Individual businesses paying tax under separate documents shall declare tax whenever taxable revenue is earned.

Thus, individual businesses paying tax under separate declarations are not required to do accounting but must retain invoices, contracts, documents proving the legality of their goods and services and enclose them with the separate tax declarations.

What does the tax declaration dossier submitted by individual businesses paying tax under separate declarations in Vietnam include?

Pursuant to Clause 1, Article 12 of Circular 40/2021/TT-BTC, the tax declaration dossier submitted by individual businesses paying tax under separate declarations in Vietnam includes:

- Tax declaration form for household/individual businesses according to form No. 01/CNKD issued together with Circular 40/2021/TT-BTC: Here

The following documents:

+ Copy of the contract for provision of goods/services;

+ Copy of the contract finalization record;

+ Documents proving origins of goods such as: manifest of domestic farm products; manifest of traded goods of border residents for goods imported by border residents; invoices provided by sellers for imports purchased from domestic organizations and individuals; documents proving that the goods are manufactured by the individual business, etc.

Note: The tax authority is entitled to request the taxpayer to present original copies for comparison with the copies.