What are the regulations on fixed tax payment for household businesses and individual businesses in Vietnam?

What are the regulations on fixed tax payment for household businesses and individual businesses in Vietnam?

Pursuant to Article 3 of Circular 40/2021/TT-BTC regulation:

Terminology Explanation

In addition to terms already explained in the Law on Tax Administration, tax laws, and related decrees, some other terms in this Circular are understood as follows:

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2. “Large-scale household business, individual business household” refers to a household business or individual business household with revenue and labor scale meeting from the highest criteria of a micro-enterprise upwards. Specifically: household businesses, individual businesses in agriculture, forestry, fishery, and industrial, construction sectors with an average annual number of employees participating in social insurance from 10 people or more or total revenue of the previous year from 3 billion VND or more; household businesses, individual businesses in the trade and service sectors with an average annual number of employees participating in social insurance from 10 people or more or total revenue of the previous year from 10 billion VND or more.

3. “Declaration method” is the method of tax declaration and calculation based on a percentage of actual revenue generated per month or quarter.

4. “Household businesses, individual businesses taxed under the declaration method” refers to large-scale household businesses, individual businesses; household businesses, individual businesses that do not meet the large-scale standard but choose to pay taxes under the declaration method.

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8. “Household businesses, individual businesses paying fixed tax” refers to those that do not implement or fully implement accounting policies, invoices, and receipts, except for household businesses, individual businesses falling under the declaration method and individual businesses under the each-time-arises taxation method.

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Household businesses and individual businesses paying fixed tax are understood as those that do not implement or fully implement accounting policies, invoices, and receipts, except for household businesses, individual businesses taxed under the declaration method and individual businesses taxed per transaction occurrence.

Do household businesses, individual businesses paying fixed tax need to follow accounting policies in Vietnam ?

Pursuant to Article 7 of Circular 40/2021/TT-BTC, household businesses and individual businesses paying fixed tax (Households paying fixed tax) are not required to follow accounting policies.

Households paying fixed tax using individual invoices must store and present to the tax authorities the invoices, documents, contracts, and records proving the legality of goods and services when requesting the issuance of retail invoices per transaction occurrence.

For households paying fixed tax doing business in border markets, border-gate markets, and markets in border economic zones within Vietnamese territory, they must store invoices, documents, contracts, and records proving the legality of goods and present them upon request by competent state management agencies.

What are the regulations on fixed tax payment for household businesses and individual businesses in Vietnam? (Image from the Internet)

Who is responsible for determining the revenue and tax amount for household businesses and individual businesses paying fixed tax in Vietnam?

Pursuant to Article 19 of Circular 40/2021/TT-BTC, the following provisions apply:

Responsibilities of the Tax Sub-department

The Tax Sub-department, in addition to regularly performing tax collection duties, also holds responsibilities for managing household businesses, individual businesses as follows:

1. Propagate, support household businesses, individual businesses in tax declaration, filing of tax returns, tax payment, and public information retrieval related to household businesses, individual businesses as prescribed.

2. Follow the procedures for determining revenue and tax amount for household businesses, individual businesses paying fixed tax as guided in Article 13 of this Circular. This includes key tasks such as: determining revenue, tax amount; publicly listing information about household businesses, individual businesses paying fixed tax; consulting the Tax Advisory Council; compiling and approving the Tax Ledger; adjusting revenue and tax amount in cases where household businesses, individual businesses have changes in production and business activities; conducting surveys on revenue of household businesses, individual businesses paying fixed tax.

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The Tax Sub-department is responsible for determining the revenue and tax amount for household businesses and individual businesses paying fixed tax, including:

Determining revenue, tax amount; publicly listing information about household businesses and individual businesses paying fixed tax; consulting the Tax Advisory Council; compiling and approving the Tax Ledger; adjusting revenue and tax amount in cases where household businesses, individual businesses have changes in production and business activities; conducting revenue surveys of household businesses, individual businesses paying fixed tax.