What is the basis for determining the fixed tax for households in Vietnam? What does the fixed tax declaration dossier include?

What is the basis for determining fixed tax in Vietnam?

According to the provisions in Clause 1, Article 13 of Circular 40/2021/TT-BTC regulating the basis for determining fixed tax for households as follows:

Tax management for fixed households

1. Basis for determining fixed tax for households

The basis for determining fixed tax includes:

a) The tax declaration dossier of fixed households as self-declared by them based on the expected revenue and fixed tax rate for the tax year;

b) The database of the tax authority;

c) Consultative opinions from the commune, ward, or commune-level town tax advisory council;

d) Results of information disclosure and feedback reception from the tax advisory council, People's Committee, People's Council, Vietnam Fatherland Front of communes, wards, commune-level towns, fixed households, and other organizations, individuals.

Public disclosure of fixed household information is when the tax authority organizes the disclosure and receives feedback on revenue and fixed tax rate for fixed households as prescribed. The first information disclosure according to Clause 5 of this Article is for reference and collecting opinions on expected revenue and fixed tax rate; the second information disclosure according to Clause 9 of this Article is for reference and collecting opinions on the official revenue and fixed tax rate payable for the tax year. Information disclosure includes: posting information on paper at the locality; directly sending to fixed households; directly sending to the People's Council, People's Committee, Vietnam Fatherland Front of the district, commune, and commune-level towns; publicizing information on the Tax Department's Website.

From the above regulations, it can be seen that the basis for determining fixed tax for households includes the following grounds:

- Tax declaration dossier of fixed households as self-declared based on the expected revenue and fixed tax rate for the tax year;

- Database of the tax authority;

- Consultative opinions from the commune, ward, or commune-level town tax advisory council;

- Results of information disclosure and feedback reception from the tax advisory council, People's Committee, People's Council, Vietnam Fatherland Front of communes, wards, commune-level towns, fixed households, and other organizations, individuals.

What is the basis for determining the fixed tax for households in Vietnam? What does the fixed tax declaration dossier include? (Image from the Internet)

Vietnam: What does the fixed tax declaration dossier include?

Based on Clause 2, Article 13 of Circular 40/2021/TT-BTC, the tax declaration dossier for fixed households includes the following documents:

- Annually, from November 20 to December 5, the tax authority distributes the next year's tax declaration form to all fixed households.

- The tax declaration dossier for fixed households as prescribed in point 8.1 of Appendix I - List of tax declaration dossiers issued with Decree No. 126/2020/ND-CP by the Government of Vietnam is the Tax Declaration Form for business households, individual businesses as per form No. 01/CNKD issued with Circular 40/2021/TT-BTC.

- In case fixed households use invoices issued by the tax authority for each occurrence, when declaring tax for revenue on a single invoice, they declare tax for each occurrence and use the Tax Declaration Form for business households and individual businesses as per form No. 01/CNKD issued with Circular 40/2021/TT-BTC and concurrently present and submit with the tax declaration dossier the following documents:

+ Copy of the economic contract for the supply of goods and services in the same industry as the fixed household's business activity;

+ Copy of acceptance and liquidation notes of the contract;

+ Copy of documents proving the origin of goods and services such as:

(i) Purchase statement of agricultural products if it is domestic agricultural products;

(ii) A list of goods purchased and exchanged from border residents if it is goods imported by border residents;

(iii) Invoice provided by the seller if it is imports purchased from domestic business organizations or individuals;

(iv) Related documents to prove if it is goods self-produced or provided by individuals;...

How is the fixed tax rate calculated under the fixed tax method in Vietnam?

According to the provisions in Article 51 of the Law on Tax Administration 2019, the fixed tax rate when paying tax under the fixed tax method is calculated as follows:

Determine the tax rate for business households and individual businesses paying tax under the fixed tax method

1. The tax authority determines the payable tax amount under the fixed tax method (hereinafter referred to as fixed tax rate) for cases where business households, individual businesses do not implement or fully implement accounting policies, invoices, documents, except as stipulated in Clause 5 of this Article.

2. The tax authority bases on the declaration documents of business households, individual businesses, the database of the tax authority, and opinions of the commune, ward, commune-level town tax advisory council to determine the fixed tax rate.

3. The fixed tax rate is calculated according to the calendar year or month for seasonal business cases. The fixed tax rate must be made public in the commune, ward, commune-level town area. In case there is a change in the industry, profession, business scale, stopping, or temporarily stopping business, the taxpayer must declare to the tax authority to adjust the fixed tax rate.

4. The Minister of Finance specifies the basis, procedures to determine the fixed tax rate for business households and individual businesses.

5. Business households and individual businesses that meet the criteria for revenue and labor from the highest level of micro-enterprise as prescribed by the law on supporting small and medium-sized enterprises must implement accounting policies and pay taxes under the declaration method.

Thus, the fixed tax rate is calculated according to the calendar year or month for seasonal business cases. The fixed tax rate must be made public in the commune, ward, commune-level town area. In case of changes in industry, profession, business scale, stopping, or temporarily stopping business, the taxpayer must declare to the tax authority to adjust the fixed tax rate.