What is the list of business lines for calculating proportional VAT and PIT on actual revenue earned in Vietnam?
How ro calculate VAT and PIT for household businesses and individual businesses in Vietnam?
Pursuant to Article 10 of Circular 40/2021/TT-BTC, for household businesses and individual businesses, tax calculation bases include taxable revenue and the tax rate on revenue. Specifically:
- Taxable revenue (VAT and PIT) for household businesses and individual businesses include:
+ Revenue including tax (in cases where it is taxable) from all sales, processing fees, commissions, service provision fees arising in the taxable period from production, business activities of goods and services, including bonuses, support for achieving sales targets, promotions, commercial discounts, payment discounts, financial or non-financial support;
+ Price subsidies, surcharges, extra fees received according to regulations;
+ Compensation for contract violations, other compensations (only included in the taxable revenue for PIT);
+ Other revenue that household businesses and individual businesses are entitled to, regardless of whether the money has been collected or not.
- The tax rate on revenue is determined as follows:
+ The tax rate on revenue includes VAT rate and PIT rate applied in detail to each sector, occupation as guided in Appendix I issued together with this Circular.
+ In cases where household businesses, individual businesses operate in multiple sectors, occupations, they declare and calculate tax according to the tax rate on revenue applied to each specific sector, occupation.
+ In cases where household businesses, individual businesses cannot determine the taxable revenue of each sector, occupation or determine it inappropriately with actual business operations, the tax authority imposes the taxable revenue of each sector, occupation according to the law on tax management.
What is the list of business lines for calculating proportional VAT and PIT on actual revenue earned in Vietnam? (Image from Internet)
How to determine the VAT and PIT payable for household businesses in Vietnam?
According to Clause 3, Article 10 of Circular 40/2021/TT-BTC, the determination of VAT and PIT payable for household businesses is as follows:
(1) VAT payable = Taxable revenue for VAT x VAT rate
(2) PIT payable = Taxable revenue for PIT x PIT rate
What is the list of business lines for calculating proportional VAT and PIT on actual revenue earned in Vietnam?
Based on Appendix I issued together with Circular 40/2021/TT-BTC, the list of business lines for calculating proportional VAT and PIT on actual revenue earned for household businesses, individual businesses is regulated as follows:
| No. | Industry List | VAT Rate % | PIT Rate |
|---|---|---|---|
| 1. | Distribution, provision of goods | ||
| - Wholesale and retail of goods (excluding the value of consigned goods for sale at the correct price to receive commissions); - Bonuses, support for achieving sales targets, promotions, commercial discounts, payment discounts, financial or non-financial support for fixed contracts; |
1% | 0.5% | |
| - Distribution, provision of goods not subject to VAT, non-declaration of VAT, subject to 0% VAT according to VAT law; - Business cooperation activities with organizations in this industry group where the organization is responsible for VAT declaration on the entire revenue of business cooperation activities according to regulations; - Bonuses, support for achieving sales targets, promotions, commercial discounts, payment discounts, financial or non-financial support for fixed contracts linked to the purchase of goods, services not subject to VAT, non-declaration of VAT, subject to 0% VAT according to VAT law; - Compensation for contract violations, other compensations. |
- | 0.5% | |
| 2 | Services, construction excluding materials | ||
| - Accommodation services including: Short-term lodging provision for tourists, other transient guests; Long-term lodging provision not constituting apartments for students, workers, and similar subjects; Lodging provisions with dining services or entertainment facilities; - Cargo handling services and other supporting activities related to transportation such as parking, ticket sales, vehicle care; - Postal, courier services; - Brokerage, auction services and commission agent; - Legal advice, financial advice, accounting, auditing services; tax, customs administrative procedures services; - Data processing services, leasing of IT portals, information technology, telecommunications equipment; advertising on digital information content services; - Office support services and other business support services; - Spa, massage, karaoke, disco, billiards, internet, game services; - Tailoring, laundry; haircutting, hairstyling, shampooing services; - Other repair services including: repair of computers and household goods; - Consulting, design, supervision of basic construction services; - Other services subject to VAT by deduction method at a VAT rate of 10%; - Construction, installation excluding materials (including installation of machinery, industrial equipment); |
5% | 2% | |
| - Service provision not subject to VAT, non-declaration of VAT, subject to 0% VAT according to VAT law; - Business cooperation activities with organizations in this industry group where the organization is responsible for VAT declaration on the entire revenue of business cooperation activities according to regulations; - Compensation for contract violations, other compensations; |
- | 2% | |
| - Lease of assets includes: + Lease of houses, land, stores, factories, warehouses excluding accommodation services; + Lease of transport vehicles, machinery, equipment without operators; + Lease of other assets without services |
5% | 5% | |
| - Lottery agency, insurance agency, multi-level marketing agency; - Compensation for contract violations, other compensations. |
- | 5% | |
| 3. | Production, transportation, services associated with goods, construction including materials | ||
| - Production, processing, and manufacture of goods; - Mining, mineral processing; - Freight and passenger transportation; - Services accompanying goods sales such as training, maintenance, technology transfer along with product sales; - Food services; - Repair and maintenance services for machinery, equipment, transport vehicles, cars, motorcycles, and other motor vehicles; - Construction, installation including materials (including installation of machinery, industrial equipment); - Other activities subject to VAT by deduction method at a VAT rate of 10%; |
3% | 1.5% | |
| - Activities not subject to VAT, non-declaration of VAT, subject to 0% VAT according to VAT law; - Business cooperation activities with organizations in this industry group where the organization is responsible for VAT declaration on the entire revenue of business cooperation activities according to regulations. |
- | 1.5% | |
| 4. | Other business activities | ||
| - Production activities for products subject to VAT by deduction method at a VAT rate of 5%; | 2% | 1% | |
| - Provision of services subject to VAT by deduction method at a VAT rate of 5%; | 2% | 1% | |
| - Other activities not listed in groups 1, 2, 3 mentioned above; | 2% | 1% |
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