What is the tax calculation method for individual businesses paying taxes separately in Vietnam?

What is separate tax declaration method in Vietnam?

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

Glossary of Terms

In addition to the terms defined in the Law on Tax Administration, Tax Laws, and related Decrees, some other terms in this Circular are understood as follows:

...

2. "Large-scale business households, individual business" are business households, individual businesses with a scale of revenue, labor that meets the highest criteria of a micro-enterprise or higher. To be specific: business households, individual businesses in agriculture, forestry, fisheries, and industry, construction having an average annual number of employees participating in social insurance from 10 people or more, or total revenue of the preceding year from 3 billion VND or more; business households, individual businesses in commerce, services having an average annual number of employees participating in social insurance from 10 people or more, or total revenue of the preceding year from 10 billion VND or more.

3. "Declaration method" is the method of tax declaration and calculation by a fixed percentage on the actual revenue arising monthly or quarterly.

4. "Business households, individual businesses pay taxes by the declaration method" are large-scale business households, individual businesses; business households, individual businesses that do not meet the large-scale but choose to pay taxes by the declaration method.

5. "Separate declaration" is the method of tax declaration and calculation by a fixed percentage on the actual revenue for each arising occurrence.

...

The separate declaration is understood as the method of tax declaration and calculation by a fixed percentage on the actual revenue for each arising occurrence.

What is the tax calculation method for individual businesses paying taxes separately? (Image from the Internet)

What is the tax calculation method for individual businesses paying taxes separately in Vietnam?

According to Article 6 of Circular 40/2021/TT-BTC, the tax calculation method for individual businesses paying taxes separately is stipulated as follows:

(1) The separate declaration applies to individual businesses that operate irregularly and have no fixed business location.

Irregular business operation is determined based on the characteristics of production and business activities in each field, industry, and is self-determined by individuals to choose the tax declaration method as guided in this Circular.

A fixed business location is where individuals conduct production and business activities, such as a transaction location, shop, store, workshop, warehouse, terminal, yard, or other similar location.

(2) Individual businesses paying taxes separately include:

- Mobile individual businesses;

- Individuals who are private construction contractors;

- Individuals transferring the Vietnam national internet domain name ".vn";

- Individuals with income from digital content products and services if they do not choose to pay taxes using the declaration method.

(3) Individual businesses paying taxes separately are not required to implement accounting policies but must retain invoices, receipts, contracts, and documents proving the legality of goods and services and present them alongside tax declaration dossiers separately.

(4) Individual businesses paying taxes separately must declare taxes when taxable revenue arises.

Where is the place to submit tax declaration dossiers for individual businesses paying taxes separately in Vietnam?

According to Article 12 of Circular 40/2021/TT-BTC, the place to submit tax declaration dossiers for individual businesses paying taxes separately is specified in Clause 1, Article 45 of the Law on Tax Administration 2019. To be specific:

(1) In the case of mobile business operations, the tax declaration dossier is submitted to the Sub-department of Taxation directly managing the location where the individual conducts business activities.

(2) In the case of individuals earning income from digital content products and services, the tax declaration dossier is submitted to the Sub-department of Taxation directly managing the place of residence (permanent or temporary) of the individual.

(3) In the case of individuals earning income from transferring the Vietnam national internet domain name ".vn", the tax declaration dossier is submitted to the Sub-department of Taxation where the individual resides.

In cases where the transferring individual is a non-resident, the tax declaration dossier is submitted to the tax authority directly managing the organization managing the Vietnam national internet domain name ".vn".

(4) In the case of individuals who are private construction contractors, the tax declaration dossier is submitted to the Sub-department of Taxation directly managing the location where the individual engages in construction activities.