When is the time to declare value-added tax monthly in Vietnam?

When is the time to declare value-added tax monthly in Vietnam?

Based on Clause 1, Article 8 of Decree 126/2020/ND-CP, the regulations are as follows:

Taxes declared monthly, quarterly, annually, upon each tax obligation arising, and tax finalization declarations

1. Types of taxes and other state budget revenues managed by tax authorities to be declared monthly include:

a) Value-added tax and personal income tax. In case the taxpayer meets the criteria stipulated in Article 9 of this Decree, they may opt to declare quarterly.

b) Special consumption tax.

c) Environmental protection tax.

d) Natural resource tax, except as prescribed in point e of this clause.

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Value-added tax is a type of tax that organizations and individuals declare monthly. However, if the taxpayer meets the conditions to be eligible to declare quarterly, they may choose to declare either monthly or quarterly.

When is the time to declare value-added tax monthly in Vietnam? (Image from the Internet)

When is the time to declare value-added tax quarterly in Vietnam?

Based on Clause 1, Article 9 of Decree 126/2020/ND-CP, the regulations are as follows:

Criteria for quarterly tax declaration for value-added tax and personal income tax

1. Criteria for quarterly tax declaration

a) Quarterly value-added tax declaration applies to:

a.1) Taxpayers subject to monthly value-added tax declaration as stipulated in point a, clause 1, Article 8 of this Decree, if their total revenue from the sale of goods and provision of services in the preceding year is 50 billion dong or less, they are eligible to declare value-added tax quarterly. Revenue from the sale of goods and provision of services is determined as the total revenue declared on value-added tax returns for the tax periods in the calendar year.

In case the taxpayer centralizes tax declaration at the headquarters for dependent units, business locations, the revenue from the sale of goods and provision of services include the revenue of the dependent units, business locations.

a.2) In case the taxpayer has just started operations, they may choose to declare value-added tax quarterly. After 12 months of operation, from the following calendar year, they will base the declaration on the revenue of the preceding calendar year (full 12 months) to perform value-added tax declaration either monthly or quarterly.

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Thus, taxpayers eligible to declare quarterly must first be subject to monthly declarations and must meet the following conditions to opt for quarterly declarations:

- The total revenue from the sale of goods and provision of services in the preceding year is 50 billion dong or less.

- New operations and business start.

Principles of tax declaration in Vietnam

According to Article 42 of the 2019 Law on Tax Management regarding principles of tax declaration and calculation:

- Taxpayers must declare accurately, truthfully, and fully the content in the tax declaration form as prescribed by the Minister of Finance and submit all relevant documents as required in the tax declaration dossier to the tax authority.

- Taxpayers calculate the payable tax amount themselves, except where the tax authority calculates the tax under government regulations.

- Taxpayers make tax declarations and tax calculations at the local tax agency with jurisdiction over their headquarters.

In cases where taxpayers have centralized accounting at the headquarters but have dependent units in different provincial administrative units rather than the headquarters location:

Taxpayers declare tax at the headquarters and calculate, allocate the tax responsibility to respective localities where revenue from state budget sources is enjoyed.

- For e-commerce business operations, digital platform-based businesses, and other services provided by foreign suppliers without a permanent establishment in Vietnam:

Foreign suppliers are obligated to directly or authorize others to perform taxpayer registration, tax declarations, and tax payments in Vietnam as prescribed by the Minister of Finance.

- Filing principles and tax valuation in related party transactions are regulated as follows:

+ Declare and determine the price of related party transactions based on comparative analysis with independent transactions and the principle that the nature of activities, transactions determines the tax liability to establish payable tax as in conditions of independent transactions;

+ Related party transaction prices are adjusted according to independent transactions to declare and determine payable tax based on the principle of not reducing taxable income;

+ Small-scale taxpayers with low tax risk are exempt from complying with points a, b, clause 5, Article 42 2020 Law on Tax Management and may apply simplified procedures in declaring and determining related party transaction prices.

- Principles of tax declaration for advance pricing agreements are regulated as follows:

+ The application of advance pricing agreements is based on the taxpayer's proposal and consensus between the tax agency and the taxpayer under unilateral, bilateral, and multilateral agreements between the tax agency, the taxpayer, and relevant foreign tax agencies, territories;

+ The application of advance pricing agreements must rely on the taxpayer's information, verified commercial databases ensuring legality;

+ The application of advance pricing agreements must be approved by the Minister of Finance before implementation;

For bilateral and multilateral agreements involving foreign tax agencies, international treaties, or agreements take precedence.