Where do travelling traders submit tax declarations in Vietnam?

How do travelling traders pay taxes in Vietnam?

According to Article 6 of Circular 40/2021/TT-BTC, the method for calculating tax for individual businesses who pay taxes under separate declarations is stipulated as follows:

Tax calculation method for individual businesses paying taxes under separate declarations

1. The ad-hoc tax declaration method applies to individual businesses who operate irregularly and do not have a fixed business location. Irregular business activities are determined based on the nature of production and business activities in specific sectors or industries and are self-determined by individuals to choose a tax declaration method as guided in this Circular. A fixed business location is a place where an individual conducts production and business activities such as: transaction points, stores, shops, factories, warehouses, piers, yards, or other similar places.

2. individual businesses paying taxes under separate declarations include:

a) travelling traders;

b) Individuals as heads of private construction projects;

c) Individuals transferring the Vietnamese national internet domain ".vn";

d) Individuals with income from digital content products and services who do not choose to pay tax by declaration method.

3. individual businesses paying taxes under separate declarations are not required to implement accounting policies but must retain invoices, documents, contracts, and files proving the legality of goods and services and present them along with each ad-hoc tax declaration.

4. individual businesses paying taxes under separate declarations must declare taxes when taxable revenue arises.

Thus, travelling traders pay taxes under separate declarations. In this case, travelling traders are not required to adopt accounting policies but must retain invoices, documents, contracts, and documentation proving the legality of goods and services and present them along with each ad-hoc tax declaration. They must also declare taxes when taxable revenue arises.

individual businesses paying taxes under separate declarations must declare taxes when taxable revenue arises.

Where do travelling traders submit tax declarations in Vietnam? (Image from the Internet)

Where do travelling traders submit tax declarations in Vietnam?

According to Clause 2, Article 12 of Circular 40/2021/TT-BTC, the location for submitting tax declarations for individual businesses paying taxes under separate declarations is as follows:

Tax Management for individual businesses Paying Taxes under separate declarations

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2. Location for submitting tax declarations

The location for submitting tax declarations for individual businesses paying taxes under separate declarations is specified in Clause 1, Article 45 of the Tax Administration Law. Specifically:

a) In the case of mobile businesses, tax declarations are submitted at the Tax Department directly managing the location where the individual conducts business activities.

b) For individuals with income from digital content products and services, tax declarations are submitted at the Tax Department directly managing the individual's residence (permanent or temporary).

c) For individuals with income from transferring the Vietnamese national internet domain ".vn", tax declarations are submitted at the Tax Department where the individual resides. In cases where the transferring individual is non-resident, tax declarations are submitted at the tax agency directly managing the organization responsible for managing the Vietnamese national internet domain ".vn".

d) For individuals as heads of private construction projects, tax declarations are submitted at the Tax Department directly managing the location where the individual conducts construction activities.

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travelling traders submit tax declarations at the Tax Department directly managing the location where the individual conducts mobile business activities.

Vietnam: How is the tax amount for travelling traders determined?

According to Article 10 of Circular 40/2021/TT-BTC, the determination of the tax amount to be paid by travelling traders is specified as follows:

(1) The VAT amount travelling traders must pay = VAT taxable revenue x VAT rate;

(2) The Personal Income Tax (PIT) amount travelling traders must pay = PIT taxable revenue x PIT rate.

In which:

- VAT taxable revenue and PIT taxable revenue for travelling traders is the revenue including tax (where applicable) of all sales proceeds, processing fees, commissions, and service provisions arising during the tax period from production and business activities, including bonuses, sales support, promotions, commercial discounts, payment discounts, monetary or non-monetary support; subsidies, surcharges, additional fees as stipulated; compensation for breach of contract, other compensation (only calculated in PIT taxable revenue); other revenue that travelling traders are entitled to, regardless of whether the money has been collected or not.

- The VAT rate and PIT rate are detailed for each sector and industry as guided in Appendix 1 attached to Circular 40/2021/TT-BTC;

In cases where travelling traders operate in multiple sectors or industries, they must declare and calculate taxes according to the tax rate on revenue applicable to each sector or industry.

In cases where the taxable revenue of each sector or industry cannot be determined or is not consistent with the actual business, the tax authority will determine taxable revenue of each sector or industry according to the regulations of the tax management law.