Which entities are required to register tax directly with the tax authorities in Vietnam according to Circular 86?

Which entities are required to register tax directly with the tax authorities in Vietnam according to Circular 86?

On December 23, 2024, the Minister of Finance of Vietnam issued Circular 86/2024/TT-BTC prescribing tax registration. This Circular will replace Circular 105/2020/TT-BTC and will take effect on February 6, 2025.

Specifically, as per Clause 2, Article 4 of Circular 86/2024/TT-BTC, subjects required to carry out tax registration directly with the tax authorities include:

(i) Enterprises operating in specialized sectors not required to register business through the business registration authority as prescribed by specialized law (hereinafter referred to as Economic Organizations).

(ii) Public service units, economic organizations of the armed forces, economic organizations of political, political-social, social, social-professional organizations conducting business under the law but not required to register business through the business registration authority; organizations from countries sharing a land border with Vietnam conducting purchase, sale, exchange of goods at border markets, border gate markets, markets in border-gate economic zones; representative offices of foreign organizations in Vietnam; cooperatives established and operating under the provisions of Decree 77/2019/ND-CP but not required to register business through the business registration authority as prescribed in Clause 2, Article 107 of Cooperative Law 2023 (hereinafter referred to as Economic Organizations).

(iii) Organizations established by competent authority without production, business activities but arising obligations with the state budget (hereinafter referred to as Other Organizations).

(iv) Foreign organizations and individuals and organizations in Vietnam utilizing humanitarian aid money, non-refundable aid from abroad to purchase goods and services with value-added tax in Vietnam for non-refundable aid and humanitarian aid; diplomatic representative agencies, consular agencies, and representative offices of international organizations in Vietnam subject to value-added tax refund for subjects enjoying diplomatic immunity; ODA project entities eligible for value-added tax refund, ODA project donor's representative offices, organizations appointed by foreign donors to manage non-refundable ODA programs and projects (hereinafter referred to as Other Organizations).

(v) Foreign organizations without legal personality in Vietnam, foreign individuals independently practicing business in Vietnam under Vietnamese law with income generated in Vietnam or arising tax obligations in Vietnam (hereinafter referred to as Foreign Contractors, Foreign Subcontractors).

(vi) Overseas suppliers without a permanent establishment in Vietnam, foreign individuals not residing in Vietnam conducting e-commerce business, digital platform-based business and other services with organizations and individuals in Vietnam (hereinafter referred to as Overseas Suppliers).

(vii) Enterprises, organizations, individuals with responsibility to withhold and pay taxes on behalf of other taxpayers must declare and determine their separate tax obligations according to the law on tax administration (except income-paying organizations withholding and paying personal income tax on behalf); commercial banks, intermediary payment service providers or organizations, individuals authorized by overseas suppliers responsible for declaring, withholding and paying taxes on behalf of overseas suppliers (hereinafter referred to as Withholding Organizations, Individuals).

(viii) Executives, joint operating companies, joint venture companies, organizations assigned by the Government of Vietnam with the task of receiving Vietnam's share from oil and gas fields in overlapping areas, contractors, investors participating in petroleum contracts, parent company - Vietnam National Oil and Gas Group representing the host country to receive profit-sharing from petroleum contracts.

(ix) Households, individuals engaged in the production and business of goods and services as stipulated by law but not required to register as a business household through the business registration authority according to the Government of Vietnam's regulations on business households; individual businesses of countries sharing a land border with Vietnam conducting purchase, sale, exchange of goods at border markets, border gate markets, and markets in border-gate economic zones.

(x) Individuals with income subject to personal income tax (excluding business individuals).

(xi) Individuals considered dependents as stipulated by personal income tax law.

(xii) Organizations or individuals authorized by the tax authorities to collect taxes.

(xiii) Other organizations, households, and individuals bearing obligations to the state budget.

Which entities are required to register tax directly with the tax authorities in Vietnam according to Circular 86? (Image from Internet)

Vietnam: What does the initial tax registration application include?

According to Article 31 of Law on Tax Administration 2019 regarding the initial tax registration application:

Case 01: If the taxpayer is an organization performing tax registration directly with the tax authority, the dossier includes:

- tax registration declaration form;

- A copy of the establishment and operation license, establishment decision, investment registration certificate, or other equivalent document issued by the competent authority that is still valid;

- Other related documents.

Case 02: If the taxpayer is a household, business household, or individual performing tax registration directly with the tax authority, the dossier includes:

- tax registration declaration form or tax declaration form;

- A copy of the identity card, a copy of the citizen identification card, or a copy of the passport;

- Other related documents.

Where to submit the initial tax registration application in Vietnam?

Based on Article 31 of Law on Tax Administration 2019, subjects required to register tax directly with the tax authority should submit their dossiers as follows:

- Organizations, business households, and business individuals submit their tax registration applications at the tax authority where the organization, business household, or individual owns its headquarters;

- Organizations and individuals responsible for withholding and paying taxes on behalf of others submit tax registration applications at the tax authority directly managing those organizations or individuals;

- Households and individuals not engaged in business activities submit their tax registration applications at the tax authority where taxable income arises, their permanent residence registration or temporary residence registration is located, or where obligations with the state budget arise.

Note:

+ Individuals may authorize organizations or individuals paying income to register taxpayers on their behalf and their dependents by submitting tax registration documents through the income-paying organization or individual.

+ Income-paying organizations or individuals have the responsibility to compile and submit tax registration applications on behalf of individuals to the tax authority directly managing that income-paying organization or individual.