Which taxes shall be calculated and informed by tax authorities in Vietnam?

Which taxes shall be calculated and informed by tax authorities in Vietnam?

Based on Article 13 of Decree 126/2020/ND-CP which stipulates the cases where the tax authority calculates tax and notifies taxpayers as follows:

(1) The case in which the tax authority calculates the tax and notifies the payable tax amount according to the taxpayer's tax declaration dossier, applicable to specific cases as follows:

- Personal income tax from inheritance, gifts (excluding inheritance, gifts being real estate as prescribed at point a, clause 2, Article 13 of Decree 126/2020/ND-CP).

- Non-agricultural land use tax for households and individuals (excluding aggregate declaration cases, where the taxpayer must self-determine the additional payable tax due to aggregate declaration and pay it to the state budget).

- Agricultural land use tax for households and individuals.

- Types of taxes, fees, charges, and other collections payable to the state budget for business households, individual businesses paying tax under the presumptive method.

- Land rent, water surface rent applicable in the absence of a lease decision or lease contract (excluding land rent, water surface rent arising in economic zones, high-tech zones).

- Business license fee for business households, individual businesses paying tax by the declaration method.

- Registration fees (excluding houses and land as prescribed at point a, clause 2, Article 13 of Decree 126/2020/ND-CP).

- Personal income tax from real estate transfer; from receiving inheritance, gifts being real estate (applied to the case prescribed at points d.2, d.3, clause 7, Article 11 of Decree 126/2020/ND-CP).

(2) The case in which the tax authority calculates the tax and notifies the payable tax amount based on financial obligation determination dossiers transferred by competent state management agencies. To be specific:

- Personal income tax from real estate transfer; from receiving inheritance, gifts being real estate (applied to the case prescribed at point d.1, clause 7, Article 11 of Decree 126/2020/ND-CP) and registration fees for houses and land.

- Land use levy (excluding land levy arising in economic zones, high-tech zones).

- Land rent, water surface rent (excluding land rent, water surface rent arising in economic zones, high-tech zones).

(3) The case in which the tax authority notifies the payable tax amount based on a tax calculation document transferred from competent state management agencies. To be specific:

- Fees for the right to exploit minerals.

- Fees for the right to exploit water resources.

- Marine area usage fees.

(4) Cases in which the tax authority determines tax payable by taxpayers as prescribed at Article 50 of the Law on Tax Administration 2019 and Article 14 of Decree 126/2020/ND-CP.

(5) For export and import goods, the customs authority calculates and notifies the tax in the following cases:

- The taxpayer is determined tax payable by the customs authority as prescribed at Article 52 of the Law on Tax Administration 2019, Article 17 of Decree 126/2020/ND-CP.

- The taxpayer ceases operations, does not operate at the registered business address, dissolves, or goes bankrupt without completing tax obligations, and the customs authority calculates the tax and notifies the tax to identify the payable tax amount by organizations and individuals involved as prescribed by law.

- A competent state agency requests the customs authority to determine the tax amount for confiscated export, import goods as a handling basis according to legal regulations.

- Imported goods that have not paid any taxes at the import stage, are subject to seizure and sell-off by competent agencies; if the goods are taxed at the import stage, the customs authority calculates the tax and notifies the auction organizer to pay the tax amount.

- The taxpayer is administratively fined for tax management violations, where the fine amount is calculated based on the undeclared tax amount, the evaded tax amount.

- Imported goods exempt from tax or not subject to tax, where the customs declarant uses them as collateral or mortgages as loan security, if the credit institution must handle the collateral or mortgage assets according to law to recover the debt, but the customs declarant has not filed a new customs declaration or paid full tax as prescribed by customs law, the customs authority calculates and notifies the credit institution of the payable tax amount.

- Customs fees; fees for goods, luggage, and vehicles in transit.

Which taxes shall be calculated and informed by tax authorities in Vietnam? (Image from the Internet)

What are the deadlines for the tax authority to issue tax notices in Vietnam?

Based on Article 13 of Decree 126/2020/ND-CP which stipulates the deadlines for the tax authority to issue tax notices as follows:

(1) The deadline for the tax authority to issue tax notices from the date of receiving the valid, complete tax declaration dossier in the correct format from the taxpayer in the following specific cases:

- For cases prescribed at point a, point b, point c, clause 1, Article 13 of Decree 126/2020/ND-CP:

+ No later than 5 working days from the date the taxpayer submits directly to the tax authority or the receiving agency forwards the dossier via the one-stop-shop mechanism for the first declaration, declaration upon changes in calculation basis factors, additional declaration. In the case of changing taxpayers but the previous taxpayer has completed the tax obligation for the year, the tax authority does not issue a tax notice.

+ No later than April 30 for annual tax obligations (except for aggregate declarations as provided at point b.5, clause 3, Article 10 of Decree 126/2020/ND-CP).

+ In case the local harvesting season for agricultural products does not coincide with the deadline for the agricultural land use tax payment, the tax authority is allowed to extend the issuing tax notice deadline but not more than 60 days compared to the prescribed deadline.

- In case the tax declaration dossier is invalid, incomplete, or not in the prescribed format, the tax authority notifies the taxpayer as prescribed in clause 2, Article 48 of the Law on Tax Administration 2019 or cooperates with competent state agencies to verify the information as a basis for tax calculation and issuance of tax notice as prescribed.

- Immediately on the working day or at the latest by the following working day for the cases prescribed at point g, clause 1, Article 13 of Decree 126/2020/ND-CP.

(2) For business households, individual businesses prescribed at point d and point e, clause 1, Article 13 of Decree 126/2020/ND-CP:

- No later than the 20th day of the month in which the tax payable arises for newly established business households, individual businesses.

- No later than January 20 each year for subsequent years.

(3) The deadline for the tax authority to issue and send tax notices to taxpayers for the cases prescribed at point đ, point h, clause 1, and clause 2, Article 13 of Decree 126/2020/ND-CP from the date of receiving the taxpayer's tax declaration dossier, transferred information slips to determine financial obligations on land and complete legal documents from competent state agencies. To be specific:

- No later than 5 working days for information slips to determine financial obligations on land transferred by competent state agencies, except for the case prescribed at point b, clause 6, Article 13 of Decree 126/2020/ND-CP; documents from competent state agencies determining the land rent, and water surface rent payable already notified to the taxpayer inconsistent with legal regulations; allowing for extension of land use in case of delayed land use or delayed land use progress compared to the project investment schedule, and other cases as prescribed by law.

- No later than 3 working days from the date of receiving the financial agency's document determining items deductible from the lessee’s land rent, water surface rent, land levy payable. The financial agency must determine deductible items from the taxpayer's land rent, water surface rent, land levy payable and send them to the tax authority no later than 5 working days from the date of receiving the dossier from the Land Registration Office.

- No later than 3 working days from the date of receiving the taxpayer's tax declaration dossier, the tax authority issues a document using Form 01/CCTT-TDMN in Annex 2 issued with Decree 126/2020/ND-CP sent to the competent state agency to provide cadastral information as a basis for issuing the payment notice to the taxpayer.

- No later than April 30 each year, the tax authority issues a notice of land rent, water surface rent payable sent to the taxpayer for land lease, water surface rent payment annually, and where competent authorities adjust the land rent, water surface rent for the next stable cycle, the tax authority must recalculate and notify the taxpayer of the land rent, water surface rent payable.

(4) The deadline for the tax authority to issue and send tax notices to taxpayers for the case prescribed at clause 3, Article 13 of Decree 126/2020/ND-CP from the date of receiving the decision, notice, document from competent state agencies. To be specific:

- No later than 10 working days from the date of receiving the decision, notice, or complete legal document from competent state agencies.

- No later than April 30 each year, the tax authority issues a notice of payment for subsequent years for fees for the right to exploit minerals, fees for the right to exploit water resources, fees for using the marine area by the form of annual payment.

What are the principles of tax calculation in Vietnam according to current regulations?

Based on Article 42 of the Law on Tax Administration 2019 which stipulates the principles of tax calculation as follows:

- Taxpayers calculate their payable tax amount, except where the tax calculation is performed by the tax authority as regulated by the Government of Vietnam.

- Taxpayers calculate taxes at the competent local tax authority where their headquarters is located. In case taxpayers account for tax centrally at the headquarters and have dependent units in a provincial administrative unit different from where the headquarters is, they declare taxes at the headquarters and calculate, allocate the tax obligations payable to each locality where the state budget revenue is enjoyed.

- For electronic commerce, digital platform-based business activities, and other services provided by an overseas supplier without a permanent establishment in Vietnam, the overseas supplier is obliged to directly or authorizing perform taxpayer registration, declaration, and payment in Vietnam as regulated by the Minister of Finance.

- Principles of declaration and determination of tax calculation prices for associated transactions are regulated as follows:

+ Declare and determine the price of associated transactions according to the principle of analysis, comparison with independent transactions, and the principle that the essence of operations and transactions determines tax obligations to determine payable tax obligations as in conditions of transactions between independent parties;

+ The price of associated transactions is adjusted according to independent transactions to declare and determine the payable tax amount according to the principle that does not reduce taxable income;

+ Taxpayers of a small scale with low tax risk are exempt from the provisions at point a, point b, clause 5, Article 42 of the Law on Tax Administration 2019 and are subject to simplified mechanisms in declaration and determination of associated transaction prices.