When are household businesses in Vietnam required to pay VAT and PIT? What are the regulations on tax declaration applicable to household businesses paying taxes under periodic declarations?
When are household businesses in Vietnam required to pay VAT and PIT?
Under Article 4 of Circular 40/2021/TT-BTC guiding value-added tax, personal income tax, and tax management for household businesses and individual businesses issued by the Vietnam Ministry of Finance:
Tax calculation rules
1. Rules for calculating tax payable by household businesses and individual businesses shall comply with applicable regulations of law on VAT, TIN and relevant legislative documents.
2. A household business or individual business whose revenue from business operation in the calendar year is not exceeding 100 million VND shall not be required to pay VAT and PIT as prescribed by VAT and PIT laws. Household businesses and individual businesses shall declare tax truthfully and accurately; submit tax documents punctually; take legal responsibility for the accuracy, truthfulness and adequacy of the tax documents submitted.
3. For household businesses and individual businesses in the form of groups of individuals or households, the revenue of not exceeding 100 million VND/year as the basis for exemption from VAT and PIT shall be determined for 01 representative of the group of individuals of household in the tax year.
Thus, a household business or individual business whose revenue from business operation in the calendar year is at least 100 million VND shall be required to pay VAT and PIT.
Simultaneously, household businesses and individual businesses shall declare tax truthfully and accurately; submit tax documents punctually; take legal responsibility for the accuracy, truthfulness and adequacy of the tax documents submitted.
When are household businesses in Vietnam required to pay VAT and PIT? What are the regulations on tax declaration applicable to household businesses paying taxes under periodic declarations in Vietnam?
Are household businesses paying taxes under periodic declarations in Vietnam required to make tax finalization?
Under Article 5 of Circular 40/2021/TT-BTC guiding value-added tax, personal income tax, and tax management for household businesses and individual businesses issued by the Vietnam Ministry of Finance:
Method and basis for calculating tax payable by household businesses and individual businesses under periodic declarations
1. Periodic declarations shall be prepared by large-scale household businesses and individual businesses or other household businesses and individual businesses that choose to pay tax under periodic declarations.
2. Household businesses and individual businesses paying tax under periodic declarations shall declare tax monthly, except new businesses and businesses that satisfy the criteria for declaring tax quarterly prescribed in Article 9 of Decree No. 126/2020/ND-CP.
3. If the revenue of a household business or individual business that is paying tax under periodic declarations is found to be false, the tax authority shall impose the taxable revenue as prescribed in Article 50 of the Law on Tax Administration.
4. Household businesses and individual businesses paying tax under periodic declarations shall comply with on accounting, invoices and documents. A household business or individual business is not required to do accounting if their a business line has the basis for determination of revenue which is confirmed by a competent authority,
5. Household businesses and individual businesses paying tax under periodic declarations are not required to finalize tax.
Thus, household businesses and individual businesses paying taxes under periodic declarations are not required to finalize taxes.
However, household businesses and individual businesses paying tax under periodic declarations shall comply with on accounting, invoices and documents. A household business or individual business is not required to do accounting if their a business line has the basis for determination of revenue which is confirmed by a competent authority.
What are the regulations on tax declaration applicable to household businesses paying taxes under periodic declarations in Vietnam?
Under Article 11 of Circular 40/2021/TT-BTC, the regulations are as follows:
The tax declaration dossier shall contain:
+ The tax form No. 01/CNKD enclosed with Circular 40/2021/TT-BTC;
+ The declaration form No. 01-2/BK-HDKD enclosed with Circular 40/2021/TT-BTC (for household businesses and individual businesses paying tax under declarations). Form No. 01-2/BK-HDKD is not required if the household business or individual business is able to determine revenue as confirmed by a competent authority.
Receiving authorities
- Household businesses and individual businesses paying tax under periodic declarations as prescribed in Clause 1 Article 45 of the Law on Tax Administration shall submit tax declaration dossiers to their supervisory sub-department of taxation.
Deadlines for submission of tax declaration dossiers
Household businesses and individual businesses paying tax under periodic declarations shall submit tax declaration dossiers by the deadlines specified in Clause 1 Article 44 of the Law on Tax Administration. To be specific:
+ Household businesses and individual businesses paying tax under monthly periodic declarations shall submit their tax declaration dossiers by the 20th of the month succeeding the month in which tax is incurred.
+ Household businesses and individual businesses paying tax under quarterly periodic declarations shall submit their tax declaration dossiers by the last day of the first month of the quarter succeeding the quarter in which tax is incurred.
Tax payment deadlines
Household businesses and individual businesses paying tax under periodic declarations shall pay tax by the deadline specified in Clause 1 Article 55 of the Law on Tax Administration, which is the deadline for submission of the tax declaration dossier. In case the tax declaration dossier has to be supplemented, tax shall be paid by the deadline for submission of the tax declaration dossier of the erroneous tax period.
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