In 2024: What are the rules and basis for calculation of tax payable by household businesses and individual businesses in Vietnam?
- What is the basis for calculation of tax payable by household businesses and individual businesses in Vietnam?
- What are the rules for calculation of tax payable by household businesses and individual businesses in Vietnam?
- What are the requirements of the General Department of Taxation on the management of household businesses in Vietnam?
What is the basis for calculation of tax payable by household businesses and individual businesses in Vietnam?
Pursuant to the provisions of Article 10 of Circular 40/2021/TT-BTC, the basis for calculation of tax payable by household businesses and individual businesses shall be taxable revenue and tax rates.
(1) Taxable revenue
Revenue subject to VAT and revenue subject to PIT earned by household businesses and individual businesses are revenue inclusive of tax (if subject to tax) from sale of goods, processing payment, commissions, payment for provision of services earned during the tax period from manufacture, sale of goods, provision of services, including bonuses, sales compensation, promotions, commercial discounts, payment discounts, assistance in cash or not in cash; subsidies, surcharges, extra fees to which they are entitled; compensations for breach of contract, other compensations (only included in revenue subject to PIT); other revenues earned by household and individual businesses whether they are collected in reality.
(2) Tax rates
- Tax rates include VAT rates and PIT rates which vary according to business lines as specified in Appendix I of Circular 40/2021/TT-BTC.
- A household business or individual business that does business in multiple business lines shall declare and calculate tax at the tax rates that apply to each business line.
In case a household business or individual business that fails to determine or correctly determine the taxable revenue earned from each business line, the tax authority shall impose the taxable revenue earned from each business lines in accordance with tax administration laws.
What are the rules and basis for calculation of tax payable by household businesses and individual businesses in Vietnam? (Image from the Internet)
What are the rules for calculation of tax payable by household businesses and individual businesses in Vietnam?
Household businesses, individual businesses that are residents having activities manufacture, sale of goods and services in any of the business lines and sectors prescribed by law.
Pursuant to the provisions of Article 4 of Circular 40/2021/TT-BTC, tax calculation rules include:
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.
Therefore, there are 02 rules for calculating tax payable:
- 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
- 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.
What are the requirements of the General Department of Taxation on the management of household businesses in Vietnam?
Pursuant to Section 2 of Official Dispatch 1357/TCT-DNNCN, the requirements of the General Department of Taxation on the management of household businesses are as follows:
- Review tax administration dossiers of household businesses (including those that are operating, suspended, evaded tax payment, etc.) within their jurisdiction; take prompt actions against failure to adhere to tax administration laws in regard to household businesses.
- Carry out inspection and review within their jurisdiction so as to acknowledge any change in business operation of household businesses and promptly place these household businesses under management.
- Cross-check against information of relevant authorities (Statistic authority, business registration authority, local government, etc.) to determine the number of household businesses in their jurisdiction, identify causes for any discrepancy, cross-examine data between government authorities, place these household businesses under management so that existing household businesses are not omitted during tax estimation.
- Upon examining and reviewing in their jurisdictions and cross-checking against information of other relevant authorities, where household businesses have been included for the purpose of tax estimation but are no longer operating in the area, tax authorities shall conform to applicable regulations and Point 3.6 Clause 3 Section II Part II of Tax administration procedures for household businesses under Decision No. 2371/QD-TCT dated December 18, 2015 of the General Director of General Department of Taxation.
- Provide business registration authorities with information on registered household businesses that no longer operate at registered address.
- Disclose information on household businesses paying presumptive tax as per the law and disclose on digital map of household businesses according to written direction of the Ministry of Finance and General Department of Taxation in a manner that the disclosure is transparent and enhances supervision capability of the general public, local authorities, and local government.
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