Vietnam: What is the basis for determining fixed taxes for household businesses and individual businesses eligible for fixed tax payment?
- What is the basis for determining fixed taxes for household businesses and individual businesses eligible for fixed tax payment in Vietnam?
- Who is responsible for determining presumptive revenues and fixed taxes of household businesses and individual businesses in Vietnam?
- Can household businesses and individual businesses in Vietnam request to adjust their presumptive revenues and fixed taxes?
What is the basis for determining fixed taxes for household businesses and individual businesses eligible for fixed tax payment in Vietnam?
Pursuant to Clause 1, Article 13 of Circular 40/2021/TT-BTC stipulating as follows:
Tax administration of fixed taxpayers
1. Basis for determination of fixed tax:
a) The tax declaration dossier prepared by the taxpayer according to the revenue estimate and fixed tax of the tax year;
b) Database of the tax authority;
c) Opinions of the Tax Advisory Council of the commune;
d) Result of information disclosure and receipt of feedback from the Tax Advisory Council, the People’s Committee, the People’s Council, Fatherland Front of the commune, the taxpayer, other organizations and individuals.
Disclosure of information about the fixed tax payer means the tax authority disclosing information and receiving feedback about the revenue and fixed tax payable by the fixed taxpayer as per regulations. The first information disclosure mentioned in Clause 5 of this Article is meant to seek opinions about the revenue and estimated fixed tax; the second information disclosure mentioned in Clause 9 of this Article is meant to seek opinions about the revenue and official fixed tax payable in the tax year. The enquiry can be posted at the tax authority, sent to the taxpayer, sent to the People’s Committee, the People’s Council, Fatherland Front of the commune; posted on the website of tax authorities.
Accordingly, the basis for determining fixed taxes for fixed taxpayers includes:
- The tax declaration dossier prepared by the taxpayer according to the revenue estimate and fixed tax of the tax year;
- Database of the tax authority;
- Opinions of the Tax Advisory Council of the commune;
- Result of information disclosure and receipt of feedback from the Tax Advisory Council, the People’s Committee, the People’s Council, Fatherland Front of the commune, the taxpayer, other organizations and individuals.
Who is responsible for determining presumptive revenues and fixed taxes of household businesses and individual businesses in Vietnam?
Pursuant to Point a, Clause 4, Article 13 of Circular 40/2021/TT-BTC stipulating as follows:
Tax administration of fixed tax payers
...
4. Determination of presumptive revenue and fixed tax
a) Determination of presumptive revenue and fixed tax
a.1) Presumptive revenue and fixed tax shall be determined by calendar year or month in case of seasonal business that is stable throughout a year.
a.2) The fixed tax payer shall determine the presumptive revenue themselves using tax form No. 01/CNKD enclosed herewith. In case the fixed taxpayer fails to determine the fixed tax, submit the tax declaration dossier or the fixed tax is not reasonable, the tax authority shall impose the presumptive revenue and fixed tax in accordance with Article 51 of the Law on Tax Administration.
a.3) The tax declaration dossier submitted by the fixed tax payer, the tax authority’s database shall be the basis for public survey, seeking opinions from the Tax Advisory Council, and for the Provincial Department of Taxation to review tax books at the sub-department of taxation.
Accordingly, the fixed taxpayer shall determine the presumptive revenue themselves. In case the fixed taxpayer fails to determine the fixed tax, submit the tax declaration dossier or the fixed tax is not reasonable, the tax authority shall impose the presumptive revenue and fixed tax.
Can household businesses and individual businesses in Vietnam request to adjust their presumptive revenues and fixed taxes?
Pursuant to Point b, Clause 4, Article 13 of Circular 40/2021/TT-BTC, in case the fixed tax payer wishes to adjust the presumptive revenue and fixed tax due to changes in business operation, the tax authority shall adjust the fixed tax from the day on which the change occurs in the following cases:
- The fixed tax payer that changes the business scale (business area, employees, revenue) shall revise the tax declaration form. If the presumptive revenue varies by 50% or over, the tax authority shall issue a notice of change in fixed tax from the day on which the change occurs.
If the tax authority determines that the taxpayer does not satisfy the conditions for changing the fixed tax, the tax authority shall issue the notice of retention of fixed tax.
- The fixed tax payer that changes their business location shall apply for change of taxpayer registration information as per regulations and declare tax at the new location as a new fixed tax payer. The tax authority shall carry on procedures according to the application for change of taxpayer registration information.
The supervisory tax authority of the taxpayer’s new location shall handle the tax declaration dossier as that of a new business. The supervisory tax authority of the taxpayer’s old location shall issue a notice of change in fixed tax from the day on which the change occurs.
- The fixed tax payer that changes their business lines (even if tax rates are not changed) shall follow the procedures for change of tax registration information (if business lines are changed) and revise the tax declaration form. The tax authority shall issue a notice of change in fixed tax from the day on which the change occurs.
- The fixed tax payer that shuts down or suspends business operation shall submit a notification. On the basis of the notification submitted by the fixed tax payer or the competent authority, the tax authority shall adjust the fixed taxes.
- In case the taxpayer shuts down or suspends business operation at the request of a competent authority, the tax authority shall adjust the fixed tax according to the written request for shutdown or suspension issued by the competent authority.
- The fixed tax payer that switches to paying tax under periodic declarations shall revise the tax declaration form. The tax authority shall adjust the fixed tax according to the revised tax declaration form.
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