When is a taxpayer not required to declare tax? What are the rules for tax declaration and tax calculation in Vietnam?
When is a taxpayer not required to declare tax in Vietnam?
Pursuant to Clause 3, Article 7 of Decree 126/2020/ND-CP (supplemented by Clause 2, Article 1 of Decree 91/2022/ND-CP), the following content is stipulated:
Tax declaration dossier
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3. A taxpayer is not required to declare tax in the following cases:
a) The taxpayer only has business operations that are not subject to any tax.
b) The taxpayer is an individual earning tax-free income as prescribed by personal income tax laws and Point b Clause 2 Article 79 of the Law on Tax administration, except individuals that receive real estate as inheritance or gift and individuals that transfer real estate.
c) An enterprise that only exports is not required to declare VAT.
d) The taxpayer’s business suspension is suspended as prescribed in Article 4 of this Decree.
dd) The taxpayer applies for TIN invalidation, except termination of business operation, contract or business rearrangement prescribed in Clause 4 Article 44 of the Law on Tax administration.
e) The declarant of personal income tax is the income payer, declares personal income tax monthly or quarterly, and does not deduct personal income tax in the same month or quarter
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Accordingly, cases where a taxpayer is not required to declare tax include:
- The taxpayer only has business operations that are not subject to any tax.
- The taxpayer is an individual earning tax-free income as prescribed by personal income tax laws and Point b Clause 2 Article 79 of the Law on Tax administration, except individuals that receive real estate as inheritance or gift and individuals that transfer real estate.
- An enterprise that only exports is not required to declare VAT.
- The taxpayer’s business suspension is suspended as prescribed in Article 4 of Decree 126/2020/ND-CP.
- The taxpayer applies for TIN invalidation, except termination of business operation, contract or business rearrangement prescribed in Clause 4 Article 44 of the Law on Tax administration 2019.
- The declarant of personal income tax is the income payer, declares personal income tax monthly or quarterly, and does not deduct personal income tax in the same month or quarter
When is a taxpayer not required to declare tax? What are the rules for tax declaration and tax calculation in Vietnam?
What are the rules for tax declaration and tax calculation in Vietnam?
Pursuant to Article 42 of the Law on Tax administration 2019, it stipulates the rules for tax declaration and tax calculation as follows:
- Taxpayers shall fully and accurately provide information on the tax return provided by the Minister of Finance and submit adequate documents to the tax authority.
- Taxpayers shall calculate the tax payable themselves, except for the cases in which tax has to be calculated by the tax authority as specified by the Government.
- Taxpayers shall declare tax at the local tax authority in charge of the area in which their headquarters are based. A taxpayer that does accounting mainly at the headquarters and has dependant units in other provinces shall declare tax in the province in which the headquarters are based and distribute tax incurred in each province. The Minister of Finance shall elaborate this Clause.
- Regarding electronic commerce, digital business and other services provided by overseas providers without permanent establishments in Vietnam, the overseas providers shall directly or authorize representatives to apply for taxpayer registration, declare and pay tax in Vietnam in accordance with regulations of the Minister of Finance.
- Rules for declaring and calculating taxable prices in related-party transactions:
+ Values of related-party transactions shall be determined and declared by analyzing and comparing with independent transactions, the nature of operation and nature of the transaction, in order to determine tax liability in the same manner as that of transactions between independent parties;
+ Values of related-party transactions shall be adjusted according to independent transactions to declare tax in order that in taxable income is not decreased;
+ Taxpayers whose businesses are small in scale and pose low tax risk are exempt from compliance to provisions of Point a and Point b of this Clause and may apply simplified related-party transaction declaration procedures.
- Rules for declaring tax with predetermined taxable price calculation method:
+ Predetermined taxable price calculation methods shall be applied on the basis of request of the taxpayers, consensus between the tax authorities and the taxpayer under unilateral, bilateral and multilateral agreements between tax authorities, taxpayers and tax authorities of relevant countries or territories;
+ Predetermined taxable price calculation methods shall be applied according to information provided by the taxpayers and legally verified commercial database;
+ Application of predetermined taxable price calculation methods is subject to approval by the Minister of Finance. Regulations of law on international treaties and international agreements shall apply to bilateral and multilateral agreements participated in by foreign tax authorities.
When is the deadline for submitting tax declaration documents in Vietnam?
Pursuant to the provisions of Article 44 of the Law on Tax administration 2019 and Article 86 of Circular 80/2021/TT-BTC, the deadline for submitting tax declaration documents is as follows:
(1) Deadlines for submission of tax declaration dossiers of taxes declared monthly and quarterly:
- For taxes declared monthly: the 20th of the month succeeding the month in which tax is incurred;
- For taxes declared quarterly: the last day of the first month of the succeeding quarter.
(2) For taxes declared annually:
- For annual tax statement dossiers: the last day of the 3rd month from the end of the calendar year or fiscal year. For annual tax declaration dossiers: the last day of the first month from the end of the calendar year or fiscal year
- For annual personal income tax statements prepared by income earners: the last day of the 4th month from the end of the calendar year;
- For presumptive tax declarations prepared by household businesses and individual businesses: the 15th of December of the preceding year. For new household businesses and individual businesses: within 10 days from the date of commencement of the business.
(3) For declaration of taxes that are declared and paid upon incurrence: the 10th day from the day on which tax is incurred.
(4) For tax declaration dossiers upon shutdown, contract termination, business conversion or business re-arrangement: the 45th day from the occurrence of the event.
(5) The Government shall specify the deadlines for submission of statements of farming land levies, non-farming land levies; land levies; land rents, water surface rents; mineral extraction licensing fee; water resource extraction licensing fee; registration fee; licensing fees; other amounts payable to state budget in accordance with regulations of law on management and use of public property; multinational profit reports.
Note: In case a taxpayer declares tax electronically on the last day of the time limit for declaration and the information portal of the tax authority is not functional, the taxpayer may submits the electronic declaration on the next day after the online portal is functional again.
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