Calculation of Personal Income Tax and Value Added Tax When Trading Clothes
Based on the provisions of Article 1 of Circular 92/2015/TT-BTC, individuals engaged in trading activities with an income exceeding VND 100 million per year are required to pay value-added tax and personal income tax from business activities.
The tax calculation for your business activities will be applied according to the provisions of Article 2 of Circular 92/2015/TT-BTC. To be specific:
- Tax calculation method: Lump-sum method;
- Basis for tax calculation: is taxable revenue and the tax rate based on revenue. Specifically:
+ Value-added tax (VAT) revenue and personal income tax (PIT) revenue are taxable revenues including tax from the total sales proceeds (VND 120 million).
+ The tax rate on revenue applicable to the distribution and supply of goods: the VAT rate is 1%; the PIT rate is 0.5%.
Determining the payable tax amount:
| Payable VAT amount | = | Taxable VAT revenue | x | VAT rate (1%) |
| Payable PIT amount | = | Taxable PIT revenue | x | PIT rate (0.5%) |
According to this regulation, if the taxable revenue from your clothing business is VND 120 million, then the total tax you must pay is: VND 120 million x 1% + VND 120 million x 0.5% = VND 1.2 million + VND 600,000 = VND 1.8 million.
Sincerely!
