Do newly established businesses declare personal income tax monthly or quarterly in Vietnam?

Do newly established businesses declare personal income tax monthly or quarterly in Vietnam?

At Point a, Clause 1, Article 8 of Decree 126/2020/ND-CP stipulates as follows:

1. The following taxes AND other amounts collected by tax authorities have to be declared monthly:

a) Value-added tax (VAT), personal income tax. Taxpayers who satisfy the requirements specified in Article 9 of this Decree may declare these taxes quarterly.

b) Excise duty.

c) Environment protection tax.

d) Resource royalty, except that specified in Point e of this Clause.

dd) Fees and charges payable to state budget (except those collected by diplomatic missions of Vietnam as prescribed in Article 12 of this Decree; customs fees, goods, luggage and vehicle transit charges).

e) For extraction and sale of natural gas: resource royalty; corporate income tax; special tax of Vietsovpetro JV in block 09.1of Vietnam - Russia Agreement dated December 27, 2010 on cooperation in geological survey and petroleum extraction in the continental shelves of the Socialist Republic of Vietnam by Vietsovpetro JV; profit on natural gas received by the host country.

In addition, Point a, Point b, Clause 1, Article 9 of Decree 126/2020/ND-CP stipulates as follows:

1. Conditions for quarterly declaration

a) The following taxpayers may declare VAT quarterly:

a.1) Any taxpayer that declares VAT monthly as prescribed in Point a Clause 1 Article 8 of this Decree and has a total revenue from sale of goods and services in the previous year of up to 50 billion VND. The total revenue shall be determined according to the VAT returns during the calendar year.

In case the taxpayer declares tax for all dependent units and business locations at the headquarters, the total revenue shall also include that of the dependent units and business locations.

a.2) The taxpayer’s business is recently inaugurated. From the calendar year succeeding the first 12 months, the revenue generated in the preceding calendar year (full 12 months) shall be the basis for deciding whether the taxpayer has to declare tax monthly or quarterly.

b) Quarterly declaration of personal income tax:

b.1) A taxpayer who has to declare personal income tax monthly as prescribed in Point a Clause 1 Article 8 of this Decree may declare personal income tax quarterly if all requirements for quarterly declaration are fulfilled.

b.2) Quarterly declaration shall be applied from the first month in which tax is incurred and remain unchanged throughout the calendar year.

According to this Article, personal income tax will be declared monthly or when the total revenue from selling goods and providing services in the preceding year is up to 50 billion VND, value-added tax will be declared quarterly in Vietnam. 

Compared to the case of your company, personal income tax will be declared on a monthly basis and if you are eligible to declare value added tax quarterly, you can choose to file quarterly personal income tax in Vietnam. 

Quarterly declaration shall be applied from the first month in which tax is incurred and remain unchanged throughout the calendar year in Vietnam.

If tax declaration dossier submitted to the tax authority is erroneous, can supplementary documents be provided in Vietnam?

According to Clause 1, Article 47 of the Law on Tax Administration 2019, the following provisions are made:

1. In case the tax declaration dossier submitted to the tax authority is erroneous or inadequate, supplementary documents may be provided within 10 years from the deadline for submission of the erroneous or inadequate tax declaration dossier but before the tax authority or a competent authority announces a decision on tax document examination.

With this provision in Vietnam, when detecting that the tax declaration dossier submitted to the tax authority is erroneous or inadequate, the taxpayer may provide supplementary documents within 10 years from the deadline for submission of the erroneous or inadequate tax declaration dossier but before the tax authority or a competent authority announces a decision on tax document examination.

Do enterprise that only exports be required to declare VAT 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 stipulates as follows:

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.

Thus, an enterprise that only exports does not need to carry out procedures and submit VAT declaration dossiers in Vietnam.

Best Regards!