Regulations on tax administration of household businesses and individual businesses in Vietnam

Regulations on tax administration of household businesses and individual businesses in Vietnam (Internet image)

1. Tax administration of household businesses and individual businesses under periodic declarations in Vietnam

Tax administration of household businesses and individual businesses under periodic declarations in Vietnam according to Article 11 of Circular 40/2021/TT-BTC includes:

* Tax declaration dossier

- The tax form No. 01/CNKD enclosed with Circular 40/2021/TT-BTC;

Form No. 01/CNKD

- The declaration form No. 01-2/BK-HDKD enclosed with Circular 40/2021/TT-BTC (for household businesses and individual businesses paying tax under declarations).

Form No. 01-2/BK-HDKD

Form No. 01-2/BK-HDKD is not required if the household business or individual business is able to determine revenue as confirmed by a competent authority.

* Receiving authorities

Household businesses and individual businesses paying tax under periodic declarations as prescribed in Clause 1 Article 45 of the Law on Tax Administration shall submit tax declaration dossiers to their supervisory sub-department of taxation.

* Deadlines for submission of tax declaration dossiers

Household businesses and individual businesses paying tax under periodic declarations shall submit tax declaration dossiers by the deadlines specified in Clause 1 Article 44 of the Law on Tax Administration. To be specific:

- Household businesses and individual businesses paying tax under monthly periodic declarations shall submit their tax declaration dossiers by the 20th of the month succeeding the month in which tax is incurred.

- Household businesses and individual businesses paying tax under quarterly periodic declarations shall submit their tax declaration dossiers by the last day of the first month of the quarter succeeding the quarter in which tax is incurred.

* Tax payment deadlines

Household businesses and individual businesses paying tax under periodic declarations shall pay tax by the deadline specified in Clause 1 Article 55 of the Law on Tax Administration, which is the deadline for submission of the tax declaration dossier.

In case the tax declaration dossier has to be supplemented, tax shall be paid by the deadline for submission of the tax declaration dossier of the erroneous tax period.

* Tax declaration in case of business suspension

The household business or individual business that suspends their business operation shall notify the tax authority as prescribed in Article 91 of the Decree 01/2021/ND-CP, Article 4 of Decree 126/2020/ND-CP, Article 12 of Circular 105/2020/TT-BTC and is not required to submit the tax declaration dossier;

Unless tax is declared monthly and the suspension lasts less than a month, or tax is declared quarterly and the suspension lasts less than a quarter.

2. Tax administration of individual businesses paying tax under separate declarations in Vietnam

Tax administration of individual businesses paying tax under separate declarations in Vietnam according to Article 12 of Circular 40/2021/TT-BTC includes:

* Tax declaration dossier:

- The tax form No. 01/CNKD enclosed with Circular 40/2021/TT-BTC;

Form No. 01/CNKD

- The following documents:

+ Copy of the contract for provision of goods/services;

+ Copy of the contract finalization record;

+ Documents proving origins of goods such as:

++ Manifest of domestic farm products;

++ Manifest of traded goods of border residents for goods imported by border residents;

++ Invoices provided by sellers for imports purchased from domestic organizations and individuals;

++ Documents proving that the goods are manufactured by the individual business, etc.

The tax authority is entitled to request the taxpayer to present original copies for comparison with the copies.

* Receiving authorities

Individual businesses paying tax under separate declarations shall submit tax declaration dossiers to the authorities specified in Clause 1 Article 45 of the Law on Tax Administration. To be specific:

- The individual business that is a travelling trader shall submit tax declaration dossiers to the supervisory sub-department of taxation of the area where he/she does business.

- The individual business that earns income from provision of digital information products and/or services shall submit tax declaration dossiers to the supervisory sub-department of taxation of the area where his/her permanent or temporary residence is located.

- The individual that earns income from transferring Vietnam’s top-level domains “.vn” shall submit tax declaration dossiers to the supervisory sub-department of taxation of the area where his/her residence is located. In case the transferor is not a resident, tax declaration dossiers shall be submitted to the supervisory tax authority of the organization that manages the “.vn” domains.

- The individual business that is private construction contractor shall submit tax declaration dossiers to the supervisory sub-department of taxation of the area where construction site is located.

* Deadlines for submission of tax declaration dossiers

Individual businesses paying tax under separate declarations as prescribed in Clause 3 Article 44 of the Law on Tax Administration within 10 days from the day on which tax is incurred.

* Tax payment deadline:

Household businesses and individual businesses paying tax under separate declarations shall pay tax by the deadline specified in Clause 1 Article 55 of the Law on Tax Administration, which is the deadline for submission of the tax declaration dossier.

In case the tax declaration dossier has to be supplemented, tax shall be paid by the deadline for submission of the tax declaration dossier of the erroneous tax period.

Quoc Dat

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