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In the process of production and business, households and individuals must pay taxes and charges in accordance with law provisions. Payable charges and taxes include personal income tax, valued added tax, and business license tax.
Personal income tax and value-added tax
* Business households and business individuals that generate a turnover of up to VND 100 million from production and business activities in a calendar year
This content is prescribed in Clause 2, Article 4 of Circular No. 40/2021/TT-BTC as follows:
“2. Business households and business individuals that generate a turnover of up to VND 100 million from production and business activities in a calendar year will be exempt from VAT and PIT in accordance with the laws on VAT and PIT. Business households and business individuals shall make accurate, truthful and adequate tax declarations and submit their tax dossiers within a law-specified time limit, and take responsibility before law for the accuracy, truthfulness and adequacy of their tax dossiers under regulations.
* Tax calculation method for business households and business individuals
Business households and business individuals shall apply different tax calculation methods for personal income tax and valued added tax,
(1) Tax calculation method for business households and business individuals paying taxes by the declaration method
The declaration method is applicable to:
- Large-scale business households and business individuals mean a business household or business individual that has a turnover and labor scale at least satisfying the highest turnover and labor criteria applicable to micro-enterprises, specifically:
+ Business households or business individuals engaged in agriculture, forestry, fisheries, or industry construction each having an annual average number of at least 10 employees participating in social insurance or a total turnover of at least VND 3 billion in the preceding year;
+ Business households or business individuals engaged in commerce or service provision each having an annual average number of at least 10 employees participating in social insurance or a total turnover of at least VND 10 billion in the preceding year.
- Business households and business individuals not yet satisfying the criteria for large-scale business but choosing to pay taxes by the declaration method.
(2) Method of tax declaration upon turnover generation
This means a method of tax declaration and calculation based on a percentage of actual turnover generated each time
(3) Business households and business individuals paying taxes by the presumption method
Those failing to implement or inadequately implementing accounting, invoice, and document regimes, unless business households and business individuals pay taxes by the declaration method and business individuals pay taxes upon turnover generation.
Business license fee (business license tax)
* Business license fee rates for individuals and households
Pursuant to Clause 2, Article 4, Decree No. 139/2016/ND-CP and Clause 3, Article 1, Circular No. 65/2020/TT-BTC, the business license fee rates for individuals and households engaged in goods production and service provision activities as follows:
No. | Turnover | Rate |
1 | Over VND 500 million/year | VND 01 million/year |
2 | Over VND 300 to VND 500 million/year | VND 500,000/year |
3 | Over VND 100 to VND 300 million/year | VND 300,000/year |
Turnover serves as a basis for determining business license fees for individuals, groups of individuals, households and business locations newly launched by business households are prescribed as follows:
- Turnover serving as a basis for determining business license fees for individuals, groups of individuals, and households (except for persons providing property lease services) shall be the total turnover used to calculate personal income tax in the preceding year of the production and business activities (excluding property lease activities) of business locations under the Circular No. 92/2015/TT-BTC.
For individuals, groups of individuals, and households that have dissolved, suspended their production and business, then resume their business and could not determine the turnover of the preceding year, the turnover serving as a basis for determining business license fees shall be the turnover of a production and business facility of the same scale and business line in the same area in accordance with the Circular No. 92/2015/TT-BTC.
- Turnover serving as a basis for determining business license fees for individuals providing property lease services shall be the turnover used to calculate personal income tax of property lease contracts of the taxable year.
In case an individual has many property lease contracts in one location, turnover serving as a basis for determining business license fees for such location shall be the total turnover from property lease contracts of the taxable year.
* The deadline for business license tax 2023
Pursuant to Clause 9, Article 18, Decree No. 126/2020/ND-CP, The deadline for license fee payment is January 30, 2023.
Besides, it is necessary to pay attention to some cases, in particular:
- For small- and medium-sized enterprises transformed from business households (including also their subsidiaries and business locations), upon the expiration of the license fee grace period (the fourth year from the year of establishment):
+ In case the license fee grace period expires in the first half of a year, the deadline for license fee payment is July 30 of that year.
+ In case the license fee grace period expires in the second half of a year, the deadline for license fee payment is January 30 of the year following that year.
- For business households and business individuals that have terminated their production or business operations but later resume such operations:
+ In case they resume their operations in the first half of a year: The deadline for license fee payment is July 30 of that year.
+ In case they resume their operations in the second half of a year: The deadline for license fee payment is January 30 of the year following that year.
Here are the payable taxes and charges that business households and individuals must pay in 2023.
