From January 01, 08, Circular No. 40 / 2021 / TT-BTC issued by the Ministry of Finance has officially come into effect, marking an important turning point in the management of tax declarations for business households and individual businesses. Below are instructions on how to calculate taxes and tax rates applicable to business households and individual businesses.
1. When do businesses need to declare taxes?
As prescribed at Circular No. 40 / 2021 / TT-BTC, business households need to declare taxes in the following cases:
- Large scale business: Business households with revenue or number of employees meeting the highest level of micro-enterprise criteria or higher, specifically:
- In the fields of agriculture, forestry, fishery, industry, and construction: the average number of employees participating in social insurance per year is 10 or more or the total revenue of the previous year is 3 billion VND or more.
- In the field of trade and services: the average number of employees participating in social insurance per year is 10 people or more or the total revenue of the previous year is 10 billion VND or more.
- Business households voluntarily choose the declaration methodi: Business households that have not yet reached a large scale but choose to pay taxes by declaration method instead of lump-sum method.
2. Tax declaration documents
Tax declaration documents for business households paying tax by declaration method include:
- Tax declaration for business households and business individuals according to form No. 01/CNKD issued with Circular No. 40 / 2021 / TT-BTC;
- Appendix PL List of business activities during the period of business households and individual businesses, form number 01-2/BK-HDKD
- In case business households and business individuals pay taxes according to the declaration method, if there is a basis to determine revenue according to confirmation from competent authorities, they do not have to submit the Appendix of Form No. 01-2/BK-HDKD issued with this Circular.
3. How to declare tax for business households paying tax according to declaration
Business households paying tax according to the declaration method shall declare tax according to the following steps:
- Determine taxable revenue: Revenue subject to VAT and personal income tax includes all sales, processing fees, commissions, and service provision fees arising during the period, including bonuses, support, and compensation.
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Apply tax rate: The installation process of VAT and personal income tax rates by business line are specified in Appendix I of Circular 40/2021/TT-BTC.
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Calculate tax payable:
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VAT payable = VAT taxable revenue × VAT rate.
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Personal income tax payable = Taxable revenue × Personal income tax rate.
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- Fill out tax return: Fill out the forms as instructed above.
- File tax return: Submit online (eTax system) or directly at the Tax Department.
Note:
- In case a business household operates in many fields and industries, the business household and individual business shall declare and calculate tax according to the tax rate calculated on revenue applicable to the business. each field, profession.
- In case a business household cannot determine the taxable revenue of each field or industry or the determination is inconsistent with the actual business, the tax authority shall implement determining taxable revenue for each field and industry according to the provisions of the law on tax administration.
- If a business household pays tax according to the declaration method and determines that the taxable revenue is inconsistent with reality, the tax authority shall take action. taxable revenue determination as prescribed in Article 50 of the Law on Tax Administration.
You can try calculating your Sole Proprietorship Tax liability using the following Sole Proprietorship Tax liability calculator:
4. Deadline for filing tax returns and paying taxes
- The deadline for submitting tax declarations for households declaring by month is 20th of next month month of tax liability.
- The deadline for submitting tax declarations for households declaring quarterly is last day of the first month of the next quarter adjacent quarter in which tax liability arises.
- The deadline for tax payment of the declaring household is no later than the last day of the tax return filing deadlineIf additional tax declaration is required, the tax payment deadline is the deadline for submitting the tax declaration for the tax period with errors.
5. How should business households that pay taxes by declaration method implement accounting, invoice and voucher regimes?
According to Article 5, Clause 4 of Circular 40/2021/TT-BTC, business households paying taxes by declaration method must comply with the following regulations on accounting, invoices and documents:
- Accounting mode: Business households must implement the accounting regime according to the provisions of Accounting regime for business households and individual businesses as prescribed in Circular 88/2021/TT-BTC, including recording business transactions, keeping accounting books to track revenue, expenses and taxes payable.
- Invoices, documents:
- Legal invoices (electronic invoices or invoices issued by tax authorities) must be used to record revenue.
- Keep complete invoices, vouchers, contracts and related documents to prove the legality of goods and services.
- Present invoices and documents when requested by tax authorities for inspection.
- Special cases: In case a business household or individual conducts business in a field or industry with a basis for determining revenue as confirmed by a competent authority, it is not required to implement the accounting regime, but it is still required to implement the invoice and voucher regime.
6. Instructions for declaring business tax online
Filing taxes online is the recommended method to save time and ensure accuracy. Below is a step-by-step guide for businesses to file taxes via the eTax system:
- Register for an eTax account:
- Visit website https://thuedientu.gdt.gov.vn.
- Register an account using your business tax code.
- Download and install support software:
- Download iTaxViewer software to read and electronically sign tax returns.
- Install digital signature (provided by units such as Viettel-CA, FPT-CA) to sign and submit the declaration.
- Prepare electronic declaration:
- Download form 01/CNKD and appendix 01-2/BK-HĐKD (if needed) from the eTax system
- Fill in information about revenue, tax rate, tax payable.
- Submitting declaration via eTax:
- Log in to the eTax system.
- Upload the completed and electronically signed declaration file.
- Click the “Submit declaration” button and check the submission status on the system.
- Pay taxes:
- After submitting the declaration, the system will send a notice of the tax payable.
- Pay taxes via bank or electronic payment gateway linked to eTax.
- Information storage:
- Save soft copies of the declaration and related documents on your computer or hard drive.
- Print hard copies (if needed) to store with invoices and documents.
Note: Business households need to check email or notifications on eTax to update the status of tax declarations and tax notices from the tax authority.
7. Do business households that pay taxes according to declarations have to make tax settlements like enterprises?
Pursuant to Article 5, Clause 5 of Circular 40/2021/TT-BTC, Business households paying tax by declaration method do not have to make tax finalization as a business. This means:
- Business households do not need to prepare year-end tax settlement reports to determine the amount of VAT and personal income tax payable.
- However, business households still have to declare taxes fully periodically (monthly or quarterly) and pay taxes on time.
- If the tax authority checks and discovers errors, the business household must make additional declarations and pay additional taxes (if any) according to regulations.
Conclude
Tax declaration by declaration method requires business households to strictly comply with regulations on accounting, invoices, documents and tax payment deadlines. If you need further assistance, please contact EXPERTIS for detailed instructions.
