If you don't register your business, you still have to pay taxes?
Households and individuals must register when doing business, except for some cases such as street vendors, and seasonal businesses. At the same time, business households and individuals should also note that even without business registration, they still have to pay tax if their turnover reaches the prescribed level.
If you don't register your business, do you still have to pay tax?
If you don't register your business, you still have to pay tax.
This regulation is clearly stated in Circular 40/2021/TT-BTC, specifically:
🔰 Taxpayers (objects to apply)
Article 2 of Circular 40/2021/TT-BTC clearly stipulates that value-added tax and personal income taxpayers include:
1️⃣ Business household, the business individual is a resident individual engaged in the production and trading of goods and services in all fields and lines of production and business in accordance with the provisions of law, including some of the following:
▪️ Practicing independently in the fields and professions for which a license or practice certificate is granted in accordance with law;
▪️ Activity of agents to sell at the right price for lottery agents, insurance agents, multi-level sales agents of individuals who directly sign contracts with lottery enterprises, insurance enterprises, and multi-level sale enterprises ;
▪️ Business cooperation with the organization;
▪️ Agricultural production and business, forestry, salt making, aquaculture, and fishing do not satisfy the conditions for tax exemption under the provisions of the law on VAT and PIT;
▪️ E-commerce activities, including the case of individuals earning income from digital information content products and services in accordance with the law on e-commerce.
2️⃣ Business households and individuals engaged in production and business activities at border markets, border-gate markets or markets in border-gate economic zones in the Vietnamese territory;
3️⃣ Individuals leasing properties;
4️⃣ Individuals transferring the Vietnamese national internet domain name “.vn”;
5️⃣ Organization of business cooperation with individuals;
6️⃣ Organizations and individuals declare tax on behalf of individuals, pay taxes on behalf of individuals;
7️⃣ Lottery enterprises, insurance enterprises, and multi-level sales enterprises pay incomes to individuals who directly sign agency contracts to sell at the correct prices for a lottery, insurance, and multi-level sales.
🔰 Amount of revenue subject to tax
🔅 Clause 2, Article 4 of Circular 40/2021/TT-BTC stipulates that business households and individuals with turnover from production and business activities in a calendar year of VND 100 million or less are not eligible to pay value-added tax and personal income tax.
🔅 In other words, business households and individuals with a turnover in the calendar year of over VND 100 million must pay value-added tax and personal income tax.
🔅 At the same time, Clause 3, Article 4 of this Circular also clearly states that business households and individuals doing business in the form of groups of individuals or households must have a turnover of 100 million VND/year or less to determine that individuals do not have to pay taxes. The tax is determined for 01 sole representatives of a group of individuals or households in the tax year.
🔅 That is, the revenue to determine the tax payment obligation is not divided on average by the number of members but determined for 01 representatives of the group of individuals or households.
🔅 In short, business households and individuals that have a turnover in a calendar year of over VND 100 million must pay value-added tax and personal income tax as prescribed, regardless of whether or not there is a business registration.
⇒ If you have any questions, please register here for TASCO's earliest advice or contact hotline: 0975480868 (Zalo)
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