Taxes that business households must pay after establishment
What taxes do business households need to pay after establishment? How do determine and calculate taxes? This article will help entrepreneurs answer the questions mentioned above.
1. Taxes payable by business households after establishment:
1.1. License tax:
️⛳ Pursuant to Decree No. 139/2016/ND-CP, Decree No. 22/2020/ND-CP, and Circular No. 65/2020/TT-BTC, the license fee rate for business households is calculated based on: average annual revenue. As follows:
➤ Business households paying tax according to the presumptive method will be exempted from license fees, including:
➥ Having a turnover of 100 million VND/year or less.
➥ Operating irregularly or without a fixed business location.
➥ Production and business activities for the first time.
➥ Households doing business in salt production, aquaculture, fishing, and fishery logistics.
➤ Revenue over 500 million VND/year
➤ Revenue from 300 to 500 million VND/year
➤ Revenue from 100 to 300 million VND/year
️⛳ Note:
✔ Business households established after February 25, 2020, will be exempted from license fees for the first year.
✔ After being granted a business license, an enterprise must submit a license fee declaration to the tax agency directly managing it - this is an important post-establishment legal procedure that a business must perform.
1.2. Presumptive tax:
🔰 Flat tax is a fixed monthly/quarterly tax payable by individual business households; The flat tax rate is set by the tax authority based on the declared information/actual revenue from business activities.
🔰 Value added tax (VAT) and personal income tax (PIT) of business households are calculated by the presumptive method.
🔰 How to calculate presumptive tax:
⏩ If the business household has a taxable turnover of 100 million/year or less, it is not required to pay VAT and PIT.
⏩ Cases, where individuals pay a flat tax for less than a full year (not full 12 months in a calendar year), include: individuals who have just started doing business; individuals doing regular business on a seasonal basis; If an individual stops/retires from business, the turnover of 100 million VND/year or less to determine that the individual is not required to pay VAT, is not required to pay PIT is the revenue subject to personal income tax of the company of a year (12 months);
⏩ The actual taxable turnover to determine the payable tax amount in the year is the turnover corresponding to the actual number of months of business.
⏩ In case the flat tax payer has been notified by the tax authority of the flat tax payable, if the business does not run for the entire year, the individual shall be entitled to a reduction in the flat tax payable corresponding to the number of months of business cessation/discontinuation in the year.
⏩ The basis for tax calculation for individuals and business households that pay flat tax is the taxable turnover and the tax rate calculated on the turnover.
🔰 Tax formula:
Amount of VAT payable = VAT taxable revenue x VAT rate
Amount of VAT payable = PIT taxable revenue x PIT rate
🔰 In there:
✔ Revenue subject to VAT and revenue subject to PIT is the tax-inclusive revenue (in cases where it is taxable) of all sales, processing, commissions, and service provision arising in the tax period from the production and trading of goods and services, including:
• Bonuses to support sales, trade discounts, payment discounts, promotions, cash or non-cash support;
• Subsidies, extras, surcharges, and additional fees are entitled to according to regulations;
• Compensations due to customer's breach of contract and other compensations (only included in PIT taxable revenue);
• Other revenues are enjoyed whether money has been collected or not.
• In case the business individual cannot determine the flat taxable turnover or is determined to be inconsistent with reality, the tax authority has the authority to determine the flat taxable revenue according to the provisions of the law on tax administration.
✔ The percentage of tax calculated on turnover includes the rate of VAT and the rate of PIT applicable to each field of business. In case a business household registers in many fields and lines of business, the householder shall declare and calculate tax at the rate of tax calculated on turnover applicable to each field or business as follows:
|
Fields |
VAT rate |
PIT rate |
|
Trade, sell goods |
1% |
0.5% |
|
Services, construction excluding materials |
5% |
2% |
|
Production, services associated with goods, transportation, construction with raw materials procurement |
3% |
1.5% |
|
Services and production of products are subject to VAT at the rate of 5% according to the deduction method and other fields not in the groups above. |
2% |
1% |
2. Deadline for submitting tax dossiers and declaring tax:
2.1. For tax returns:
✔ The deadline for filing tax returns for business households paying tax by the monthly declaration method is the 20th day of the month following the month in which the tax liability arises.
✔ The deadline for submitting tax declaration dossiers for business households paying tax by the quarterly declaration method is the last day of the first month of the next quarter adjacent to the quarter in which the tax liability arises.
2.2. For tax payment:
✔ The deadline for tax payment is the last day of the tax return filing deadline.
✔ In case of additional declaration of tax return, the tax payment deadline is the deadline for submitting the tax return of the tax period with errors or omissions.
✔ In case the business household temporarily suspends its operation or business, it shall notify the tax authority according to the provisions of Article 91 of Decree No. 01/2021/ND-CP, Article 4 of Decree No. 126/2020/ND-CP, Article 12 of Circular No. 105/2020/TT-BTC providing guidance on tax registration and not having to submit tax declaration dossiers, except for cases where the business household suspends operations or does not do business for a full month if you declare tax on a monthly basis or suspend operations or do not do business for the whole quarter if you declare tax on a quarterly basis.
⇒ Register here for TASCO's earliest advice or contact hotline: 0975480868 (Zalo)
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