Tax filing is an obligation of businesses, organizations, and individuals to the state. Depending on the revenue situation of each business or organization, the method and period of tax filing will vary. Businesses need to determine the correct filing time to ensure compliance and avoid penalties from the tax authorities.
This article will provide comprehensive information to help your business accurately determine its tax filing period.
1. How to determine the VAT tax filing period
Taxpayers are responsible for determining whether their organization or business is subject to monthly or quarterly tax filing. Therefore, Circular 151/2014/TT-BTC, issued on October 10, 2014, stipulates how to determine the tax filing period, helping businesses correctly identify and comply with the regulations.
1.1. Determining the quarterly VAT filing period
Quarterly VAT declarations are applicable to cases that meet the conditions for quarterly tax declaration as stipulated in point b, Article 15 of Circular 151/2014/TT-BTC as follows:
- Businesses with total revenue from the sale of goods and services in the preceding year of 50 billion VND or less.
- Newly established businesses: After a business has been operating for 12 months, from the following year onwards, the VAT declaration will be based on the revenue from the sale of goods and services of the immediately preceding year (12 months of operation).
1.2. Determining the monthly VAT filing period
According to regulations, the following entities are not eligible for monthly VAT tax filing:
- Taxpayers, organizations, and businesses are subject to quarterly VAT tax declarations.
- Businesses engaged in construction, real estate transfers outside the province, and itinerant installation and sales must declare provisional VAT on each transaction.
- This applies to cases where VAT is declared on a transaction-by-transaction basis for VAT calculated using the direct deduction method on sales revenue for infrequent business operators.
In summary, if the taxpayer's total revenue in the preceding year exceeds 50 billion VND, the VAT taxpayer must file tax returns monthly.
2. How to determine the personal income tax filing period.
2.1. Determining the quarterly personal income tax filing period.
For businesses eligible to file VAT returns quarterly, personal income tax returns should also be filed quarterly. From the first quarter in which the tax filing obligation arises, the business will need to determine which tax category it falls under. Once determined, quarterly tax filing will remain consistent throughout that calendar year.
2.2. Determining the monthly personal income tax filing period.
If a business files its VAT return monthly, the taxpayer will also file their personal income tax return monthly. Additionally, if an organization or individual is not subject to VAT filing requirements, they will file their personal income tax return monthly.
In summary, it can be understood as follows:
- Taxpayers must file personal income tax returns quarterly if their business files VAT returns quarterly.
- Individuals who file personal income tax returns monthly are required to do so if their business files VAT returns monthly.
3. How to determine the corporate income tax filing period
For corporate income tax, there is no monthly tax settlement period; only annual tax settlement and quarterly provisional tax calculations are available. From the fourth quarter of 2014, businesses only need to calculate the amount of tax payable and pay it; they no longer need to file quarterly provisional corporate income tax returns. There are two cases for filing corporate income tax returns:
- For businesses required to prepare quarterly financial statements: The amount of corporate income tax provisionally payable for the quarter will be determined in the quarterly financial statement and according to tax laws and regulations.
- Businesses that are not required to prepare quarterly financial statements will determine the amount of corporate income tax to be provisionally paid based on their quarterly business results and the tax regulations of the law.
To accurately determine the tax filing period, businesses need to determine the revenue from the sale of goods and services in the immediately preceding year, specifically as follows:
1. Revenue is calculated as the total revenue shown on the VAT tax returns for all tax periods within the calendar year (including both VAT-taxable and non-VAT-taxable revenue).
2. From December 5, 2020, taxpayers who file tax returns centrally at their head office for all their subsidiaries (business locations, branches) will have their revenue calculated to include both the head office's and the subsidiaries' revenue.
4. Instructions for changing tax filing periods
Whether tax filing is done quarterly or monthly, the VAT and personal income tax filing periods remain stable throughout the calendar year and follow a 3-year cycle. Within this stable quarterly or monthly filing cycle, if the taxpayer discovers, or if an audit or inspection by the tax authorities concludes, that they need to change their tax filing to monthly or are eligible for quarterly filing, they can switch to the appropriate filing period.
4.1. Changing the tax filing period from monthly to quarterly.
Taxpayers who are eligible to file quarterly tax returns during that stable period may choose to file monthly or quarterly tax returns from the year immediately following the year of discovery until the end of the stable period.
When there is a need to switch to quarterly tax filing, taxpayers must prepare a request form (according to Appendix I issued with Decree 126/2020/ND-CP) to request a change in the tax period from monthly to quarterly to the directly managing tax authority. The deadline for submission is January 31st of the year in which quarterly tax filing begins. If the taxpayer does not submit a request form to the tax authority after this deadline, the taxpayer will continue to file VAT and personal income tax returns monthly until the end of the calendar year.
4.2. Changing the tax filing period from quarterly to monthly
If a taxpayer is not eligible to file VAT and personal income tax returns quarterly during that stable period, then from the year immediately following the year of discovery until the end of the stable period, the taxpayer must file VAT and personal income tax returns monthly.
Furthermore, taxpayers who are eligible to file VAT and personal income tax returns quarterly but wish to switch to monthly filing must notify the directly managing tax authority (according to Appendix I issued with Decree 126/2020/ND-CP). The deadline for submission is no later than the deadline for submitting the VAT and personal income tax returns for the first month of the year in which monthly filing begins. If the taxpayer does not submit the notification to the tax authority after this deadline, they will continue to file quarterly tax returns until the end of the calendar year.
See more: Tax filing deadlines for 2022
Legal grounds:
- Article 15 of Circular 151/2014/TT-BTC dated October 10, 2014;
- Article 9 of Decree 126/2020/ND-CP dated October 19, 2020;
- Point b, Clause 2, Article 11 of Circular 156/2013/TT-BTC dated November 6, 2013.