From January 01, 08, Circular No. 40 / 2021 / TT-BTC The regulations issued by the Ministry of Finance have officially come into effect, marking a significant turning point in the management of tax declarations for household businesses and individual business owners. Below is a guide on how to calculate taxes and the applicable tax rates for household businesses and individual business owners.
1. When do sole proprietorships need to file tax returns?
According to the regulations at Circular No. 40 / 2021 / TT-BTCHousehold businesses are required to file tax returns in the following cases:
- Large-scale household businesses: Household businesses must have revenue or number of employees that meet or exceed the highest level of the criteria for micro-enterprises, specifically:
- In the fields of agriculture, forestry, fisheries, industry, and construction: the average number of employees participating in social insurance per year is 10 or more, or the total revenue in the preceding year is 3 billion VND or more.
- In the trade and service sector: the average number of employees participating in social insurance per year is 10 or more, or the total revenue in the preceding year is 10 billion VND or more.
- Household businesses voluntarily choose the inventory method.i: Household businesses that have not yet reached a large scale but choose to pay taxes using the declaration method instead of the lump-sum method.
2. Tax return documents
Tax return documents for business households paying taxes using the declaration method include:
- Tax return form for household businesses and individual business owners, form number 01/CNKD issued together with Circular No. 40 / 2021 / TT-BTC;
- Appendix PL Statement of business activities during the period for household businesses and individual businesses, form No. 01-2/BK-HĐKD
- In the case of household businesses and individual businesses paying taxes using the declaration method, if there is evidence to determine revenue based on confirmation from competent authorities, they are not required to submit Appendix 01-2/BK-HĐKD issued with this circular.
3. How to file taxes for household businesses paying taxes based on declaration.
Household businesses that pay taxes using the declaration method should follow these steps to file their tax returns:
- Determine taxable revenue: Taxable revenue for VAT and personal income tax includes all sales revenue, processing fees, commissions, and service fees incurred during the period, including bonuses, subsidies, and compensation.
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Apply the tax rate.: The installation process of The VAT and personal income tax rates by business sector are stipulated in Appendix I of Circular 40/2021/TT-BTC..
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Calculate the amount of tax payable.:
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VAT payable = Taxable revenue × VAT rate.
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Personal income tax payable = Taxable income × Personal income tax rate.
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- Fill out the tax return form.: Fill out the forms according to the instructions above.
- Submit tax returnPayment can be made online (via the eTax system) or in person at the Tax Office.
Note:
- In cases where a business household operates in multiple fields or sectors, the business household or individual business shall declare and calculate taxes according to the tax rate applied to revenue. each field and profession.
- In cases where a business household cannot determine the taxable revenue for each field or industry, or the determined revenue is inconsistent with actual business operations, the tax authority will take appropriate action. Determine the taxable revenue for each sector and industry. In accordance with the law on tax administration.
- If a business household paying taxes using the declaration method determines that the taxable revenue does not match the actual revenue, the tax authority will take action. determining taxable revenue as stipulated in Article 50 of the Law on Tax Administration.
4. Deadlines for filing tax returns and paying taxes
- The deadline for filing monthly tax returns is... the 20th day of the following month month in which the tax liability arises.
- The deadline for filing quarterly tax returns is... the last day of the first month of the next quarter The next quarter in which the tax liability arises.
- The deadline for filing taxes for household tax returns is no later than the last day of the tax return filing deadline.If a supplementary tax return is required, the deadline for filing the tax return is the same as the deadline for filing the tax return for the tax period in which the error occurred.
5. What accounting, invoicing, and documentation procedures must business households paying taxes using the declaration method follow?
According to Article 5, Clause 4 of Circular 40/2021/TT-BTC, business households paying taxes using the declaration method must comply with the following regulations on accounting, invoices, and documents:
- Accounting systemHousehold businesses must implement accounting procedures as prescribed by law. Accounting regime for household businesses and individual businesses as stipulated in Circular 88/2021/TT-BTC.This includes recording business transactions and maintaining accounting records to track revenue, expenses, and taxes payable.
- Invoices and supporting documents:
- Revenue must be recorded using legally valid invoices (electronic invoices or invoices issued by the tax authorities).
- Keep complete records of invoices, receipts, contracts, and related documents to prove the legality of goods and services.
- Present invoices and supporting documents when requested by the tax authorities for inspection.
- Special casesIn the case of household businesses or individual businesses operating in fields or industries where revenue can be determined based on confirmation from competent authorities, they are not required to maintain accounting records, but must still maintain invoices and supporting documents.
6. Instructions for filing business tax returns online
Filing taxes online is a recommended method to save time and ensure accuracy. Below is a step-by-step guide for businesses to file taxes through the eTax system:
- Register for an eTax account:
- Visit the website https://thuedientu.gdt.gov.vn.
- Register an account using the business's tax identification number.
- Download and install the supporting software:
- Download the iTaxViewer software to read and electronically sign tax returns.
- Install a digital signature (provided by providers such as Viettel-CA, FPT-CA) to sign and submit tax declarations.
- Prepare the electronic declaration form:
- Download form 01/CNKD and appendix 01-2/BK-HĐKD (if needed) from the eTax system.
- Fill in the information about revenue, tax rate, and the amount of tax payable.
- Submit your tax return via eTax:
- Log in to the eTax system.
- Upload the completed and electronically signed application form.
- Click the "Submit Declaration" button and check the submission status on the system.
- Pay taxes:
- After submitting the tax return, the system will send a notification of the amount of tax payable.
- Pay taxes through a bank or electronic payment gateway linked to eTax.
- Information storage:
- Save soft copies of the declaration form and related documents on your computer or hard drive.
- Print hard copies (if needed) to keep with invoices and documents.
Note: Business owners should check their email or eTax notifications for updates on the status of their tax return and tax notices from the tax authorities.
7. Do household businesses that pay taxes based on declarations have to finalize their tax returns like enterprises?
According to Article 5, Clause 5 of Circular 40/2021/TT-BTC, Household businesses that pay taxes using the declaration method are not required to file a tax return. like a business. This means:
- Household businesses are not required to prepare an annual tax settlement report to determine the amount of VAT and personal income tax payable.
- However, household businesses are still required to file full tax returns periodically (monthly or quarterly) and pay taxes on time.
- If the tax authorities conduct an inspection and discover errors, the business household must file a supplementary declaration and pay additional taxes (if any) as required.
8. Summary
Filing taxes using the 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.