Taxpayers must be familiar with the types of corporate taxes they need to declare in order to calculate, declare accurately and truthfully, and pay the full amount of tax to the state budget as required. Failure to declare all required corporate taxes will result in back taxes and late payment penalties.
– Taxpayers must use the correct tax return form and accompanying appendices as prescribed by the Ministry of Finance. They are not allowed to change the format, add, remove, or alter the position of any item in the tax return form. For certain types of documents in the tax file for which the Ministry of Finance has not issued a form, the relevant legal regulations shall apply.
– Businesses use the HTKK tax declaration software program to prepare tax returns. Businesses can download this program from the General Department of Taxation's website and declare the appropriate taxes based on the types of taxes they need to declare.
– After the deadline for filing tax returns has passed, if a taxpayer discovers errors in their previously submitted tax return, they may file a supplementary tax return (including the amended tax return for the tax period with errors; the supplementary explanation form No. 01/KHBS issued with Circular No. 156/2013/TT-BTC; and supporting documents explaining the data in the supplementary explanation form) to the tax authority on any working day, regardless of the deadline for filing the next tax return, but before the tax authority or competent authority announces a tax audit or inspection decision at the taxpayer's premises.
Types of business taxes that need to be declared.
1. Declare business license fees.
a. The business license fee payer submits the Business License Fee Declaration Form to the tax authority directly managing them.
– In cases where the fee payer has dependent units (branches, representative offices, business locations) operating in the same provincial locality, the fee payer shall submit the Business License Fee Declaration Form for those dependent units to the tax authority directly managing the fee payer;
– In cases where the fee payer has dependent units (branches, representative offices, business locations) operating in a different province from where the fee payer's head office is located, the dependent unit shall submit the Business License Fee Declaration Form for the dependent unit to the tax authority directly managing the dependent unit.
b. The procedure for declaring business license fees is as follows:
– Business license fees must be declared once when a taxpayer starts operating a new business, no later than the last day of the month in which business operations begin.
– In the case of a newly established business that has not yet commenced production or business activities, the business license fee must be declared within 30 days from the date of issuance of the business registration certificate or the date of issuance of the investment registration certificate and tax registration.
c. The business license tax declaration form is the Business License Fee Declaration Form issued together with Decree No. 139/2016/ND-CP.
d. The deadline for paying business license fees is no later than January 30th of each year. In the case of a newly established business or production facility, the deadline for paying business license fees is no later than the last day of the deadline for submitting the fee declaration form.
2. VAT tax declaration
Responsibility for filing value-added tax returns with the tax authorities.
– Taxpayers submit value-added tax returns to the tax authority directly responsible for their tax administration.
– In cases where a taxpayer has a subsidiary business unit operating in the same province or centrally-governed city as the taxpayer's head office, the taxpayer shall file a single value-added tax return for both the main business unit and the subsidiary unit.
– In cases where a taxpayer has a subsidiary business unit operating in a different province from where the taxpayer's head office is located, the subsidiary unit shall submit its value-added tax return to the tax authority directly managing the subsidiary unit; if the subsidiary unit does not directly sell goods and does not generate revenue, the tax return shall be filed centrally at the taxpayer's head office.
For taxpayers who are just starting their business operations, value-added tax (VAT) declarations are made quarterly. After completing 12 months of business operations, from the following calendar year onwards, the VAT declaration frequency will be based on the revenue from the sale of goods and services in the immediately preceding calendar year (which must be a full 12 months) to determine whether to declare VAT monthly or quarterly.
Example:
– For taxpayers who started their business operations in January 2017, the value-added tax (VAT) declaration should be done as follows: in 2017, the company should declare VAT quarterly; in 2018, it should declare quarterly if the total revenue in 2017 was 50 billion VND or less. Conversely, in 2018, it should declare monthly if the total revenue in 2017 was over 50 billion VND.
– For taxpayers who started their business operations in February 2017, the value-added tax (VAT) declaration should be done as follows: in 2017 (from February to December), the company should declare VAT quarterly; in 2019, it should declare quarterly if the total revenue in 2018 is 50 billion VND or less. Conversely, in 2019, it should declare monthly if the total revenue in 2018 is over 50 billion VND.
+ In cases where taxpayers who meet the eligibility requirements and are subject to quarterly value-added tax (VAT) filing wish to switch to monthly filing, they must send a notification (using Form No. 07/GTGT issued with Circular 151/2014/TT-BTC) to the directly managing tax authority no later than the deadline for submitting the VAT return for the first month of the year in which they begin monthly VAT filing.
+ Quarterly tax filing period: The choice of filing taxes quarterly or monthly remains stable throughout the calendar year and for a 3-year cycle. The first stable cycle is defined as running from October 1, 2014 to December 31, 2016.
3. Filing Corporate Income Tax Returns
a. Responsibility for filing corporate income tax returns with the tax authorities.
– Taxpayers submit their corporate income tax returns to the tax authority that directly manages their tax affairs.
– In cases where the taxpayer has a subsidiary unit with independent accounting, the subsidiary unit shall submit the corporate income tax return for income generated at the subsidiary unit to the tax authority directly managing the subsidiary unit.
– In cases where a taxpayer has subsidiary units that are accounted for separately, those subsidiary units are not required to file corporate income tax returns; when filing corporate income tax returns, the taxpayer is responsible for filing centrally at the head office, including the income generated at the subsidiary units.
– In cases where a taxpayer has a production facility (including processing and assembly facilities) operating as a dependent entity in a province or centrally-governed city different from the location of its head office, when submitting the corporate income tax return, the taxpayer is responsible for filing a consolidated return at the head office covering both the income generated at the head office location and the income generated at the dependent production facility location.
Corporate income tax filing can be done on a case-by-case basis, as an annual tax return, or as a tax return up to the point of a decision regarding the company's division, merger, acquisition, conversion of business type, dissolution, or cessation of operations.
(1) Declare corporate income tax for real estate transfer activities:
– Businesses that conduct real estate transfer activities in the same province or centrally-governed city as their head office must declare taxes at the tax authority directly managing them (Tax Department or Tax Branch). If a business has its head office in one province or city but conducts real estate transfer activities in another province or city, it must submit its tax declaration to the Tax Department or Tax Branch as determined by the Director of the Tax Department where the real estate transfer activity takes place.
– Businesses that do not frequently engage in real estate transfer activities shall declare provisional corporate income tax on each instance of real estate transfer. Businesses that do not frequently engage in real estate transfer activities are those that do not have real estate business functions.
– Businesses that frequently engage in real estate transfer activities are required to pay quarterly provisional corporate income tax as prescribed. Businesses that frequently engage in real estate transfer activities are those whose function is real estate business. At the end of the tax year, the business completes the corporate income tax final settlement procedure for all real estate transfer activities for which provisional corporate income tax has been paid quarterly or on a transaction-by-transaction basis.
(2) Corporate income tax final settlement declaration for enterprises declaring corporate income tax at a percentage of revenue: Enterprises and organizations that are subject to paying corporate income tax at a percentage of revenue from the sale of goods and services as prescribed by the law on corporate income tax shall declare the annual corporate income tax final settlement according to form No. 04/TNDN.
(3) Foreign organizations doing business in Vietnam or having income in Vietnam (collectively referred to as foreign contractors) that do not operate under the Investment Law or the Enterprise Law and have capital transfer activities shall declare corporate income tax on each occasion.
Organizations and individuals receiving capital transfers are responsible for determining, declaring, deducting, and paying on behalf of the foreign organization the corporate income tax payable. If the recipient of the capital transfer is also a foreign organization not operating under the Investment Law or the Enterprise Law, then the enterprise established under Vietnamese law where the foreign organization invests capital is responsible for declaring and paying on behalf of the foreign organization the corporate income tax payable from the capital transfer activities.
b. Tax return documents for income from capital gains:
– Corporate income tax return for capital transfer (according to Form No. 05/TNDN);
– A copy of the transfer contract. If the transfer contract is in a foreign language, the main contents must be translated into Vietnamese: the transferor; the transferee; the time of transfer; the content of the transfer; the rights and obligations of each party; the value of the contract; the term, method, and currency of payment.
– A copy of the decision approving the capital transfer issued by the competent authority (if any);
– A copy of the capital contribution certificate;
– Original supporting documents for the expenses.
In cases where additional documents are required, the tax authority must notify the organization or individual receiving the capital transfer on the same day the documents are received in the case of direct receipt; or within 03 (three) working days from the date of receipt of the documents in the case of receipt via postal service or electronic transaction.
c. Where to submit the declaration:
– Corporate income tax return form 03/TNDN: Submit to the tax authority managing the head office or the tax authority managing the independently accounting branch.
-Form 02/TNDN: Submit to the tax authority directly managing the business or the tax authority where the real estate transfer activity takes place.
-Form 05/TNDN: submitted to the tax authority where the foreign organization or individual transferring capital is registered for tax payment.
4. Filing personal income tax returns for income from salaries and wages.
a. Organizations and individuals paying income that incurs personal income tax withholding shall file tax returns monthly or quarterly. If, during the month or quarter, the organization or individual paying income does not incur personal income tax withholding, they are not required to file a tax return.
b. Personal income tax filing period (monthly or quarterly)
– Organizations and individuals paying income subject to quarterly value-added tax declarations must also declare personal income tax quarterly.
– For organizations and individuals paying income subject to monthly value-added tax (VAT) declaration, the monthly or quarterly personal income tax declaration is determined once from the first month in which tax withholding occurs and applies for the entire year. Specifically as follows:
* Monthly personal income tax filing: Organizations and individuals paying income that generates tax withholding in the month for at least one type of personal income tax return of 50 million VND or more.
* Organizations and individuals paying income that are not subject to monthly tax filing as guided above shall file taxes quarterly.
c. Where to submit the declaration: At the tax authority directly managing the organization or individual paying the income.
5. Filing tax returns for foreign contractors
The Vietnamese party signing the contract with the foreign contractor is obligated to deduct and pay taxes on behalf of the foreign contractor and submit tax returns in cases where VAT is calculated directly on the value added, and corporate income tax is paid at a percentage rate on revenue.
a. For cases where VAT is calculated directly on the value added and corporate income tax is paid as a percentage of revenue, the tax return is filed each time a payment is made to the foreign contractor and a final tax return is filed upon completion of the contractor's contract.
– If the Vietnamese party makes multiple payments to the foreign contractor within a month, they can register to file tax returns monthly instead of filing for each payment made to the foreign contractor.
– The Vietnamese party is responsible for registering with the directly managing tax authority to pay taxes on behalf of the foreign contractor and foreign subcontractor within 20 (twenty) working days from the date of signing the contract.
b. Tax declaration documents for foreign contractors, deadlines for declaration and payment:
Form No. 01/NTNN – Foreign Contractor Tax Declaration Form for cases where the Vietnamese party deducts and pays tax on behalf of the foreign contractor.
Monthly filing period: no later than the 20th of the following month (If the Vietnamese party makes multiple payments to the foreign contractor within a month, they may register to file taxes monthly instead of filing for each payment made to the foreign contractor).
Payments are made on a case-by-case basis: within 10 days from the date of payment to the foreign contractor.
Form No. 02/NTNN – Foreign Contractor Tax Final Settlement Declaration Form for cases where the Vietnamese party deducts and pays tax on behalf of the foreign contractor.
Within 45 days from the end of the contractor's contract.
c. Place of submission: The tax authority directly managing the Company
6. Declaration of excise tax
Responsibility for filing excise tax returns.
– Taxpayers who manufacture goods, process goods, or provide services subject to excise tax; or who engage in export business and purchase goods without paying excise tax, then sell them domestically instead of exporting them, must file an excise tax return with the tax authority directly managing them.
– In cases where taxpayers producing goods subject to excise tax sell these goods through branches, stores, affiliated units, or through agents selling at fixed prices and earning commissions, or through consignment sales, the taxpayer must declare excise tax for all these goods to the directly managing tax authority. Branches, stores, affiliated units, agents, and consignment sales units are not required to declare excise tax, but when sending the Sales List to the taxpayer, they must also send a copy to the tax authority directly managing the affiliated unit, agent, or consignment sales unit for monitoring.
– In cases where a taxpayer has a subsidiary producing goods subject to excise tax in a province or centrally-governed city different from its head office, the tax payment should be made to the tax authority directly managing the locality where the production facility is located.
The above are the common types of corporate taxes that need to be declared. For businesses with specific needs and who wish to know more details about the types of corporate taxes that need to be declared, please contact Expertis.
