The Ministry of Finance has announced it will collect opinions on a draft circular guiding tax and tax management for household businesses and individuals.

The basis for tax calculation for business individuals is taxable
revenue and tax rate calculated on revenue. Photo: Thùy Linh

Accordingly, this circular provides guidance on value added tax, personal income tax and tax management for individuals, groups of individuals and households business as resident individuals doing business; business households and individuals doing business at border markets, markets in border economic zones in the territory of Vietnam, as well as individuals having leased assets in the Vietnamese territory and individuals transferring internet domain name to Vietnam ".vn".

The draft circular prescribes tax calculation methods for each group of subjects as follows: households business, individuals business that pays tax via the declaration method; individuals business declare tax every time it arises; households business and individuals business pay tax by following the flat tax method (households paying flat tax); individuals leasing property, individuals directly signing lottery agent contracts, insurance agents, multi-level marketing agents, organisations and individuals should declare tax and pay tax on behalf of individuals.

The draft also states that the basis for tax calculation for business individuals is taxable revenue and tax rate calculated on revenue.

According to this draft, the time for determining taxable revenue of households business and individuals that pay tax by following the declaration method; for individuals business that declare tax every time it arises, the time for determining taxed turnover is the time for determining value-added taxable turnover in accordance with the provisions of the law on value-added tax.

For households paying flat tax, the time for individuals conducting determination of turnover is from November 20 to December 15 of the year before the taxable year. For individuals doing business paying flat tax and having just started their business or changing the scale or type of business in the year, the time for individual conducting determination the flat taxable turnover of the year is within 10 days of starting business or the date of changing type of business. As for the revenue of invoices issued by the tax authority each time it arises, the time for determining taxable turnover is the time for determining the revenue for VAT calculation in accordance with the provisions of the law on value-added tax.

For individuals leasing property, the time of determination of value-added taxable turnover and revenue for calculating personal income tax is the beginning of each payment period on the property lease contract.

For individuals who sign contracts to act as lottery agents, insurance agents, multi-level sales agents, the time of determining taxable turnover is when lottery firms, insurance enterprises and multi-level marketing enterprises pay personal commissions.

In addition, for individuals doing business with an organisation, the time to determine the personal income taxable turnover is when the business cooperation result is divided.

For an individual earning income from digital information content products or services, the time for determining taxable revenue is the time that the individual actually receives the income.

If an individual has income from digital information content products or services but the service provider is from overseas has a partnership agreement in Vietnam to pay income for individual through a partner organisation in Vietnam, the time of determination of taxable turnover is the time when the partner organisation in Vietnam actually receives payments for that individual from a foreign service provider.