The provisions of Circular No. 40/2021/TT-BTC will contribute to raising the awareness of legal compliance among business individuals and business households. At the same time, strengthen the management and fight against tax loss for this group.

The Tax Department will reform tax administration for business households
and individuals. Photo: Internet.

Circular No. 40/2021/TT-BTC guiding value-added tax, personal income tax and tax administration for business households and individuals has just been issued by the Ministry of Finance to guide the implementation of new regulations in the Law on Tax Administration No. 38/2019/QH14 and Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government detailing a number of articles of the Law on Tax Administration, meeting the important requirements in tax administration for business households and individuals in accordance with the Government's policy.

Promoting large household businesses into enterprises

According to the General Department of Taxation, the goal when promulgating Circular No. 40/2021/TT-BTC is to reform tax administration for business households and individuals in the direction of simplicity, encouraging households to become enterprises, reform tax management for large-scale business households and individuals; business households and individuals operating in the supply chain of goods and services for enterprises and organizations using state budget capital and many invoices.

Accordingly, these business households and individuals will apply tax management according to declarations, bookkeeping, accounting, invoices and vouchers, thereby managing business activities in accordance with reality, ensuring transparency in tax declaration and payment of business households and individuals as well as tax administration by tax authorities.

Business households and individuals paying tax according to the declaration method in the near future will also apply technologyin all stages of tax administration work similar to enterprises according to the tax authority's roadmap, such as: tax registration, tax return, tax payment, tax refund, inspection, and electronic invoices.

The provisions of Circular No. 40/2021/TT-BTC will contribute to reforming administrative procedures and optimizing tax management for business households and individuals through strengthening the responsibility of organizations, businesses and individuals involved in the supply chain of goods and services, in order to strengthen the supervision of law compliance among organizations and individuals, reduce the focal points of declaration, as well as create favorable conditions for taxpayers and tax authorities.

Key business management on e-commerce platform

Notably, in this Circular, the Ministry of Finance has provided specific instructions in tax administration for business households and individuals doing business on e-commerce platforms.

Accordingly, for e-commerce activities, in addition to fulfilling tax obligations according to current regulations, the Circular has guidelines specifically applicable to e-commerce trading floors.

E-commerce trading floor owners are responsible for declaring tax on behalf of and paying tax on behalf of business individuals through the platformaccording to the tax authority's roadmap.

When it is not possible to declare tax on behalf of an individual, the organization that is the owner of the e-commerce trading floor must provide information related to the individual's business activities through the platformat the request of the tax authorities in accordance with the law, such as: full name; personal identification number or identity card or citizen identification number or passport; tax code; address; email; phone number; goods and services provided; business revenue; seller's bank account; and other relevant information.

According to the General Department of Taxation, in order to develop a roadmap and unified tax management solutions among tax agencies nationwide, the General Department of Taxation will organize a webinar to propagate and guide tax organizations, individuals involved in tax declaration and payment, such as: E-commerce associations, E-commerce trading floors, accounting and auditing consulting firms, business households, and business individuals through the E-commerce Exchange.

In addition, the General Department of Taxation will also coordinate with e-commerce state management agencies under the Ministry of Industry and Trade and the Ministry of Information and Communications to support E-commerce trading floors in implementing the declaration and payment of taxes and the provision of information to state management agencies in accordance with the provisions of law.