Ms. Nguyen Thi Diep (in Quang Ngai Province) won the contract to work as a canteen service, keep a car at the hospital and pay 97 VND million / month to the hospital (receipt only, no invoice). She would like to ask,  how do you declare and pay taxes for these services? What documents are based on?

Regarding this issue, City Tax Department. in  Quang Ngai Province has the following opinions:

Article 1, Article 2, Article 6 of the Circular No. 92/2015 / TT-BTC dated June 15, 2015 of the Ministry of Finance guiding:

 “Article 1. Taxpayers

1. Taxpayers mentioned in Chapter I of this Circular are residents including individuals, groups of individuals, and households who manufacture and/or trade in goods, services in any field and sector prescribed by law (hereinafter referred to as businessperson or businesspeople)…

2. Taxpayers mentioned in Clause 1 of this Article do not include businesspeople whose revenues are VND 100 million/year or lower.”.

Article 2. Tax calculation methods applied by businesspeople paying flat tax

1. Applied principles:

a) Businesspeople who pay flat tax (hereinafter referred to as payers of flat tax) are those who earn revenue from trading in goods/services in any field and sector prescribed by law, except for the businesspeople mentioned in Article 3, Article 4, and Article 5 of this Circular.

… 2. Basis for tax calculation

d) Time for determination of taxable revenue

… d.1) Flat revenue shall be determined during the period from November 20 to December 15 of the year preceding the tax year.

d.2) If a businessperson is new to business (who does not do business from the beginning of the year) or changes the business scale in the year, the flat revenue of the year shall be determined within 10 days from the beginning date or the changing date.

d.3) Variable revenue (according to invoices) shall be determined at the time prescribed in Point d Clause 2 Article 3 of this Circular…”.

Article 6. Tax declaration by businesspersons paying flat tax

1. Tax declaration principles:

a) Persons who pay flat tax shall declare tax once per year at the Sub-departments of taxation of the district where their business premises are located and are not required to make annual tax statements.

b) Flat tax payers using invoices of tax authorities shall declare and pay taxes on revenues on the invoices quarterly in addition to the flat revenue.

c) In case a businessperson engages in business cooperation with an organization using property under his/her personal ownership but is not able to determine revenue from business, he/she may authorizes the organization to declare and pay flat tax on his/her behalf. The organization shall declare and pay tax on behalf of the person at its supervisory tax authority.

2. Tax declaration documents:

From November 20 to December 05 every year, the tax authority shall hand out tax declarations of the next year to all businesspeople who pay flat tax.

Tax declaration documents submitted by flat tax payers:

- Flat tax payers shall declare tax on flat revenue using declaration form no. 01/CNKD enclosed herewith.

- Flat tax payers using invoices of tax authorities shall declare their revenues according to the invoices in form No. 01/BC-SDHĐ-CNKD enclosed herewith. They are not required to make and submit the invoice use report using the form enclosed with Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance.

- In case a businessperson engages in business cooperation with an organization and authorizes it to declare and pay tax on his/her behalf, the organization shall use form No. 01/CNKD and form No. 01-1/BK-CNKD enclosed where with and submit a photocopy of the business cooperation contract (for the first time of tax declaration of the contract).

3. Deadline for submitting tax declarations:

- Flat tax payers shall submit tax declarations by December 15 of the year preceding the tax year.

- Flat tax payers who are new to business or changes their business lines or scale of business in the year shall submit tax declarations within 10 days from the beginning date or changing date.

- Flat tax payer using invoices of the tax authorities shall submit tax declarations by the 30th day of the quarter succeeding the quarter in which tax is incurred.

… 9. b) Deadline for paying tax

b.1) According to the tax notice, flat tax payers shall pay VAT and PIT of the quarter by the last day of the quarter.

b.2) Flat tax payers that use invoices of tax authorities shall pay tax on revenues on invoices by the deadline for declaring tax on revenues on the invoices as prescribed in Clause 3 of this Article”.

Thus, based on the above provisions and the information provided by her (winning the contract for the canteen service and parking at the hospital, with the amount to be paid to the hospital is 97 VND million / month), the case of her is the subject of declaring and paying VAT and PIT according to the presumptive method (because trading goods and services has a business turnover of over VND 100 million / year), the annual flat tax payable is determined. according to the revenue arising from the business activities of each industry multiplied by the tax rate on the corresponding revenue, specifically:

For parking service: VAT rate is 5%; PIT rate is 2%.

- For the supply of goods at the canteen: The VAT rate is 1%; PIT rate is 0.5%.

- For catering services at the canteen: The VAT rate is 3%; PIT rate is 1.5%.

- The revenue from business activities for each activity is determined and declared on the tax declaration dossier as prescribed. In case of incorrect declaration, the tax authority will determine (based on information on actual business activities, expenses spent on business activities, ...), publicize collect opinions according to regulations to serve as the basis for annual set-up.