Mr. Khanh asked, is the amount of discount when paying to this individual business household is the amount after deducting the tax declared and paid on its behalf or the amount before tax deduction?

In addition, for promotional goods with conditions for purchase and sale (such as buying 10 products, getting 1 product free) when issuing invoices to customers who are contracted households, do businesses have to declare tax on behalf of and pay taxes to individuals according to Clause 5, Article 20 of Circular No. 40/2021/TT-BTC? Because of conditional promotion, business households have already included the selling price for customers, but business households do not increase their income from promotional products on the market.

The Tax Department of Quang Ngai province responded to this problem as follows:

In Clause 5, Article 7 of Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government stipulates as follows:

"Article 7. Tax declaration dossiers

… 5. Organizations and individuals that declare and pay tax on behalf of taxpayers must fully comply with regulations on tax declaration and payment as prescribed for taxpayers in this Decree, consists of:

… dd) Organizing the payment of bonuses, sales support, sales promotion, trade discount, payment discount, cash or non-cash support for individuals being business households and individuals If the business pays tax by the presumptive method, the organization is responsible for declaring tax on behalf of and paying tax on behalf of the individual according to regulations...".

In Article 8, Article 10 of Circular No. 40/2021/TT-BTC dated June 1, 2021 stipulates as follows:

"Article 8. Tax calculation method in case organizations and individuals declare tax on behalf of individuals or pay taxes on behalf of individuals

1. Organizations and individuals declare tax on behalf of individuals or pay taxes on behalf of individuals in the following cases:

... c) Organizing the payment of bonuses, sales support, sales promotion, trade discount, payment discount, cash or non-cash support, compensation for breach of contract, compensation usually different for contracted households;

… 3. In case an individual generates a revenue of 100 million VND/year or less in many places during the year, the individual expects or determines the total revenue of over 100 million VND/year, he or she may authorize other organizations paying tax on behalf of the revenue generated at the authorized unit in the tax year. Particularly for contracted households, in addition to the contracted revenue, the contracted households also receive bonuses, sales support, sales promotions, trade discounts, payment discounts, cash or non-cash support payments. In case of compensation for breach of contract or other compensation, the paying organization shall declare tax on behalf of and pay tax on behalf of the actual payment of these amounts in the tax year. In case the organization declares tax on behalf of an individual who leases the property, the determination of a turnover of 100 million VND/year or less will be applied to determine the taxpayers not required to pay tax under the guidance at Point c, Clause 1, Article 9 of this Circular.

In Article 7 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance stipulating the VAT calculation price as follows:

"... 3. For products, goods and services (including purchased from outside or self-manufactured by business establishments) used for exchange, donation, giving, or paying instead of salary, is the VAT calculation price of goods or services of the same or equivalent type at the time of arising of these activities…

5. For products, goods and services used for promotion in accordance with the law on commerce, the taxable price is determined to be zero (0); In case goods and services are used for promotion but do not comply with the provisions of the law on commerce, they must declare, calculate and pay tax like goods and services used for internal consumption, donation, donation or donation. …

22. Taxable prices for goods and services specified in Clauses 1 to 21 of this Article include surcharges and additional fees in addition to the prices of goods and services to which business establishments are entitled.”

In case a business establishment applies the form of commercial discount to customers (if any), the VAT calculation price is the discounted commercial selling price for the customer. In case the commercial discount is based on the quantity and sales of goods or services, the discount amount of the sold goods shall be adjusted on the goods and service sale invoice of the last purchase or the next period. In case the discount amount is made at the end of the sales discount program (period), an adjusted invoice shall be issued with a list of the invoice numbers to be adjusted, the adjusted amount and tax amount. Based on the adjusted invoice, the seller and the buyer declare and adjust the revenue from purchase and sale, output and input taxes.

Based on the above provisions and the content of Mr. Tran Ngoc Khanh's question, in case the organization pays sales promotions and discounts in cash or not in cash to individuals, they are business households and business individuals. If an enterprise pays tax by the presumptive method, the organization is responsible for declaring tax on behalf of and paying tax on behalf of the individual according to the provisions of Clause 5, Article 7 of Decree No. 126/2020/ND-CP and Circular No. 40/2021/ TT-BTC.

The turnover for calculating VAT and the revenue for calculating PIT as a basis for declaring and paying tax on behalf of business households and individuals paying tax by the presumption method is the tax-inclusive revenue (in case of taxable) of the whole business. sets of promotions and commercial discounts that business households and individuals are entitled to.

It is suggested that Mr. Tran Ngoc Khanh, based on the above regulations, actually arise at the unit to declare tax on behalf of, pay tax on behalf of the contracted household in accordance with regulations.