(Chinhphu.vn) – Tax and fee levels with combined business model

Mr. Hoang Nam wants to trade in children's toys such as board games, chess types such as chess and Chicness chess (imported from Amazon US in small numbers from 2 to 3 sets) ... combining coffee model.

Through the receiving and responding  system of businesses, Mr. Nam would like to ask , doeshe have to register a website or set up a company and pay taxes? If so, what costs are needed as well as how to pay tax rates?

Regarding this issue,The Ministry of Finance responded as follows:

The granting of business registration licenses to organizations and individuals falls under the functions and tasks of the business registration agency already decentralized in the locality (according to Article 13 of the Decree No. 78/2015 / ND-CP of Government: at the provincial level is the Business Registration Office under the Department of Planning and Investment, at the district level is the Finance and Planning Department under the district People's Committee. Therefore, whether Mr. Hoang Nam has to register a website or set up a company, we recommend him to contact the local business registration’s office for specific instructions.

Taxes and fees for children's toy business

Depending on the form of business registration, which is an enterprise or a business household, the relevant tax and fee policies are as follows:

a) License fee: Implemented in accordance with the Decree 139/2016 / ND-CP dated October 4, 2016 of the Government on license fees and the Circular No. 302/2016 / TT-BTC November 15, 2016 of the Ministry of Finance instructing license fees. Particularly is as follows:

- Regarding the fee level: In Clause 1 and Clause 2, Article 4 of the Decree No. 139/2016 / ND-CP:

“Article 4. Rate of licensing fees

1. The rate of licensing fees for the organizations having the production and business of goods and services is as follows:

a) The organizations with charter capital and investment capital over 10 billion dong: 3,000,000 dong/year;

b) The organizations with charter capital and investment capital of less than 10 billion dong: 2,000,000 dong/year;

c) The branches, representative offices, business location, public service providers and other business organizations: 1,000,000 dong/year;

The rate of licensing fees for the organizations specified under Point a and b of this Paragraph is based on the charter capital written in the certificate of business registration or on the investment capital written in the certificate of investment registration in case of no charter capital.

2. The rate of licensing fees for the individuals and households having the production and business of goods and services is as follows:

a) The individuals, groups of individuals and households with revenues over 500 million dong/year: 1,000,000 dong/year;

b) The individuals, groups of individuals and households with revenues between 300 and 500 million dong/year: 500,000 dong/year;

c) The individuals, groups of individuals and households with revenues between 100 and 300 million dong/year: 300,000 dong/year”.

- In case of exemption from license fees: In Clause 1, Article 3 of the Decree No. 139/2016 / ND-CP, individuals, groups of individuals and households engaged in production and business activities have turnover. Annual fee of VND 100 million or less is exempted from license fees.

b) Regarding VAT: To comply with the provisions of the VAT Law, the Decree No. 209/2013 / ND-CP, the Circular No. 219/2013 / TT-BTC, the Circular No. 26/2015 / TT-BTC and the Circular No. 130/2016 / TT-BTC. Specifically:

- Article 4 of the VAT Law provides “Taxpayers include organizations and individuals producing or trading in goods or services subject to value-added tax (below referred to as business establishments) and organizations and individuals importing goods subject to value-added tax (below referred to as importers)”.

- Article 8 of the VAT Law provides for 0%, 5% and 10% VAT rates, in which:

The tax rate of 0% applies to exported goods and services, international transportations, goods and services not liable to value added tax specified in Article 5 of this Law upon exportation, except cases except for the cases specialized in Clause 1, Article 8 of the VAT Law

+ The tax rate of 5% applies to a number of goods and services, including "Toys for children".

+ The tax rate of 10% applies to goods and services not specified in Clause 1 and Clause 2, Article 8 of the VAT Law.

Clause 1, 2 Article 10 of the VAT Law provides for the method of VAT deduction as follows:

“Article 10. Tax credit method

1. The value-added tax credit method is specified as follows:

a/ The payable value-added tax amount according to the tax credit method is the output value-added tax amount minus the creditable input value-added tax amount;

b/ The output VAT amount is equal to the total VAT amount of sold goods and services inscribed in the VAT invoice.

The output value-added tax amount is the total amount of value-added tax on sold goods and services indicated in the added-value invoice;

In case of using vouchers to record the payment price being VAT-inclusive price, the output VAT is determined by the payment price minus the VAT calculation price determined under the provisions of Point k, Clause 1, Article 7 of this Law ;

c/ The creditable input value-added tax amount is the total value-added tax amount indicated in the added-value invoice on goods or service purchase and the document proving the payment of value-added tax on imported goods, and must satisfy the conditions specified in Article 12 of this Law.

2. The tax credit method applies to business establishments which fully observe regulations on accounting, invoices and documents as prescribed by the law on accounting, invoices and documents, and register to pay tax according to the tax credit method.

a) Business establishments that have annual turnover from selling goods or providing services with one billion dong or more, except for business households and individuals;

b) Business establishments voluntarily register to apply tax deduction method, except for business households and individuals”.

- Point b, Clause 2, Article 11 of the VAT Law stipulates the method of calculation directly on VAT:

"2. The payable VAT amount by the method of calculation directly on the value of VAT shall be equal to the% rate multiplied by the turnover applied as follows:

b) Percentage for calculating VAT is stipulated as follows:

- Distribution and supply of goods: 1%;

- Services, construction does not cover materials: 5%;

- Production, transportation and services associated with goods and construction with material supply contract: 3%;

- Other business activities: 2% ".

These regulations are specifically guided in the Circular No. 219/2013 / TT- BTC dated December 31, 2013, the Circular No. 26/2015 / TT-BTC dated February 27, 2015, the Circular No. 130/2016 / TT-BTC dated August 12, 2016 and the Circular No. 92/2015 / TT-BTC dated June 15, 2015 of the Ministry of Finance.

Tax rates

Based on the above provisions, if Mr. Hoang Nam establishes a company and pays tax by deduction method, the VAT rate for game rental services such as boad games, chess types such as chess and Chinese chess. with coffee sales of 10% and in case of selling toys to children as stipulated in Clause 14. Article 10 of the Circular No. 219/2013 / TT-BTC, the VAT rate of 5% shall apply.

In case Mr. Nam establishes a company and pays tax by the direct method or Mr. Nam registers business in the form of business households or individuals, the percentage of VAT calculated on turnover shall comply with the provisions at Point. b, Clause 2, Article 13 of the Circular No. 219/2013 / TT-BTC and Point b, Clause 2, Article 2 of the Circular No. 92/2015 / TT-BTC dated June 15, 2015 of the Ministry of Finance.

Special consumption tax (if any) shall comply with the provisions of the Special Consumption Tax Law, the  Decree No. 108/2015 / ND-CP and the Circular No. 195/2015 / TT-BTC. Specifically:

"Article 2 of the Special Consumption Tax Law stipulates taxable objects including:"... 2. Services:

c) Casino business (casino); Bonus video games include jackpot games, slot machines and similar machines.

Article 4 of the Law on Special Consumption Tax stipulates that taxpayers: "Special consumption tax payers are organizations and individuals producing and importing goods and providing services subject to special consumption tax" .

In the case of Mr. Hoang Nam doing business with prize-winning electronic games, including games with jackpot machines, slot machines and similar machines subject to special consumption tax with a tax rate of 30%.

Personal income tax (PIT) (in case of business registration in the form of a household or business individual): If doing business in the form of business households or individuals, Mr. Hoang Nam shall fulfill tax obligations as prescribed. The Law on personal income tax (the Law No. 04/2007 / QH12 amended and supplemented in the Law No. 26/2012 / QH13, the Law No. 7l / 2014 / QH13 and guiding documents).

Accordingly, CIT payable by taxable income multiplied by 20% (applied from January 1, 2016). The determination of revenue, expenses, taxable income, taxable income is proposed to comply with the provisions of Article 1, Article 8, Article 9 of the Law on CIT and guiding documents.

Import tax: Goods imported through Vietnamese border gates and borders are subject to import tax. Goods imported from the US shall pay import tax at the preferential tax rates prescribed in the Decree No. 125/2017 / ND-CP amending and supplementing a number of articles of the Decree No. 122/2016 / ND-CP dated September 1, 2016 of the Government on the Export Tariff, Preferential Import Tariff, List of goods and absolute duty, mixed tax, non-quota import tax.

To determine the specific import tax rate, it should be based on the actual imported goods or technical documents of the goods. Therefore, in order to know the tax rates and codes of imported goods, Mr. Hoang Nam is requested to contact the customs office where the import procedures are carried out for instructions on classifying goods or implementing pre-determined procedures. goods codes as stipulated in Article 7 of the Circular No. 38/2015 / TT-BTC dated March 25, 2015 of the Ministry of Finance regulating customs procedures; customs inspection and supervision; export tax, import tax and tax administration for import and export goods.

Regarding customs procedures, according to detailing provision of the Government's Decree No. 08/2015 / ND-CP of January 21, 2015and measures manage the implementation of the Customs Law on customs procedures, inspection and Customs supervision and control as well as the Circular No. 38/2015 / TT-BTC.

Above are the general provisions of tax laws and current fees related to the question that Mr. Hoang Nam asked.We recommend Mr. Hoang Nam to contact the tax office, local customs office (propaganda and support department) for detailed instructions.