5 cases exempted from business household registration
According to Clause 2, Article 79 of Decree 01/2021/ND-CP on business registration, there are currently 5 cases where business households do not need to register their business, including:
- Households producing agriculture, forestry, fishery, and salt making;
- Street vendors, gifts, wholesalers;
- Mobile business people;
- Seafood business people;
- Low-income service workers.
* Note:
- In case a household or individual doing business in the investment and business sector has conditions, they must still register for business in accordance with the provisions of law.
- The low income level applied to each locality will be regulated by the centrally-run city.
In case the business household does not register to do business, it still has to pay tax
Article 2 of Circular 40/2021/TT-BTC stipulates that subjects subject to value added tax and personal income tax include:
(1) Business households and individuals are residential individuals who operate in the production and trading of goods and services in all fields and industries of production and business according to the provisions of law, including some of the following cases:
- practice independently in areas and professions granted licenses or practice certificates according to the provisions of law;
- Activities of real-estate sales agents for lottery agents, insurance agents, and multi-level sales agents of individuals directly signing contracts with lottery enterprises, insurance companies, and multi-level sales enterprises;
- Business cooperation with organizations;
- Agricultural and forestry production and business, salt production, aquaculture, and fishing that do not meet the conditions for tax exemption according to the provisions of law on VAT and personal income tax;
- E-commerce activities, including individuals with income from digital information products and services as prescribed by the law on e-commerce.
(2) Business households and individuals with production and business activities at border markets, border gates, markets in border gate economic zones in Vietnam;
(3) Individuals leasing assets;
(4) Individual transferring Vietnam's national internet domain name .vn;
(5) Organize business cooperation with individuals;
(6) Organizations and individuals declaring taxes on behalf of, paying taxes on behalf of individuals;
(7) Lottery businesses, insurance companies, and multi-level sales businesses pay income to individuals who directly sign a real-estate sales agency contract for lottery, insurance, and multi-level sales.
Accordingly, Article 4 of Circular 40/2021/TT-BTC stipulates the principles for tax calculation of business households and individual businesses as follows:
- Business households and individuals with revenue from production and business activities in the calendar year of VND 100 million or less are not required to pay VAT and are not required to pay personal income tax according to the provisions of law on VAT and personal income tax. Business households and individuals are responsible for declaring taxes accurately, honestly, fully and submitting tax documents on time; responsible before the law for the accuracy, honesty and completeness of tax documents according to regulations.
- Business households and individuals doing business in the form of groups of individuals and households, the revenue level of VND 100 million/year or less to determine that individuals are not required to pay VAT, not required to pay personal income tax is determined for one (01) representative of the group of individuals and households in the tax calculation year.
Thus, business households and individuals with a revenue in the calendar year of over 100 million VND must pay value added tax and personal income tax.
