Recently, the Ministry of Finance has submitted a second Draft regulating tax declaration, calculation, deduction and payment, and use of electronic invoices for individuals and business households.
In particular, detailed regulations on tax obligations for 4 groups of households and individuals doing business with each type of tax payable corresponding to revenue thresholds.
Accordingly, with the obligation for value added tax. Individuals and business households with a revenue threshold of VND 500 million or less are not subject to value added tax (VAT).
For households and individuals with a revenue of over VND500 million/year, tax will be paid directly:
Revenue x (person) at a percentage according to the provisions of the Law on VAT No. 48/2024.
For personal income tax (PIT), households and individuals with a revenue of less than VND500 million/year do not have to pay this tax.
When a business household or individual has a revenue exceeding the threshold of 500 million, personal income tax is determined by:
Income subject to tax x (person) with the tax rate according to regulations.
In which, taxable income is determined by:
Sales revenue - (except) expenses related to production and business in the tax calculation period.
Specifically as follows:
Business households with revenue from over 500 million to 3 billion VND/year: Apply a tax rate of 15%.
Business households with revenue of over VND3 billion to under VND50 billion/year: The tax rate is 17%.
Business households with revenue of over VND50 billion/year: The regulated tax rate is 20%.
Notably, households and commercial fish with a revenue of over 500 million to under 3 billion VND have the right to choose the method of calculating personal income tax in both ways of calculation, including:
Taxable income x (person) tax rate of 15% or taxable revenue x (person) tax rate according to regulations.
The draft also clearly states that in case a household or individual does business with many business locations and many industries, the household or individual will be deducted VND 500 million from the previous year's revenue when calculating personal income tax of the business location or industry chosen by the household or individual, but the total deduction is not more than VND 500 million for all business activities of the household or individual.
For households and individuals leasing real estate, except for accommodation business activities, paying personal income tax is determined by the revenue exceeding 500 million x (person) with a tax rate of 5%.
The draft also stipulates that the method of calculating personal income tax for group 2 business households - revenue over 500 million to under 3 billion VND, is applied stably for 02 (two) consecutive years from the first year of application.
In case a business household or individual has an annual revenue of over VND 500 million to VND 03 billion and is applying the method of calculating personal income tax based on the percentage of taxable revenue if for two consecutive years it has been self-determined or the tax authority has data to identify the individual or business household with an actual revenue of over VND 3 billion, from the following year it must switch to the method of calculating personal income tax on income for tax calculation x (person) with the prescribed tax rate.
