Principles for determining tax obligations
According to tax laws, business households and individual businesses with revenue from production and business activities in the calendar year from 100 million VND or less will be eligible to not pay value-added tax (VAT) and personal income tax (PIT). Conversely, if revenue exceeds the threshold of 100 million VND, taxpayers are responsible for self-declaring or paying tax according to the khoán method based on the percentage of revenue.
Taxable revenue is defined as the total amount of sales, processing costs, commissions and service provision. Bonuses, sales support, promotions, and commercial discounts are also included in revenue to apply the corresponding tax rate.
Detailed PIT and VAT rates by industry
Depending on the nature of the business operation, the tax rate is specifically divided as follows:
Group of distribution and supply of goods
Applicable to wholesale and retail activities, sales support bonuses, promotions, commercial discounts
VAT rate is 1%
Personal income tax rate is 0.5%
The service and construction group does not bid for raw materials
Applicable to accommodation services, loading and unloading, post, brokerage, legal advice, finance, accounting, advertising, spa, karaoke, internet, tailoring, laundry, hairdressing, computer repair, non-subcontracting construction
VAT rate is 5%
PIT rate is 2%
Asset and agent leasing group
Applicable for leasing houses, land, shops, factories, warehouses, vehicles and machinery without drivers
VAT rate is 5%
Personal income tax rate is 5%
Regarding lottery agents, insurance, and multi-level marketing, they are only subject to a personal income tax rate of 5% (not subject to VAT).
Group of production, transportation and services associated with goods
Applicable to production, processing, processing of goods, mineral exploitation, freight and passenger transportation, food services, repair and maintenance of machinery, automobiles, motorbikes, construction with raw material bidding
VAT rate is 3%
Personal income tax rate is 1.5%
Other business groups
Applicable to the production and provision of services subject to 5% VAT according to the deduction method or activities not yet listed in detail
VAT rate is 2%
PIT rate is 1%
Notes when doing multi-industry business
In cases where business households and individuals operate in many different fields, taxpayers must declare and calculate taxes according to the corresponding ratio for each field. If it is not possible to separate revenue from each industry or the declared level is not consistent with reality, the tax authority has the right to determine taxable revenue according to the provisions of tax management law to ensure fairness and avoid budget revenue loss.
