Do online businesses have to pay Personal Income Tax

How much income does an online business have to pay PIT?

According to the provisions of Clause 2 Article 4 of Circular 40/2021/TT-BTC, individuals or business households when selling online with a turnover of over VND 100 million will be responsible for paying value-added tax (VAT), VAT, and personal income tax (PIT) according to regulations. Accordingly, the tax payable will depend on each industry's total revenue.

Specifically, online sales are within the scope of distribution and supply of goods. Hence, the payable PIT rate is 0.5% of total revenue per year as prescribed in Appendix 1 of the list of industries calculating value-added tax and personal income tax issued in Circular 40/2021/TT-BTC.

In addition, individuals and households when doing business online will also have to pay 1% VAT (VAT). Thus, when doing business online, sellers must pay 1.5% VAT and PIT on the total revenue when selling goods with a turnover of VND 100 million or more/year.

According to the provisions of Point b, Clause 2, Article 44 of the Law on Tax Administration 2019 No. 38/2019/QH14, online sellers need to finalize PIT and VAT no later than the last day of the 4th month from the end of the calendar year.

In case the deadline for submitting tax finalization dossiers coincides with a holiday, the deadline for submission will be counted as the next working day of that holiday. Individuals, organizations, or households doing business online are obliged to declare taxes honestly, accurately, and fully and pay taxes on time by the provisions of law.

What are the penalties for late payment of PIT when doing business online?

(1) Administrative penalties

According to the provisions of Article 13 of Decree 125/2020/ND-CP, administrative penalties for late tax payments are prescribed as follows:

- Warning penalty: Overdue from 01 - 05 days and with extenuating circumstances.

- Fine from 02 - 05 million VND: Exceeding the time limit from 01 - 30 days, unless in the case of the warning above.

- Fine from 05 - 08 million VND: Overdue from 31 - 60 days.

- Fine from 08 - 15 million VND:

Overdue from 61 - 90 days.

Overdue for 91 days or more but no tax payable.

Do not file a tax return but do not incur the amount of tax payable.

- Penalty from 15 - 25 million VND: More than 90 days overdue, tax payable but fully paid before the time the tax authority decides to inspect tax, tax inspect, or make a record of the act of delay in filing tax returns.

(2) Forced travel ban

Tax arrears are a common occurrence that leads to deferred exit today.

According to the provisions of Clause 5, Article 36 of the Law on Exit and Entry 2019 No. 49/2019/QH14, individuals and representatives of enterprises responsible for paying tax but paying late or deliberately evading tax and being subject to enforcement of administrative decisions on tax administration will be prohibited, postponement, extension or cancellation of exit.

In case overseas Vietnamese or Vietnamese leave the country to settle abroad but have not fulfilled their tax payment obligations, they will also be banned from leaving the country.

Thus, it can be seen that if online sellers deliberately evade or delay paying taxes, they will be put on the list of prohibited exits until they fulfill their tax payment obligations.

Recently, at the meeting related to proposals on combating tax loss from e-commerce in February 2024, the General Department of Taxation proposed to review to bring more individuals and organizations into management, requiring appropriate declaration to adjust revenue or handle arrears.

Accordingly, tax authorities will apply measures to forcibly suspend exit for online sellers who have not fulfilled their tax obligations.

Personal income tax finalization is an individual's determination of full tax liability for one year, an individual's tax period with the state budget. "PIT collection settlement regulations" of the TASCO Tax Agent will advise and support customers to prepare necessary tax finalization documents according to regulations. Tasco's PIT finalization service is currently the most prestigious, quality, efficient, and economical service in Ho Chi Minh City.

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Above is the article to answer the question Does online business have to pay PIT? Hope the cover will bring you useful information. Thanks for watching.

TASCO Tax Agency is proud to be an organization founded and led by CEOs with more than 20 years of experience in the field of Accounting - Tax - Finance in multinational companies with a team of highly qualified specialists, always updating knowledge regularly and working with the motto "DEDICATION - RESPONSIBILITY - PROFESSIONALISM" Ensure to provide entrepreneurs with the most reputable and professional business establishment services, tax accounting services, tax consulting. Besides, TASCO always puts the interests of entrepreneurs first. More than anyone, TASCO understands that customers when they first start their business have to invest a lot of costs. Therefore, TASCO always supports customers to minimize costs to operate businesses sustainably.

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