How to calculate business household tax according to the declaration method

Create at: 19/04/2022 17:53

1. What is business household tax calculation according to the declaration method:

🔰 Pursuant to Circular 40/2021/TT-BTC, the tax calculation of business households and individuals according to the declaration method is: "The method of tax declaration and calculation of tax according to the ratio on the actual revenue generated by the monthly or quarterly period" The detailed regulations are as follows:

🔰 At the end of a period (monthly or quarterly) due to the deadline for declaring and calculating tax for business households, business individuals will based on the revenue generated in the tax declaration period, calculate the amount of VAT and PIT incurred to pay in the period with the tax authorities;

🔰 Business households and individuals paying tax by this method must make bookkeeping according to the accounting regime, invoices, and documents as a basis for the declaration.

2. Taxpayers according to the declaration method:

In case the declaration method is applied to business households and individuals:

✔ Having a large business scale;

✔ Having a scale that does not qualify as a large business but registering to declare and pay tax according to the declaration method.

Large-scale business households and individuals are determined based on annual revenue and an average number of employees, specifically:

✔ Business households and individuals with business lines in the agriculture, forestry, industry, construction, and fisheries with total revenue of 3 billion VND or more in the previous year or a total number of employees paying insurance annual average of 10 people or more;

✔ For business households and individuals whose business lines are commerce or services, the total revenue of the preceding year must be over 10 billion VND or the total number of employees paying social insurance premiums on average is 10 or more people per year.

3. How to calculate business household tax according to the declaration method:

Amount of VAT payable in the period = Taxable turnover x VAT rate

PIT payable in the period = PIT taxable revenue x PIT rate

In there:

⏩ Revenue subject to VAT and revenue subject to PIT is the entire revenue inclusive of tax (for taxable cases) arising in a tax period from production, business, purchase, and sale of goods, service provision, construction, and commission, including:

• Bonuses to support sales, trade discounts, payment discounts, promotions, cash or non-cash support;

• Subsidies, extras, surcharges, and additional fees are entitled to according to regulations;

• Compensations due to customer's breach of contract and other compensations (only included in PIT taxable revenue);

• Other revenues are enjoyed whether or not the money has been collected.

⏩ Tax rate:

• Tax rate on turnover includes: VAT rate and PIT rate applied to each industry and field according to the guidance in Appendix I issued together with Circular 40/2021/TT-BTC, Specifically:

Fields	VAT rate	PIT rate
Trade, sell goods	1%	0.5%
Services, construction excluding materials	5%	2%
Production, services associated with goods, transportation, construction with raw materials procurement	3%	1.5%
Services and production of products are subject to VAT at the rate of 5% according to the deduction method and other fields not in the groups above.	2%	1%

4. How to declare business household tax according to the declaration method:

👉 Business households and individuals submit VAT and PIT declaration dossiers at the tax authorities directly managing where the business households and individuals operate and do business.

👉 For business households and individuals with a monthly declaration period: no later than the 20th of the next month must submit the declaration and tax money;

👉 For business households and individuals with a quarterly declaration period (the deadline for filing tax returns is the same as the deadline for paying tax): the last day of the first month of the next quarter.

👉 In case business households and individuals make additional declarations of tax declaration dossiers, the arising tax is the deadline for submitting tax returns of the tax period with errors;

👉 If there is a delay in paying tax, the amount of late payment is calculated according to the following formula: