Ms. Nguyen Thi Nhan (in Hochiminh City) is an individual business household, who sells groceries, registered tax on April 3, 2018. The tax authority sets the revenue of VND 50,000,000 / month and issue a tax notice of VND 750,000 / month, the license fee in 2018 is level 1, the level is VND 1,000,000 / year. Through the receiving and responding system to the recommendations of the business, Mrs. Nhan would like to ask, is the tax authority calculating the license fee correct? Ms. Nhan based on Official Letter No. 590 / TCT-TNCN dated February 24, 2017 of the General Department of Taxation and said that the 2018 license fee for her business household is level 2, amounting to VND 500,000 / year.
As for 2019, if the monthly average revenue for the business household of Mrs. Nhan does not change, the revenue for calculating PIT in 2019 is VND 600,000,000 / year. Therefore, the total taxable revenue of a 2019 year is 12 months, which leads to an increase in license fees level 2 to level 1.
Ms. Nhan would like to ask, did she determine if the above fee payment rate in 2019 is in compliance with the law?
Regarding this issue, the General Department of Taxation - Ministry of Finance has the following opinions:
In Clause 3, Article 4 of the Government's Decree No. 139/2016 / ND-CP dated October 4, 2016 on license fees, stipulates:
“Organizations, individuals, groups of individuals, production and business households or newly established, and granted tax registration and tax identification numbers and enterprise identification numbers within the first 6 months of the year, shall pay the tax rate. annual license fees; If established, granted tax registration and tax identification number, business code within the last 6 months of the year, 50% of the annual license fee is paid.
Organizations, individuals, groups of individuals, business households that do not declare license fees must pay the annual license fee rate, irrespective of the time of discovery as of the first 6 months of the year. or the last 6 months of the year… ”.
In Clause 2, Article 4 of Circular No. 302/2016 / TT-BTC dated November 15, 2016 of the Ministry of Finance on license fees:
“The rates of licensing fees for individuals, groups of individuals and households engaged in the production and trading of goods and services are as follows:
a) Individuals, groups of individuals, and households with a turnover of over VND 500 million / year: VND 1,000,000 (one million) / year;
b) Individuals, groups of individuals, and households with revenue from over 300 to 500 million VND / year: 500,000 (five hundred thousand) VND / year;
c) Individuals, groups of individuals, and households with revenue from over 100 to VND 300 million / year: VND 300,000 (three hundred thousand) / year.
The turnover used as a basis for determining the rates of license fees for individuals, groups of individuals and households in this Clause is the total revenue for calculating PIT according to the provisions of the Law on PIT.
Individuals, groups of individuals and households mentioned in this Clause that change their turnover, the basis for determining the license fee rate is the PIT-liable turnover of the year preceding the year of calculation of license fees.
Individuals, groups of individuals, and households that have just started a business in the year, the revenue rate that serves as the basis for determining the rate of license fee is the revenue of the taxable year according to the provisions of the Law on PIT.
At Point b, Clause 1, Article 2 of the Finance Ministry's Circular No. 92/2015 / TT-BTC dated June 15, 2015, guiding: “For individuals paying flat tax, the turnover is 100 million VND / year or more. down to identify the individual who does not have to pay VAT, not to pay PIT is the taxable turnover of the year.
In cases where individuals pay flat business tax for the entire year (not full 12 months in a calendar year) include: Individuals who have just started business; business individuals often according to season; if individuals stop / stop their business, the turnover of VND 100 million / year or less to determine that the individual does not have to pay VAT, does not have to pay PIT is the taxable turnover of a year (12 months); The actual taxable turnover to determine the tax payable in the year is the revenue corresponding to the actual number of months of business. In case the flat tax payer has been notified by the tax agency about the amount of presumptive tax payable, if he / she does not do the business for the whole year, the flat tax payer shall be reduced corresponding to the number of months of business suspension / termination in the year.
Example 1: Mr. A started his business in April 2015, and expects to have a flat revenue of 9 months of actual business of VND 90 million (average 10 million / month), the corresponding revenue of a year. (12 months) is 120 million dong (> 100 million dong). Thus, Mr. A is liable to pay VAT and has to pay PIT corresponding to the actual turnover arising from April 2015 of VND 90 million ... ".
Pursuant to the above regulations and guidance, the revenue used as a basis for determining the rate of license fees for business households and individuals is the total revenue for calculating PIT of the preceding year according to the provisions of law. about PIT.
In cases where households and individuals have just started their business in the year, the turnover level that serves as the basis for determining the license fee rate is the total revenue of the tax year according to the provisions of the PIT law.
According to the provisions of the PIT law, the taxable revenue of the year for the case of incomplete business, including new business in the first 6 months of the year is the taxable revenue of a person. year (12 months).
Thus, in the case of Ms. Nguyen Thi Nhan, who has been in business since April 2018, she is liable to pay the license fees of the whole year 2018 calculated according to the turnover of 12 months.
For 2019, license fees are calculated based on the 12-month sales of the year preceding the year 2018.