How to calculate license fees for individual business households

How to calculate license fees for individual business households

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.

News Related

OTHER NEWS

Do elderly employees have to pay social insurance?

A reader has email address phuongngax @ xx asked: My company signed a labor contract with an employee who is on pension. Does my company have to pay social insurance for this employee?… Read more »

Does the company have to adjust the project when the construction volume is really reduced?

Mr. Bui Canh Viet works at PMU of Construction Investment City in Ba Ria – Vung Tau Province. His unit has a maintenance work, an asphalt concrete carpet of 22 roads, a total… Read more »

Working after retirement is still entitled to a retirement allowance

Mr. Duong Quy Ngoc (in Can Tho Province) asked, the employee has completed the procedures to receive the pension but continues to work for the company, which is the transitional subject in Clause… Read more »

Adjusting the contract when the investor is slow to hand over the site

Through receiving and responding system to businesses’ recommendations he Thai Cuong Architecture and Construction Co., Ltd. (in Can Tho Province) requests the authorities to answer questions related to the construction contract when the… Read more »

Are unemployment benefits reserved when going to labor export?

A readerwith email address hoanganhx @ xx asked: I have paid unemployment insurance for 5 years and have been entitled to 5 months of unemployment benefits. When I was enjoying the 2-month unemployment… Read more »

Are employee welfare payments tax-deductible?

In 2015, the Do Thanh Pharmaceutical Co., Ltd. spent some benefits to employees directly in cash. This expense is specified in the bylaws of the Company when it is fully documented. So, are… Read more »

How many days off are employees allowed to take care of their sick children?

A reader with email address as hoanglanx @ xx asked: I am working at a company and have paid social insurance contributions. If my two-year-old child is sick, how many days off will… Read more »

How many employees can a householdbusiness use?

A reader with email address anhphamx @ xx asked: A few years ago, I opened a carpentry factory, initially registered to use 5 employees. However, due to business needs, I want to hire… Read more »

Is there any VAT on project management costs?

In case the regional project management unit has other legal revenues that are not included in the investment costs of projects assigned to manage, the registration must be made. and pay all taxes,… Read more »

Will the contractor without fulfilling tax eliminated?

To prove the financial situation, the contractor must submit financial statements corresponding to the completed accounting periods. Attached is a certified photocopy of one of the following documents: Tax finalization inspection record; Tax… Read more »

Does the labor contract end when the company is suspended?

A reader has email address such as tuanhungx @ xx asked: because of business’s difficulty, my company has to suspend business. During the business suspension, did the labor contract between the company and… Read more »

Guidance on converting VAT calculation method

JQTEC Consulting Production and Trading One Member Limited Company (in Khanh Hoa Province) was established on November 21, 2012, using invoice deduction method from 2012 to 2016. Due to knowledge of law Tax… Read more »

Inconsistency in calculating the area of commercial and resettlement apartments

According to Ha Duong Law Firm (in Hanoi), the Company recently received a number of questions from households who are able to arrange resettlement houses regarding the identification of apartment area. Specifically, these… Read more »

Moving head office, do businesses have to apply for a work permit again?

Foreign workers who have been granted a work permit and are still in force can be sent, transferred or dispatched to work in another province or city that is differentfrom province or city… Read more »

Competence to approve investment policies

The amended Law on Investment project (the “LOI 2020”) dated June 17, 2020 comprises seven chapters, 77 articles and four attached appendices. The law took effect on January 1, 2021 and stipulates competence… Read more »

Requirements for suspension of pension fund and death benefit fund

The Ministry of Labor, Invalids and Social Affairs (MOLISA) released Official Letter 1511/LDTBXH-BHXH, dated May 4, 2020 to specify conditions for enterprises to suspend contributions to the pension fund and death benefit fund.… Read more »

How to match information with other tax codes?

Ms. Nguyen Thi Thu (in Hanoi) registers a tax code for her dependents to reduce family circumstances. However, the results returned that coincide information of identical identification with other tax identification numbers. Mrs.… Read more »

Taxed price when transferring real estate

For real estate transfer, the taxable price is the real estate transfer price minus (-) the land price that is deducted for VAT calculation. According to MK Group Vietnam Joint Stock Company, Circular… Read more »

How do we do cafeteria services, look after a car at the hospital, and pay taxes?

Ms. Nguyen Thi Diep (in Quang Ngai Province) won the contract to work as a canteen service, keep a car at the hospital and pay 97 VND million / month to the hospital… Read more »

Declaring VAT on tolls

From January 1, 2017, according to the Law on Fees and Charges, the road user fee will change to the price mechanism (determined by the State), so according to the Law on VAT,… Read more »

How to calculate the statute of limitations for sanctioning tax violations

The unit of Mr. Le Dinh Gian (in Binh Duong Province) prepares the PIT finalization for the year 2012 – 2016. Mr. Gian would like to ask, if the inspection found that his… Read more »

How is taxed income transferred from abroad to Vietnam?

Ms. Nguyen Phuong Thuy (in Hanoi) contributed capital to set up a company in Singapore, including 2 members, she and a foreign company. Now the company pays dividends. Through the receiving and answering… Read more »

How does a hydroelectric company pay amount to exploit water resources?

The implementation of the obligation to pay charges for granting water right by organizations and individuals that have been granted a license does not depend on the amount payment between organizations and individuals… Read more »

PIT for the payment of the termination of the labor contract

The Pham Trang Phuong Dung Company (in Hochiminh City) is working to prepare to stop operating in Vietnam. She and the company will sign an agreement to terminate the labor contract (previously she… Read more »

When authorizing owner’s mother to sell a house, how to calculate tax?

Ms. Phan Thi Dung and her husband (in Hochiminh City) are abroad and want to sell their apartment in Vietnam. Mrs. Dung made a contract authorizing her mother to fully sign the sale… Read more »

Are companies allowed to change the tax calculation method?

Mr. Pham Anh Loc’s Company (in Ho Chi Minh City) was established in 2011, operating in the field of cleaning and tending services, with a turnover of about VND 15 billion / year.… Read more »

Time limit for paying tax and land lease extended

Decree 41/2020/ND-CP (Decree 41), dated April 8, 2020 extends the deadline for paying tax and land lease. Question: What are key regulations on Decree 41? Answer: 1. Subjects of application Five groups of… Read more »

Personal Income Tax (PIT) for the payment of the termination of the labor contract

Pham Trang Phuong Dung’s Company (in Hochimimh City) is working to prepare to ceasing operating in Vietnam. She and the company will sign an agreement to terminate the labor contract (previously she signed… Read more »

The principles of land use levy exemption or reduction

Mr Tran Thanh Binh (Kon Tum Province), a retired official,enjoyed, a rank of level 2/4wounded soldier infected with toxic chemicals. He was granted a certificate of losing labor capability 41% to 60%. .He… Read more »

What regulations cover the application of value-added tax to imported goods?

The application of value-added tax (VAT) to imported goods no longer complies with the VAT Tariff promulgated together with Circular No.83/2014 / TT-BTC but complies with the provisions of current documents on value-added… Read more »

Continuing inheritance of the tax incentives of the old business

In case an enterprise converts its business type as prescribed, it may inherit the enterprise income tax incentives for the remaining time after the conversion, if it continues to meet the conditions for… Read more »

Removing import tax refund problems to produce exported goods

Where raw materials and goods are imported for production and processing of exports, it is not a case of goods which are subsequently imported and exported under the provisions of Law No. 106/2016… Read more »

Is payment via affiliated account eligible for tax deduction?

In case the Center is a dependent accounting unit of the Company and has no legal status, if there is a legal authorization document, the voucher of bank transfer from the Center’s account… Read more »

Guidance on target groups that are not subject to VAT

Phana Manufacturing and Trading Co., Ltd (HCMC) specializes in manufacturing tools for people with disabilities. Through the receiving and responding System to proposals of businesses, the Company would like to request to have… Read more »

Shallshared profit be subject to personal income tax?

From January 1, 2015, the shared profit of the individual owner of a one-member limited company after paying corporate income tax is not subject to pay personal income tax. Through the receiving and… Read more »

The charge for granting water exploitation right is different from the tax of water resources

The ABC Company Co., Ltd is known that, according to Decree 82/2017 / ND-CP, the units that exploit underground water must declare and pay charge for granting water exploitation right. The ABC Company… Read more »

Are educational expenditures deductible when calculating taxes?

Ms. Nguyen Thanh Dieu’s school (in Ho Chi Minh City) is a public non-business unit that establishes a center. The center has its own tax code, account and seal. Recently, the center sponsored… Read more »

Do non-governmental aid projects required for tax registration?

Ms. Nguyen Thi Anh (in Hanoi) would like to ask: does the project management unit set up to manage projects using non-governmental aid (having establishment decision, opening bank account) need to do procedures… Read more »

Bonuses for taxable employees?

In case the company pays the employee a bonus, the bonus includes housing, the housing amount included in this bonus is included in the income from salaries and wages but does not exceed… Read more »

Do companies declare VAT quarterly or monthly?

(Chinhphu.vn) – Lu Hoan Viet Software Co., Ltd. (in Ho Chi Minh City) has turnover of 2013, 2014, 2015, 2016 less than VND 50 billion and is subject to quarterly VAT declaration from… Read more »

Value-added tax refund for investment projects

(Chinhphu.vn) – Where Cadana Vietnam Co., Ltd. is a newly established enterprise from an investment project with VAT of goods and services used for investment if it meets the conditions under the guidance… Read more »

Conditions for application of double taxation avoidance agreement

(Chinhphu.vn) – The NYK Line (Vietnam) Co., Ltd. is a joint venture, operating in the field of providing freight agency services by sea. The company has performed shipping agency services at the request… Read more »

How to calculate natural resource tax with quarrying enterprises

(Chinhphu.vn) – Through the receiving and answering system of businesses‘ recommendations, the An Khanh Mineral Joint Stock Company (in Thai Nguyen Province) would  like to request competent agencies to guide how to calculate… Read more »

Paying current taxes when signing construction contracts in other provinces?

(Chinhphu.vn) – The LIFE Construction Co., ltd is based in Hanoi, has no branches or representative offices in other provinces. The company has construction in Hai Phong Industrial Zone, is subject to 0%… Read more »

Does the commune confirm non-agricultural land use tax declaration dossiers?

(Chinhphu.vn) – – According to regulations, for non-agricultural land use tax declaration dossiers of households and individuals, the commune-level People’s Committee shall certify the criteria at the certification of the competent agencies. According… Read more »

Guidances on income tax incentives

(Chinhphu.vn) – Through the receiving and responding system, to recommendations of businesses, the NYK Warehouse (Vietnam) Leasing Co., Ltd. would like to request authorities to guide the determination of corporate income tax incentives… Read more »

How to calculate tax on hospital services

(Chinhphu.vn) – – Mr. Truong Kim Tan’s hospital (in Quang Nam Province) is a joint stock company, it’s premises rentedby outside units to run a canteen service, car care and taxi parking. Revenues… Read more »

Tax and fee levels with combined business model

(Chinhphu.vn) – Tax and fee levels with combined business model Mr. Hoang Nam wants to trade in children’s toys such as board games, chess types such as chess and Chicness chess (imported from… Read more »

Recognizing recommendations on tax policies for destroyed imported goods

Through the system of receiving and responding recommendations of businesses, the Nha Be Garment Corporation – Joint Stock Company proposed to consider amendments and supplements to the Decree No. 134/2016 / ND-CP on… Read more »

How to assess the validity of the partnership?

(Chinhphu.vn) – A valid partnership agreement is a partnership agreement signed and sealed by the legal representative of each partner, and in the partnership agreement, the specific job content must be clearly stated… Read more »