To: Provincial Departments of Taxation

On June 01, 2021, the Ministry of Finance has promulgated the Circular No. 40/2021/TT-BTC providing guidelines on value-added tax, personal income tax and tax administration of household businesses and individual businesses, which comes into force from August 01, 2021. The General Department of Taxation hereby gives its opinions about these issues hereunder:

1. The General Department of Taxation introduces some new regulations on tax administration of household businesses and individual businesses, and organize the implementation of the Circular No. 40/2021/TT-BTC dated June 01, 2021 of the Minister of Finance (further details are provided in the Appendix enclosed herewith).

2. The Information Technology Department is assigned to play the leading role and cooperate with the Tax Administration Department on small- and medium-sized enterprises, household businesses and individual businesses to make application updates which meet requirements and serve the implementation of regulations abovementioned.

3. Directors of provincial Departments of Taxation are requested to disseminate guidelines on value-added tax, personal income tax and tax administration of household businesses and individual businesses laid down in the Circular No. 40/2021/TT-BTC to tax officials and taxpayers, and make best preparations for implementation of these guidelines.

Provincial Departments of Taxation are requested to proactively implement guidelines herein.

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APPENDIX

INSTRUCTION OF SOME NEW REGULATIONS ON VALUE-ADDED TAX, PERSONAL INCOME TAX AND TAX ADMINISTRATION OF HOUSEHOLD BUSINESSES AND INDIVIDUAL BUSINESSES LAID DOWN IN CIRCULAR NO. 40/2021/TT-BTC OF MINISTER OF FINANCE
(Enclosed with the Official Dispatch No. 2626/TCT-DNNCN dated July 19, 2021 of the General Department of Taxation)

1. Scope of Circular: (Article 1)

This Circular provides guidelines for value-added tax (VAT), personal income tax (PIT) and tax administration of household businesses and individual businesses specified in Chapter I and Chapter II of the Circular No. 92/2015/TT-BTC dated June 15, 2015 of the Ministry of Finance.

2. Regulated entities

New regulation 1: Regulated entities (Clause 4 Article 2)

Regulations on individuals transferring Vietnam’s country code top-level domain name (“.vn”) laid down in this Circular apply to both residents and non-residents.

Previous regulation: No guidelines on non-residents are given.

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There are new guidelines on responsibility of organizations to declare and pay tax on behalf of individuals; household businesses and individual businesses performing e-commerce activities, including individuals earning incomes from provision of digital products and/or services as prescribed in the Law on e-commerce.

Previous regulation: Specific guidelines on declaration and payment of tax on behalf of asset lessors and cases of authorization as prescribed in the civil code, individuals engaged in business cooperation with other organizations are available; no specific guidelines on other cases of declaration and payment of tax on behalf of taxpayers. Regulations on household businesses and individual businesses performing e-commerce activities, including individuals earning incomes from provision of digital products and/or services as prescribed in the Law on e-commerce are provided in the Circular No. 92/2015/TT-BTC but not yet elaborated.

3. Definitions

New regulation 3: Definitions (Article 3)

Terms in legislative documents on relevant sectors/fields and some additional terms are construed in this Circular.

Previous regulation: No specific guidelines on this content are available.

4. Household businesses and individual businesses paying tax using declaration method

New regulation 4: Tax calculation methods applied to household businesses and individual businesses paying tax using declaration method (Article 5)

New guidelines on tax calculation methods applied to household businesses and individual businesses paying tax using declaration method are given. To be specific: large-scale household businesses and individual businesses or those that do not meet requirements for large-scale household businesses and individual businesses but select to pay tax using declaration method shall pay tax according to the declaration method; household businesses and individual businesses that pay tax using declaration method shall monthly or quarterly declare tax, and comply with regulations on accounting, invoices and records but shall not be required to prepare tax finalization dossiers; if the taxable revenue determined by a household business is found to be false, the tax authority shall impose taxable revenue as prescribed in Article 50 of the Law on tax administration.

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New regulation 5: Tax declaration dossiers prepared by household businesses and individual businesses paying tax using declaration method (Article 11; Clause 4 Article 5)

New guidelines on tax declaration dossiers prepared by household businesses and individual businesses paying tax using declaration method are provided. Accordingly, each of household businesses and individual businesses paying tax using declaration method shall prepare and submit a tax declaration dossier which consists of Form No. 01/CNKD enclosed with the Circular and Form No. 01-2/BK-HDKD which indicates information about receipt, dispatching and inventory of materials, devices, products, goods/groups of goods in the period, and incurred expenses associated with revenue in the period as the basis for tax authorities to perform risk-based tax management.

Household businesses and individual businesses engaged in business lines that have the basis for determination of revenue as certified by competent authorities are not required to do accounting and provide Form No. 01-2/BK-HDKD. Business lines that have the basis for determination of revenue as certified by competent authorities include production of solar power, provision of cruise ship services with prices and coordination activities are managed by local competent authorities, and other similar activities. Tax authorities shall cooperate with competent authorities to determine local business lines from which revenue can be determined and thus, determine income payers, household businesses and individual businesses engaged in such business lines that shall pay tax using declaration method but shall not be required to do accounting and provide Form No. 01-2/BK-HDKD. Household businesses and individual businesses engaged in such business lines shall only make monthly/quarterly tax declaration using Form No. 01/CNKD and provide enclosed documents (including invoices, records and other documents) to determine revenue earned from business activities in the period, which are issued by income payers or local competent authorities.

Previous regulation: No specific guidelines on this content are available.

New regulation 6: Receiving authorities, deadlines for submission of tax declaration dossiers, and tax payment deadlines (Article 11)

Additional guidelines on receiving authorities, deadlines for submission of tax declaration dossiers and deadlines for tax payment made by household businesses and individual businesses paying tax using declaration method are provided. To be specific:

- Household businesses shall submit tax declaration dossiers to their supervisory Sub-departments of taxation of areas where they run business.

- Tax declaration dossiers shall be submitted by the deadline for submission of monthly or quarterly tax declaration specified in Article 44 of the Law on tax administration.

- Tax payment shall be made by the same deadline for submission of tax declaration dossier. In case of modification of a tax declaration dossier, the tax payment deadline shall be the deadline for submission of tax declaration documents of the period in which errors occur.

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New regulation 7: Tax declaration in case of business suspension (Clause 5 Article 11)

New guidelines on tax declaration in case of business suspension are provided. To be specific: If a household business or individual business suspends its business, it shall be required to notify its supervisory tax authority as prescribed in Article 91 of the Government’s Decree No. 01/2021/ND-CP dated November 04, 2021, Article 4 of the Government’s Decree No. 126/2020/ND-CP dated October 19, 2020, and Article 12 of the Circular No. 105/2020/TT-BTC dated December 03, 2020 of the Ministry of Finance, except cases where the business suspension period is less than a month or a quarter.

Previous regulation: No specific guidelines on this content are available.

5. Separate tax payment

New regulation 8: Entities making separate tax declaration (Clause 2 Article 6)

Entities making separate tax declaration also include:

- Individuals that are private construction contractors;

- Individuals that transfer Vietnam’s country code top-level domain name (“.vn”);

- Individuals that earn incomes from digital information products and/or services and do not pay tax using declaration method.

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New regulation 9: Receiving authorities of tax declaration dossiers submitted by entities making separate tax payment (Clause 2 Article 12)

Amendments to regulations on receiving authorities of tax declaration dossiers are provided. To be specific: individual businesses that pay tax separately shall submit tax declaration dossiers to the following tax authorities:

- In case of mobile business, the tax declaration dossier shall be submitted to the Sub-department of taxation of area where the taxpayer carries business activities.

- In case an individual earns incomes from provision of digital information products and/or services, the tax declaration dossier shall be submitted to the Sub-department of taxation of area where he/she (permanently or temporarily) resides.

- In case an individual earns incomes from transfer of Vietnam’s country code top-level domain name (“.vn”), the tax declaration dossier shall be submitted to the Sub-department of taxation of area where he/she resides. If the transferor is a non-resident, the tax declaration dossier shall be submitted to the supervisory tax authority of the organization in charge of managing Vietnam’s country code top-level domain name (“.vn”).

- In case the taxpayer is a private construction contractor, the tax declaration dossier shall be submitted to the Sub-department of taxation of area where construction activities are carried out.

Previous regulation: According to Clause 3 Article 7 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, a mobile vendor (or merchant trader) shall submit tax declaration dossiers to Sub-department of taxation where he/she applies for business registration, and tax declaration dossiers in other cases shall be submitted to the Sub-department of taxation of area where the taxpayer (permanently or temporarily) resides.

6. Household businesses and individual businesses paying presumptive tax

New regulation 10: Retention of documents proving the legitimacy of goods or services of presumptive tax payers that apply for issuance or sale of separate invoices (Article 7)

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Previous regulation: No specific guidelines on this content are available.

New regulation 11: Use of invoices by presumptive tax payers (Clause 2 and Clause 4 Article 7)

Presumptive tax payers shall use invoices separately issued or sold by tax authorities instead of booked invoices. A presumptive tax payer that decides to use a unique tax calculation method until the end of the tax period 2021 according to Clause 4 Article 20 of this Circular shall also stably use invoices until the end of the tax period 2021.

Previous regulation: According to Point a Clause 2 Article 2 and Clause 3 Article 6 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, presumptive tax payers shall use both separately issued invoices and booked invoices.

New regulations 12: Tax declaration dossiers submitted by presumptive tax payers that use separately issued or sold invoices (Point c Clause 2 Article 13)

New guidelines on presumptive tax payers’ use of invoices separately issued or sold by tax authorities are provided. To be specific:

- The tax declaration form No. 01/CNKD enclosed with this Circular;

- Copy of the economic contract for provision of goods/services in the same business lines as those of the presumptive tax payer;

- Copy of the contract finalization record;

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The tax authority is entitled to request the taxpayer to present the original copies of these documents for verification purpose.

Previous regulation: Individual businesses that pay tax separately are required to submit these tax declaration dossiers according to Clause 2 Article 7 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015.

New regulation 13: Deadlines for submission of tax declaration dossiers (Point b Clause 3 Article 13)

If a household or individual business changes from payment of tax using declaration method to payment of presumptive tax, or vice versa, the tax declaration dossier (or presumptive tax declaration form) shall be submitted within 10 days from the day on which such change occurs.

Previous regulation: No specific guidelines on this content are available.

New regulation 14: Change of revenue and presumptive tax (Point b Clause 4 Article 13)

Amendments to regulations on change of revenue and presumptive tax are provided. Accordingly, if a presumptive tax payer applies for change of its revenue and presumptive tax payable in the year due to changes in its business operations, the tax authority shall consider changing the presumptive tax as prescribed in Cause 3 Article 51 of the Law on tax administration from the day on which such business changes occur. To be specific:

- If the presumptive tax payer changes its business scale (business area, number of employees or revenue earned), the Form No. 01/CNKD enclosed herewith must be submitted. Based on the tax declaration dossier submitted by the presumptive taxpayer and its database, if the presumptive revenue varies by 50%, or over, the tax authority shall issue a Notice (using Form No. 01/TB-CNKD enclosed with the Government's Decree No. 126/2020/ND-CP dated October 19, 2020) of change of presumptive tax from the day on which the change occurs in the tax year. Based on its database and verified data/figures, if the tax authority determines that the presumptive tax payer fails to satisfy the conditions for change of its presumptive tax, the tax authority shall issue a notice of refusal to change the presumptive tax (using Form No. 01/TBKDC-CNKD enclosed herewith).

- If the presumptive tax payer changes its business lines (even if the tax rate is kept unchanged), the presumptive tax payer shall follow procedures for changes in tax registration information as prescribed (if business lines are changed), and submit the tax declaration form No. 01/CNKD enclosed herewith. Based on processing results of application for changes in tax registration information (if any), the tax declaration dossier submitted by the presumptive taxpayer and its database, the tax authority shall issue a Notice (using Form No.01/TB-CNKD enclosed with the Government's Decree No. 126/2020/ND-CP dated October 19, 2020) of change of presumptive tax (if any) from the day on which the change occurs in the tax year.

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+ If the approved shutdown begins from the first day of month, the presumptive tax must not be paid from that month. If the approved shutdown begins from any day of the period from the 02^nd to the 15^th day of the month, the presumptive tax payable in that month shall be reduced by 50% and must not be paid from the following month afterwards. If the approved shutdown begins from any day of the period from the 16^th day to the end of the month, the presumptive tax of that month must be paid in full and must not be paid from the following month afterwards.

+ If the approved business suspension duration is a full month, the presumptive tax of that month must not be paid. If the approved business suspension duration is at least 15 consecutive days of a month, the presumptive tax payable of that month shall be reduced by 50%.

+ The shutdown date or business suspension duration shall be determined according to the taxpayer’s notice. If the taxpayer fails to give notice or gives a late notice (including cases of force majeure events), the tax authority shall determine the shutdown date or business suspension duration based on verification results.

- If a presumptive tax payer shuts down or suspends business at the request of a competent authority, the tax authority shall, based on the competent authority’s request for shutdown or business suspension, change the presumptive tax payable.

- If a presumptive tax payer changes to pay tax using declaration method, the presumptive tax payer shall submit the presumptive tax declaration form No. 01/CNKD enclosed herewith. Based on the received tax declaration form, the tax authority shall adjust the presumptive tax according to the tax declaration form.

Previous regulation: According to Point c Clause 4 and Point a Clause 11 Article 6 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, only guidelines on change of revenue and presumptive tax in the following cases are available, including: the revenue earned by a presumptive tax payer varies by 50%, or over; the presumptive tax is changed due to changes in business operations of the presumptive tax payer; the presumptive tax payer shuts down or suspends for a full month. No specific guidelines on other cases are given.

New regulation 15: Disclosure of information sheet form No. 01/CKTT-CNKD (Point c Clause 5 Article 13 and Point a.2 Clause 8 Article 13)

If the information sheet form No. 01/CKTT-CNKD has been published on the website of the tax authority, the tax authority shall not be required to print and send it to each presumptive tax payer.

Previous regulation: According to Point c Clause 5 and Point a.1 Clause 9 Article 6 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, the information sheet shall be sent to individuals in each area, including both individuals who have to pay tax and who do not. If the market, street, and neighborhood that has 200 individual businesses or fewer, the Sub-department of taxation shall print and send the information sheet to every individual business. If the market, street, or neighborhood has more than 200 individual businesses, the Sub-department of taxation shall print and send the information sheet to not more than 200 individual businesses. If the market has more than 200 individual businesses, the Sub-department of taxation shall print and send the information sheet to each individual business by their business lines.

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New regulation 16: Determination of revenue of not exceeding VND 100 million/year as the basis for exemption from tax payment in the year (Point c Clause 1 Article 9)

The regulation on the revenue of not exceeding VND 100 million/year as the basis for exemption from tax payment in the year is amended. Accordingly, a lessor who earns revenue in fewer than 12 months in the calendar year and a monthly average revenue of VND 8,34 million or fewer shall not be required to make tax declaration. If a lessor earns revenue in fewer than 12 months in the calendar year and a monthly average revenue of more than VND 8,34 million, he/she must declare and pay tax in that year even if he/she chooses to declare tax annually and submit the tax declaration dossier by December 31 of the tax year. If a lessor who chooses to declare tax annually and submit the tax declaration dossier after December 31 of the tax year earns a total revenue of VND 100 million or fewer, he/she must not pay tax. If a lessor has paid tax during a year and determines that his/her total revenue earned during the year is VND 100 million or fewer, he/she shall provide documents proving such revenue and requests for tax refund or deduction of overpaid tax from the tax amounts payable in the following period in accordance with regulations of the Law on tax administration.

Previous regulation: According to Point b Clause 1 Article 4 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, the revenue of not exceeding VND 100 million/year as the basis for exemption from tax payment in case the taxpayer earns revenue in fewer than 12 months in the calendar year is the revenue actually earned from property lease in the calendar year.

New regulation 17: Deadline for submission of tax declaration dossiers by property lessors (Point a Clause 3 Article 14)

If a property lessor declares tax separately on each rent payment, the tax declaration dossier shall be submitted within 10 days from the beginning date of the lease term. If the lessor declares tax annually, the tax declaration dossier shall be submitted by the last day of the first month of the succeeding year.

Previous regulation: According to Point d Clause 1 Article 8 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, the taxpayer that declares tax on each payment shall submit the tax declaration dossier by the 30^th day of the quarter following the quarter in which the lease term begins, and the taxpayer that declares tax annually shall submit the tax declaration dossier within 90 days from the end of the calendar year.

New regulation 18: Receiving authorities of tax declaration dossiers submitted by residents who lease real estate abroad, and individuals leasing out property other than real estate in Vietnam (Point a Clause 2 Article 14)

Regulation on receiving authorities of tax declaration dossiers is amended. Accordingly, an individual that leases property other real estate in Vietnam shall submit the tax declaration dossier to the Sub-department of taxation of area where he/she resides. Thus, a resident in Vietnam who leases out real estate in a foreign country shall submit the tax declaration dossier to the Sub-department of taxation of area where he/she resides, and an individual that leases property other real estate in Vietnam shall also the tax declaration dossier to the Sub-department of taxation of area where he/she resides.

Previous regulation: According to Point c Clause 1 Article 8 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, the tax declaration dossier shall be submitted to the Sub-department of taxation of area where the leased property is located.

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New regulation 19: Tax declaration dossiers (Point b Clause 1 Article 15)

An annual tax declaration dossier submitted by a lottery agent, insurance agent, MLM agent or individual performing other business activities subject to annual tax declaration includes:

- The tax declaration form No. 01/TKN-CNKD enclosed herewith (applicable to an individual who signs a contract to work as a lottery agent, insurance agent, or MLM agent or perform other business activities, and has not yet deducted and paid tax in the year);

- Copy of the economic contract (for provision of goods/services, business cooperation or performance of agent activities);

The tax authority is entitled to request the taxpayer to present original copies of these documents for verification purpose.

Previous regulation: According to Point b Clause 3 Article 9 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, the annual tax declaration dossier submitted by a lottery agent, insurance agent or MLM agent that declares tax annually shall only include the tax declaration form No. 01/TKN-XSBHDC.

9. Organizations and individuals paying tax on behalf of others

New regulation 20: Organizations responsible for declaring and paying tax on behalf of other individuals (Points b, c, d, dd Clause 1 Article 8)

Organizations shall assume responsibility to declare and pay tax on behalf of individuals in the following cases:

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- An organization pays bonuses, sales compensation, promotions, commercial discounts, payment discounts, supports in cash or not in cash, compensations for breach of contract, and other compensations for presumptive tax payers. Household or individual business shall assume responsibility for their information about tax calculation method provided for the organization to declare and pay tax if they are a presumptive tax payer. The tax authority shall, based on database on tax declaration, invoices and records of taxpayers, take appropriate risk management methods in this case.

- An organization in Vietnam is a partner of an overseas digital platform provider (that does not have a permanent establishment in Vietnam) and pays incomes to an individual for digital information products and/or services under an agreement signed with that overseas digital platform provider;

- An organization is the owner of an e-commerce platform, declares and pays tax on behalf of individuals according to the tax authority’s roadmap. Based on the information provided by owners of e-commerce platforms about individuals that sell goods on their platforms, the General Department of Taxation shall establish a centralized database which shall be used by supervisory tax authorities of household businesses and individual businesses for managing tax and taking actions against violations (if any).

Previous regulation:

- With regard to organizations that pay bonuses, sales compensation, promotions, commercial discounts, payment discounts, supports in cash or not in cash, compensations for breach of contract, and other compensations before the effective date of this Circular, the General Department of Taxation has given specific Official Dispatches to request them to declare and pay tax on behalf of individuals regardless of payment of presumptive tax or tax payment using declaration method (because there is no regulation that household businesses and individual businesses must pay tax using declaration method).

- According to the Circular No. 219/2013/TT-BTC dated December 31, 2013 and the Circular No. 92/2015/TT-BTC dated June 15, 2015, the General Department of Taxation has promulgated some Official Dispatches stipulating that organizations shall not deduct, declare and pay tax on behalf of individuals in case of commercial discounts.

New regulation 21: Determination of revenue of not exceeding VND 100 million/year as the basis for tax exemption in case organizations declare and pay tax on behalf of individuals (Clause 3 Article 8)

In case an individual earns revenue of not exceeding VND 100 million at multiple locations or an individual estimates or determines that total revenue earned exceeds VND 100 million/year, he/she may authorize the paying organization to declare and pay tax on the revenue generated at the authorized unit in the tax year. In case a presumptive tax payer also receives bonuses, sales compensation, promotions, commercial discounts, payment discounts, assistance in cash or not in cash, compensations for breach of contract, other compensations in addition to their presumptive revenue, the paying organization shall declare and pay tax on actual payments made in the tax year on behalf of the individual. In case an organization declares and pays tax on behalf of a property lessor, the revenue of not exceeding VND 100 million/year as the basis for tax exemption shall be determined in accordance with Point c Clause 1 Article 9 of this Circular.

Previous regulation: No specific guidelines on this content are available.

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Regulation on tax periods applied to organizations declaring and paying tax on behalf of property lessors is amended. Accordingly, an organization may declare and pay tax on behalf of property lessors monthly, quarterly, separately or annually.

Previous regulation: According to Point d Clause 2 Article 8 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, an organization shall declare and pay tax on behalf of a property lessor in the same manner as an individual directly declaring tax. Accordingly, tax declaration may be made on each payment or annually.

New regulation 23: Tax declaration dossiers submitted by organizations declaring and paying tax on behalf of individuals (Point a Clause 1 Article 16)

There is a new regulation that a tax declaration dossier prepared and submitted by an organization declaring and paying tax on behalf of an individual in case the individual has business cooperation with the organization, the organization pays bonuses, sales compensation, promotions, commercial discounts, payment discounts, assistance in cash or not in cash, compensations for breach of contract, or other compensations to an individual, the organization is the owner of an e-commerce platform, or the organization in Vietnam is a partner of the overseas digital platform provider (without permanent establishment in Vietnam) includes:

- The tax return form No. 01/CNKD enclosed herewith;

- Form No. 01-1/BK-CNKD enclosed herewith (applicable to organizations and individuals declaring and paying tax on behalf of other individuals; individuals having business cooperation with organizations; organizations paying individuals who achieve sales targets; organizations are owners of e-commerce platforms; organizations in Vietnam that are partners of overseas digital platform providers);

- Copy of the business cooperation contract (for the first declaration of the contract). The tax authority is entitled to request the taxpayer to present original copies of these documents for verification purpose.

Previous regulation: No specific guidelines on this content are available.

10. Responsibility of tax authorities for tax administration of household businesses and individual businesses

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Responsibilities of General Department of Taxation for tax administration of household businesses and individual businesses include:

1. Establish risk criteria applied to household businesses and individual businesses.

2. Provide detailed guidance on update of the database about household businesses and individual businesses at Provincial Departments of Taxation and Sub-departments of taxation.

3. Supervise tax authorities and taxpayers implementing tax policies and tax administration of household businesses and individual businesses.

4. Organize the use of electronic invoices with codes of tax authorities by household businesses and individual businesses following the established roadmap. Cooperate with Provincial People’s Committees in implementing the scheme for use of electronic invoices generated by cash registers that transmit data to tax authorities. Develop the database on electronic invoices with codes of tax authorities to serve risk-based tax administration of household businesses, individual businesses, relevant organizations and individuals.

Previous regulation: No specific guidelines are available.

New regulation 25: Responsibilities of Provincial Departments of Taxation (Article 18)

Regulation on responsibilities of Provincial Departments of Taxation is amended. Accordingly, Provincial Departments of Taxation shall implement the plan for inspection of Sub-departments of taxation and taxpayers and submit reports thereof to the General Department of Taxation. The inspection plan shall be implemented as follows:

- Provincial Departments of Taxation shall carry out annual inspection of at least 10% of the number of Sub-departments of taxation in accordance with regulations on risk management in determination of estimated presumptive revenue and presumptive tax. The inspection results produced by Provincial Departments of Taxation are the basis for Sub-departments of taxation to prepare and approve its tax registers.

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- Inspection contents: inspection of management database; comparison of business registration and taxpayer registration information; field inspection of at least 2% of the household businesses, individual businesses and relevant organizations in the area. 100% of the high-risk household businesses and individual businesses shall be inspected as per regulations.

Previous regulation: According to Clause 8 Article 6 of the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, Provincial Departments of Taxation shall direct and control the making of tax registers of Sub-departments of taxation with the inspection percentage as follows: at least 20% of Sub-departments of taxation shall be inspected in terms of adherence to regulations on risk management of determination of presumptive revenues and presumptive taxes; at least 10% of the Sub-departments of taxation shall be inspected in the first, second, and third quarter; at least 15% of local individual businesses shall be inspected.

11. Tariff schedules

New regulation 26: VAT and PIT tax rates applied to presumptive tax payers on their received amounts of bonuses, sales compensation, promotions, commercial discounts, payment discounts, support in cash or not in cash (in Section 1 of the tariff schedule enclosed with Appendix I)

1% VAT and 0,5% PIT shall be imposed on bonuses, sales compensation, promotions, commercial discounts, payment discounts, support in cash or not in cash received by presumptive tax payers. If the abovementioned amounts meet requirements for tax exemption as prescribed by the Law on value-added tax, only 0,5% PIT shall apply.

Previous regulation:

- According to Section 4 of the tariff schedule enclosed with the Ministry of Finance’s Circular No. 92/2015/TT-BTC dated June 15, 2015, these activities shall be subject to the same PIT rate as 1% imposed on other business activities.

- According to Clause 22 Article 7 of the Ministry of Finance’s Circular No. 219/2013/TT-BTC dated December 31, 2013, if the business establishment offers a discount, the taxable price is the discounted price. Based on the adjusted invoices, the seller and the buyer shall declare adjusted their revenues, input and output taxes for re-determining VAT payable by the seller and taxable income of the buyer. However, if a presumptive tax payer receives commercial discount but does not adjust input tax for re-determining taxable income due to stable payment of presumptive tax, this income must be declared and subject tax payment. Because no specific guidelines on this content are available, the organization paying commercial discount to the presumptive tax payer has not yet declared and paid PIT on behalf of the presumptive tax payer. According to the Government’s Decree No. 126/2020/ND-CP dated October 19, 2020 and guidelines herein, the organization paying commercial discount shall declare and pay 0,5% PIT on behalf of the presumptive tax payer.

New regulation 27: addition of business lines exempt from VAT exemption or subject to 0% VAT as prescribed in the Law on value-added tax to the tariff schedule (Sections 1, 2, 3 of the tariff schedule enclosed with Appendix I)

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Previous regulation: Because there are no specific guidelines on this content, 1% PIT imposed in all cases shall be imposed on other business lines specified in Section 4 of the tariff schedule enclosed with the Circular No. 92/2015/TT-BTC.

New regulation 28: addition of service provisions and construction exclusive of building materials (section 2 of the tariff schedule enclosed with Appendix I)

Advertising on digital information products and/or services shall be subject to 5% VAT and 2% PIT; other services subject to 10% VAT under the credit-invoice method shall be subject to 5% VAT and 2% PIT.

Previous regulation: No specific guidelines on this content are available.

New regulation 29: Addition of business cooperation with an organization that has the responsibility to declare VAT on the entire revenue earned from the business cooperation to the tariff schedule (Sections 1, 2, 3 of the tariff schedule enclosed with Appendix I)

The business cooperation in each business line with an organization that has the responsibility to declare VAT on the entire revenue earned from the business cooperation shall be added to the tariff schedule.

Previous regulation: No specific guidelines on this content are available.

New regulation 30: addition of compensation for breach of contract, other compensations to the tariff schedule (Sections 1, 2 of the tariff schedule enclosed with Appendix I)

Compensation for breach of contract, other compensations in the field of distribution and provision of goods shall be subject to 0,5% PIT; those in the field of service provisions and construction exclusive of building materials shall be subject to 2% PIT.

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12. Forms

a) Documents submitted by taxpayers to tax authorities

- Form No. 01-2/BK-HDKD enclosed with Form No. 01/CNKD (applicable to household business or individual business paying tax using declaration method).

- Form No. 01-2/BK-TTS enclosed with Form No. 01/TTS (applicable to organizations and individuals that declare and pay tax on behalf of property lessors).

b) Documents and notices of tax authorities

- Notice form No. 01/TBKDC-CNKD (issued to a presumptive tax payer that fails to meet requirements for change of the presumptive tax)

Previous regulation: No specific guidelines on this content are available.