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In June 2021, Vietnam’s Ministry of Finance issued Round No. 40/2021/TT_BTC (Round 40) which offers new tips on private revenue tax (PIT), value-added tax (VAT), and tax administration for companies and people and amends Round No. 40/2021/TT_BTC.
On November 15, 2021, Vietnam’s Ministry of Finance issued Round 100/2021/TT-BTC (Round 100) which amended sure articles beneath Round 40.
A big component of Circulars 40 and 100 surrounds the difficulty of whether or not e-commerce platforms ought to declare and submit taxes from on-line transactions on behalf of companies and people. Additional, Round 40 has set the brink for the annual taxable income for households and people.
What are the provisions beneath Round 40?
Annual taxable income
Enterprise households and enterprise people with annual income of VND 100 million (US$4,364) or much less is not going to be topic to PIT or VAT.
E-commerce gamers now topic to taxation
People incomes an revenue from e-commerce actions or people who present digital services or products, and people having an revenue from the switch of Vietnamese domains of ‘.vn’, at the moment are topic to taxation.
Taxation calculation methodology
Below Round 40, there are three strategies of conducting the calculation and declaration of taxes for people; the periodic declaration methodology; the separate (ad-hoc) methodology; and the presumptive methodology.
The periodic declaration methodology is now relevant to:
- Massive-scale companies; and
- Companies that aren’t thought of large-scale however select to pay tax beneath the declaration methodology.
The standards for large-scale companies are people who have 10 or extra staff and income of VND 3 billion (US$131,160) or extra if they’re within the agriculture sector, and VND 10 billion (US$437,000) or extra in the event that they function in commerce or companies.
Organizations liable for declaring and paying taxes on behalf of people
Round 40 offers that sure revenue paying organizations should declare and pay tax on behalf of companies and households and people within the following circumstances:
- Organizations coming into enterprise cooperation with people;
- Organizations that pay bonuses, commerce reductions, gross sales promotions, or different reductions to enterprise households making use of the presumptive taxation methodology; and
- Organizations which are companions of abroad digital platforms that shouldn’t have a everlasting institution in Vietnam.
What are the amendments beneath Round 100?
Below Round 100, e-commerce organizations are usually not required to declare and pay taxes on behalf of particular person sellers with out authorization.
Additionally, people who have interaction in property leasing with annual rental income of VND 100 million (US$4,364) or much less are additionally not topic to PIT or VAT.
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