[Q&A] #018 - Answering Tax Questions for SMEs

Continuing the series on frequently asked questions about compliance for newly established businesses in Vietnam, let's explore with Van Pham LLC some common tax-related issues:

[Q&A] #018 - Answering Tax Questions for SMEs

11. How to declare and pay Value Added Tax (VAT) monthly/quarterly?

- Monthly declaration: Submit the return by the 20th of the following month

- Quarterly declaration: Submit the return by the 30th of the following quarter

- Tax payment: Within the deadline for submitting the return

- Declare and pay taxes via the tax authority's electronic system

12. How to calculate and pay personal income tax for employees?

- Determine taxable income

- Apply progressive tax rates

- Withhold tax before paying salary

- Pay tax and declare by the 20th of the following month

13. Regulations on quarterly provisional corporate income tax declaration?

- Estimate tax payable based on quarterly business results

- Submit declaration and pay tax by the 30th of the following quarter

- Total provisional tax paid during the year must reach 80% of the tax payable according to the final settlement

14. How to determine deductible expenses when calculating corporate income tax?

- Actual expenses incurred related to business activities

- Have sufficient invoices and documents as required

- Mandatory bank transfer payment for invoices over 20 million VND

15. Procedures for registering and using electronic invoices?

- Choose an e-invoice software provider

- Notify the tax authority about e-invoice issuance. Currently, local tax authorities require the company's legal representative to appear before the tax authority before approving the business's invoice issuance notification

- Use according to regulations, store e-invoice data

16. Regulations on contractor tax for international transactions?

- Applies to foreign contractors without a permanent establishment in Vietnam

- Percentage rate on revenue depends on service type (2-5% for VAT, 0.1-10% for CIT)

- Vietnamese party purchasing goods/using services is responsible for withholding and paying on behalf

17. How to handle errors in tax declarations?

- File supplementary declaration if discovered before the tax authority

- Pay missing tax, fines, and late payment interest (if any)

- Adjust in the next declaration period if the error is minor

18. Process for requesting tax payment extension?

- Submit extension request before the tax payment deadline

- Clearly state reasons, amount of tax requested for extension, requested extension period

- Extension period not exceeding 2 years for tax; not exceeding 1 year for fines

19. How to calculate tax for capital transfer activities?

- Tax rate: 20% on income from capital transfer

- Taxable income = Selling price - Purchase price - Transfer costs

- If purchase price and costs cannot be determined: 1% tax rate on selling price

20. Types of taxes to note for import-export businesses

- Import tax: Businesses must pay import tax on goods brought into Vietnam, with tax rates depending on the HS code of each product. Trade agreements may provide preferential rates.

- Export tax: Usually, Vietnam does not collect export tax on most items, but some products like natural resources (coal, crude oil, minerals) may be taxed.

- VAT: Imported goods are subject to VAT (usually 5% or 10%) paid at customs clearance.

- Special consumption tax: Some special products like alcohol and tobacco are subject to high special consumption tax.

- Customs procedures: Businesses need to complete customs procedures and provide full documentation such as commercial invoices and certificates of origin to calculate and pay taxes correctly.

- Tax incentives: Businesses can enjoy preferential tax rates from trade agreements if goods meet origin regulations.

If you have any questions or need clarification, please kindly comment below.

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