In the context of the e-commerce market in Vietnam is growing strongly, the opportunity to make profit from this activity is also increasing. For online sellers, pay business tax online is a requirement according to regulations. To know more about the taxes that need to be paid, please refer to the regulations on how to calculate and pay online business tax introduced by VIET MY LAW AND ACCOUNTING below.

1. How much revenue must be taxed for online business households?

Based on the provisions of Article 4 of Circular 40/2021/TTBTC on the principles of applying personal income tax (PIT) and value added tax (VAT) to business households and individuals as follows:

• Business households with revenue from production and business in the calendar year not exceeding VND 100 million will not be subject to VAT and personal income tax according to the provisions of law on these two types of taxes.
• Business households must commit to declare taxes correctly, honestly, completely and submit tax records on time; they are responsible before the law for the correctness, honesty, and completeness of tax records according to regulations.

In the case of business households organized in the form of groups of individuals or households, the determination of the sole representative of the group of individuals or households does not need to pay VAT and personal income tax if the revenue does not exceed VND 100 million/year. According to regulations, only one person in the group of individuals or households in the tax year.

2. Instructions for pay business tax online business license fee

Business households and individual business households must comply with the regulations on the obligation to pay the Business License Fee as stipulated in Decree No. 22/2020/NDCP dated February 24, 2020 of the Government and Circular No. 65/2020/TTBTC dated July 9, 2020 of the Ministry of Finance, details as follows:

• Business households must pay the Business License Fee except for the following cases exempted from the Business License Fee: business households with revenue not exceeding VND 100 million/year; business households that do not operate regularly and do not have a fixed business location; business households that have just started production and business activities are exempted from the Business License Fee in the first year.
• The Business License Fee collection rates applicable to business households are as follows:
  1. Revenue over VND 500 million/year: VND 1,000,000/year.
  2. Revenue from 300 to 500 million VND/year: 500,000 VND/year.
  3. Revenue from 100 to 300 million VND/year: 300,000 VND/year.
• Business households (including contract households, declaring households and individuals leasing assets) do not need to submit Business License Fee declarations; Tax authorities will rely on tax declarations and tax management databases to determine total revenue in 2021 from sources and business locations as a basis for calculating Business License Fees in 2022 and notify taxpayers.
• Business households pay Business License Fees according to the tax authority’s notice. For households that have been stable since the beginning of the year, the deadline for paying Business License Fees is before January 30 and the tax authority’s notice is no later than January 20 every year; For households starting a new business, the deadline for paying the Business License Fee is before July 30 (if starting a business in the first 6 months of the year) or before January 30 (if starting a business in the last 6 months of the year) and the notification from the tax authority is no later than the 20th of the month following the month of starting a business.

3. Paying VAT and PIT for online business households

Individuals and households doing online sales with revenue of over VND 100 million in a calendar year can choose one of three methods to declare taxes: the declaration method, the tax declaration method for each occurrence, or the lump-sum method, to ensure accuracy and compliance with the provisions of Circular 40/2021/TT-BTC.

The amount of VAT and PIT payable is calculated based on the following formulas:

• VAT payable = Revenue subject to VAT x VAT rate
• PIT payable = Revenue subject to PIT x PIT rate

In which:

• Revenue subject to VAT and PIT for individuals and households doing online sales includes the total value of transactions including taxes of all types of goods, services or other income such as sales, processing fees, commissions, and promotions, discounts, and subsidies.
• VAT and PIT rates are calculated based on specific regulations in Appendix I of Circular 40/2021/TT-BTC, applicable to each field and industry.

Refer to specific regulations in the following documents:

• Circular 40/2021/TT-BTC
• Decree 52/2013/ND-CP
• Circular 302/2016/TT-BTC
• Circular 65/2020/TT-BTC.

4. Can I pay business tax online?

According to the 2019 Tax Administration Law, tax is a mandatory payment to the state budget by organizations, households, business households, and individuals according to the provisions of tax laws. Taxpayers must fully pay the tax amount, late payment fees, fines for tax law violations, and other revenues belonging to the state budget.

According to Clause 1, Article 56 of the 2019 Tax Administration Law, taxpayers can pay taxes at the following locations:

• At the State Treasury;
• At the tax administration agency where they submit tax declarations;
• Through organizations authorized by the tax administration agency to collect taxes;
• Through commercial banks, other credit institutions, and service organizations as prescribed by law.

This allows pay business tax online to pay directly at the above locations or make online payments online. Online tax payment is a method that allows agencies, organizations and individuals to fulfill their tax payment obligations to the state budget online via the internet.

5. Procedures for paying taxes for business households online

Taxpayers voluntarily register to pay taxes for business households online electronically when they meet the following conditions:

• First, they must be an organization or enterprise that has been granted a tax code or enterprise code and is in operation.
• Second, they need a digital certificate issued by an organization providing public digital signature certification services and is still valid.
• Third, they must have an Internet connection and a stable email address to contact the tax authority.
• Fourth, they are performing electronic tax declaration on the tax authority’s electronic information portal.
• Finally, they need to have an account at a commercial bank.

In the current situation, taxpayers who want to use this service must have an account at at least one bank that has coordinated with the General Department of Taxation to provide the service and is under the management of tax departments and tax branches nationwide.

6. Instructions for pay business tax online

Today, doing business in the form of business households is not widely applied, which leads to few people understanding the related procedures. Therefore, business households often encounter difficulties when having to declare and pay taxes, and also do not know the appropriate way to comply with legal regulations and avoid unnecessary risks or being fined for tax violations.

6.1. Registering to pay business tax online

The process of registering to pay taxes electronically is carried out in the following steps:

Step 1: Access the website of the General Department of Taxation via the link thuedientu.gdt.gov.vn. Then, select “register” to proceed with the process of registering to pay taxes electronically.

Step 2: Register for a tax payment account by entering the tax code and verification code provided by the system. Next, select the individual or organization corresponding to the tax code and click the “register” button.

Step 3: Fill in all the information to register for a tax payment account according to the required fields. Note, if there is no confirmation code from the tax authority, this information section will be left blank. If there is a confirmation code, the information must match the code that has been issued.

Step 4: Complete the online business tax registration after checking the declared information. The system will display the transaction declaration with the tax authority via electronic means. Taxpayers need to carefully check the information before clicking “complete registration”.

Step 5: Complete the online business tax registration procedure via electronic transactions. In case the confirmation code has been entered, a successful registration notification will be sent to the email and the password will be sent to the registered phone number. In case the confirmation code has not been entered, the taxpayer needs to go to the nearest tax office to complete the registration, provide information and sign the registration form provided by the tax officer.

6.2. Paying business tax online

The process of paying taxes online is carried out in the following steps:

Step 1: Access the website thuedientu.gdt.gov.vn and log in to the system.

Step 2: Then, select “Pay taxes”, followed by “Create payment slip” and select the currency (VND/USD), then enter information about the bank name and account number, as well as select information about the tax authority.

Step 3: Select information about the Treasury and the Treasury Bank, then select the tax type and tax period, and finally select the tax item to be paid.

Step 4: Select the item to be paid, then perform a search and select the appropriate sub-item.

Step 5: Fill in the amount of tax to be paid and select “Complete”.

Step 6: Check the information on the payment slip again, then select “Sign and pay”, enter the PIN and wait for confirmation of successful signing.

Step 7: Next, select “Pay Tax”, then “Look up payment slip”, enter the date of payment slip creation and select “Look up”. If the status “Tax payment successful” is displayed, the tax payment process has been completed.

Above is information about pay business tax online. If you have difficulty in the tax declaration and payment process, please contact VIET MY LAW AND ACCOUNTING for the fastest support.