Newly established companies need to prepare a lot of relevant documents to be allowed to operate legally in accordance with the law. Therefore, the newly established company needs to fully implement the tax procedures before the legal deadline so that the tax authorities can control them more strictly. Below, Viet My will send to readers the tax procedures for the newly established company in detail so that individuals and organizations understand the procedures necessary for new businesses.

1. What types of taxes must a newly established enterprise pay?

1.1 Business license fee

Business license fee is the amount of money that an enterprise must pay annually to the tax authority directly managing the enterprise. The fee is calculated based on the charter capital stated in the business registration certificate or registered investment capital, in the investment registration certificate (for organizations) or based on the revenue of the year (for business households and individual businesses).

According to Decree No. 139/2016 of the Government, amended and supplemented by Decree No. 22/2020 of the Government on instructions for declaring and paying business license fees:

The deadline for declaring business license fees is no later than the last day of the month in which the new enterprise starts business operations.

In case the Enterprise has not yet started production and business activities, the deadline for submitting the business license tax declaration is no later than 30 days from the date of receiving the business registration certificate.

Specific business license fee levels:

• Payment level: 2 million VND/year: for enterprises with charter capital or initial investment capital of 10 billion VND or less.
• Payment level: 3 million VND/year: for enterprises with charter capital or initial investment capital of over 10 billion VND.

For branches, representative offices or business locations, public service units, and other economic organizations, the business license fee is 1 million VND/year.

1.2 Corporate income tax

This is a direct tax, levied directly on taxable corporate income, including items such as: Corporate income from production or trading of goods or services and other types of income as prescribed by law.

The formula for calculating corporate income tax is as follows:

Corporate income tax payable = (Taxable income) multiplied by (Tax rate).

In which:

• Taxable income = (Revenue + Other income) – (production and business expenses + Tax-exempt income + Carry-forward losses).
• The tax rate calculated from January 1, 2016 is generally 20%. (Except for enterprises operating in the mining sector, the tax rate is from 32% – 50%). In addition, for some industries with investment incentives to promote the development of that industry, the tax rate is 10% (Industries with tax incentives are specifically regulated by the government in Decree No. 218/2013 of the Government).

1.3 Personal income tax

Personal income tax is the amount of money that must be deducted from the salary and other sources of income of income earners to the Tax Authority to pay into the state budget after deducting deductions.

Personal income tax = Taxable income of personal income tax x Tax rate

In which:

• Taxable income of personal income tax = Taxable income of personal income tax – Family deductions prescribed by law
• Personal income tax rate is prescribed in Article 22 and Article 23 of the Law on Personal Income Tax 2007, amended and supplemented in 2012 and 2014

1.4 Value added tax

Value added tax is an indirect tax and is calculated on the added value of goods and services arising from the production and circulation process until they reach consumers.

Value added tax is calculated by two methods: deduction method and direct method

• Calculating value added tax by deduction method: VAT = Output VAT – Input VAT
• Calculating value added tax by direct method: VAT = VAT of goods x VAT rate of those goods

Value added tax rates are calculated at 0%, 5%, 10% depending on the business item, there will be a corresponding tax rate.

1.5 Import and export tax

Import and export tax is an indirect tax, collected on goods that are allowed to be exported and imported across the border of Vietnam and is independent in the tax law system of Vietnam and other countries in the world.

The formula for calculating import and export tax is as follows:

• Items subject to tax rates as a percentage: Import and export tax payable is equal to the actual quantity of goods exported and imported multiplied by the taxable value per unit multiplied by the import and export tax rate.
• Items subject to absolute tax rates: Import and export tax payable is equal to the actual quantity of goods exported and imported multiplied by the absolute tax rate per unit.

1.6 Resource tax

Resource tax is understood as a type of indirect tax that individuals and organizations must pay to the state when exploiting natural resources.

Resource tax is calculated based on the taxable output of exploited resources, taxable price and tax rate.

1.7 Special consumption tax

Special consumption tax is an indirect tax, levied on certain types of luxury goods and services to regulate the production, import and social consumption of certain special goods. Special goods are luxury goods, expensive goods.

Special consumption tax payers are organizations and individuals that produce, import goods and provide services subject to special consumption tax.

For organizations and individuals engaged in export business activities that purchase goods subject to special consumption tax from production establishments for export but do not export but consume domestically, the organizations and individuals engaged in export business activities are the ones paying special consumption tax.

Special consumption tax payable = Special consumption tax calculation price * Special consumption tax rate

2. Tax procedures for the newly established company

2.1 Register for electronic tax declaration

Registering for electronic tax declaration is one of the important tasks because currently, tax authorities mainly receive electronic tax declarations. Electronic tax declaration will help businesses reduce travel costs and carry out declaration procedures quickly.

When registering for tax declaration, businesses fill in the tax code information and fill in the information of the business.

Note, when registering for electronic tax declaration, businesses must pay attention to fully registering the correct phone number and email information so that the tax authorities can contact and exchange information when necessary.

2.2 Declaration and payment of business license fees

Newly established enterprises will be exempted from business license fees in the first year of establishment or when starting production and business activities (from January 1 to December 31) and must submit the business license fee declaration no later than January 30 of the following year of establishment or starting production and business activities.

2.3 Register for electronic tax payment

To register for electronic tax payment, enterprises must open a bank account with an electronic digital signature before performing this registration activity.

After the enterprise opens a bank account, the enterprise needs to proactively register for electronic tax payment. Electronic tax payment will help enterprises pay taxes quickly and conveniently without having to go to the treasury, bank or state budget collection points.

2.4 Notification of issuance of electronic invoices

For enterprises when there are activities of selling goods, services, giving, donating, promoting…, it is mandatory to issue invoices. To simplify administrative procedures, enterprises now only need to notify the issuance of electronic invoices and after 2 days they can use them immediately upon approval from the tax authority.

2.5 Registration of fixed asset depreciation method

According to Clause 3, 4, Article 13 of Circular No. 45/2013 of the Ministry of Finance guiding on fixed asset depreciation methods:

Newly established enterprises shall decide on their own depreciation methods and fixed asset depreciation periods according to legal regulations and notify the tax authority directly managing them before starting implementation.

2.6 Select accounting regime and declare taxes monthly, quarterly, and annually.

Enterprises need to choose an accounting system suitable for the size of the enterprise and must declare and pay taxes in full. Enterprises must declare taxes from the first quarter of establishment, even during the period when there are no invoices, documents and revenue.

3. Instructions for online corporate tax declaration

Step 1: Log in to the General Department of Taxation’s Electronic Tax System

To log in, you need to insert a digital signature into your computer. Then access the Electronic Tax website. Click on the business section and select Login.

Continue to enter your login account information and click the Login button.

Step 2: Register the declaration to be submitted

Select the Tax Declaration section and select the Declaration Registration section, then click on Register additional declarations to register the declaration to be submitted.

Next, scroll down and find the declaration that the enterprise needs to submit. Then check the square box next to the name of the declaration to be submitted and continue to scroll down, click on “Continue” and click on the “Accept” box.

Step 3: Upload the XML declaration to the tax system

Check “Tax declaration” and click on “Submit XML declaration”. Then, click on “Select declaration file” and upload the declaration saved on your computer to the website. For XML declarations, you need to do this before uploading the declaration to have data uploaded to the system.

Step 4: Submit the declaration

Select “Electronic signature” and enter the PIN code, then click on “Submit declaration”.

Step 5: Look up the results

Select “Tax declaration” and go to “Declaration” to select the type of declaration you want to look up. Then, click on the “Search” box to immediately receive the declaration search results that will appear below.

Thus, newly established enterprises must carry out the procedures when initially reporting taxes to the authorities online.

The above are the findings of Viet My Accounting on Tax procedures for the newly established company in detail. Please contact VIET MY LAW AND ACCOUNTING immediately if you have any further questions about tax procedures or want to contact a unit to do tax procedures for you.