Guidance for quarterly tax reports in Vietnam

Enterprises are responsible for preparing tax finalization reports and submitting them to tax authorities following regulations and are fully responsible for the law about the data they report. Therefore, tax reporting plays an extremely important role, and preparing quarterly tax reports is of interest to many enterprises. To answer the client’s questions, Viet An Law Firm provides an article on guidance for quarterly tax reports in Vietnam below.

Legal basis

• Law on Tax Administration 2019;
• Law on Personal Income Tax, as amended and supplemented in 2012, 2014, 2020;
• Circular No. 119/2014/TT-BTC on reformation and simplification of tax administrative procedures, as amended and supplemented by Circular No. 80/2021/TT-BTC;
• Circular No. 92/2015/TT-BTC guiding the implementation of value added tax and personal income tax for resident individuals with business activities, as amended and supplemented by Circular No. 80/2021/TT-BTC;
• Decree No. 12/2023/ND-CP on extending the deadline for paying value added tax, corporate income tax, personal income tax, and land rent in 2023;
• Circular No. 151/2014/TT-BTC on amending and supplementing several articles in Decrees regulating taxes;
• Decree 123/2020/ND-CP prescribing invoices and records.

What is the tax reporting?

Tax reporting is understood as an activity that declares and submits all taxes prescribed by the state. For example: Value added tax, license tax, personal income tax, corporate income tax, import and export tax,…

Besides, tax reports also act as a bridge between tax administration agencies and enterprises. The tax reporting help tax administration agencies grasp the current operating situation of enterprises. Therefore, the tax reporting plays an extremely important role and have a specific deadline for submission, the information in the report needs to be checked in detail and careful.

All enterprises engaged in trading, manufacturing and providing services must be reported taxes. However, depending on the revenue of each enterprise, the tax reporting period of each enterprise is different.

Preparing the quarterly tax report

Value Added Tax (VAT)

For the VAT, it is first necessary to determine whether the enterprise declares using the deduction method or the direct method. Normally, enterprises with revenue over 1 billion VND will have to apply the tax declaration using the deduction method or can volunteer.

If an enterprise declares the VAT using the deduction method, it will have to collect all arising records such as invoices, receipts, payments, contracts… related to the VAT. Check that those records are legal or not. If legal, making a declaration according to form No. 01/GTGT ​​specified in Circular No. 119/2014/TT-BTC of the Ministry of Finance.

Besides, for newly established enterprises that receive the contributed capital in fixed assets, invest in purchasing machinery, equipment, tools, or have a turnover of less than 1 billion VND, that enterprise must declare the VAT using the direct method.

In particular, the VAT payable is calculated on revenue. Each different type of production will have different calculations. After calculating, we will make a declaration according to form No. 04/GTGT ​​specified in Circular No. 119/2014/TT-BTC of the Ministry of Finance and proceed to pay taxes. The tax payment deadline is no later than the 30^th of the first month of the following quarterly.

Declaring the VAT using the deduction method

For the VAT declaration using the deduction method, enterprises need to prepare documents including:

• The VAT declaration according to form 01/GTGT;
• List of VAT invoices according to 2 forms 01-1/GTGT ​​and 01-2/GTGT;
• Attached appendix (if any);

Declaring the VAT using the direct method

For the VAT declaration using the direct method, enterprises need to prepare documents including:

• Directly according to VAT: VAT declaration according to form 03/GTGT;
• Directly arcording to the revenue: VAT declaration according to form 04/GTGT;
• List of the output VAT invoice declaration according to form 04-1/GTGT.

Personal income tax (PIT)

The PIT declaration is a mandatory declaration that enterprises must perform. Declaring the quarterly PIT does not meet the condition: the monthly PIT amount must be greater than 50 million/a month. The PIT declaration is based on the VAT declaration form. Specifically, if an enterprise declares the quarterly VAT, the PIT will also be declared the quarterly tax.

According to Circular No. 151/2014/TT-BTC of the Ministry of Finance, enterprises that are subject to the PIT must declare the PIT for authorized individuals. After determining the deductible amount and the payable tax amount, declaring the PIT for employees according to form No. 05/KK-TNCN Circular No. 92/2015/TT-BTC of the Ministry of Finance. The tax payment deadline is no later than the 30^th day of the next quarterly.

If in case of the tax deduction for income from the capital investment, transfering securities, copyright, franchising commercial, winning prizes, it must be declared and submitted the declaration according to form No. 03/KK-TNCN quarterly. Besides, if during the quarterly, the enterprise does not arise the PIT deduction (it means that there is no tax payable), then it will not have to declare the tax.

To declare the PIT, enterprises need to prepare documents including:

• The PIT declaration according to form 01/KK-TNCN for enterprises paying salaries;
• The PIT declaration according to form 03/KK-TNCN for enterprises paying for the investment capital or transferring shares.

Corporate income tax (CIT)

To declare the CIT, enterprises must provide all relevant records arising during the year. The deadline for submitting the CIT report is no later than the 30^th day of the next quarter. There are also cases where enterprises are granted an extension to pay the CIT according to regulations from time to time, for example, in the first quarterly of 2023 according to Circular No. 12/2023/TT-BTC of the Ministry of Finance, the deadline for paying the CIT is the first quarterly of 2023, no later than May 4^th, 2023.

The CIT is a fluctuating tax. Enterprises will base on the earned profits after deducting all expenses to calculate the amount of the payable tax.

In case the difference between the temporarily paid amount and the finalization amount is greater than 20%, the enterprise must pay the balance compared to the finalization amount on the last day of the 4^th quarterly tax payment deadline. If in case the difference between the temporarily paid amount and the final amount is less than 20%, the enterprise must pay the difference from the date of the temporarily tax payment to the expiring date.

The quarterly temporary CIT declaration dossier requires the following documents:

• Quarterly CIT declaration according to form 01A/TNDN.
• Quarterly CIT declaration according to form 01B/TNDN.

Reporting on the quarterly invoice usage of enterprises

All currently operating enterprises will have to submit a report on the use of invoices, including newly established enterprises, and if the usage of invoices arising during the period, the enterprise must prepare a report on the use of that invoice. At the same time, in case a newly established enterprise has not yet announced the issuance of invoices, there is no need to prepare reports.

Reporting on the invoice usage for the first quarterly will be submitted no later than April 30^th, for the second quarterly no later than July 30th, for the third quarterly no later than October 30^th, for the fourth quarterly no later than January 30^th of the next year:

• The report form: Report form is specified in Appendix IA Dossier of invoice and record – taxpayers issued with Decree No. 123/2020/ND-CP regulating about invoices and records.

Steps to submit the electronic tax report

After completing the tax declaration, enterprises need to submit a tax report to the tax agency. The simplest and most convenient way to submit is to submit via thuedientu.gdt.gov.vn with the following steps:

Step 1: Log in to the electronic tax reporting system

• Access: https://thuedientu.gdt.gov.vn – Electronic tax portal of the General Department of Taxation.
• Then go to the system login section and select “Enterprise”.
• Enter the login information > Log in

Note: The login name is the tax code that the enterprise is issued. The password will be issued immediately after the Commercial Bank approves the taxpayer’s registration for electronic tax payment.

Step 2: Declare and submit the tax report online

To be able to conduct electronic tax reporting, enterprises can choose to create declarations in one of the following two ways: Using the declaration support software or declaring directly in the tax declaration section on the Electronic Tax Portal.

• At the main interface, select Tax declaration > Submit the XML declaration > then click Select the declaration file.
• Select the XML declaration file created from the Declaration Support Software and click Open to upload to the system.

Step 3: Electronically sign and complete the electronic tax report

• First, plug the USB Token containing the electronic digital signature into the computer.
• In the section of Submitting the XML declaration > select the Electronically sign.
• Enter the PIN in the window that appears > select Receive.
• After successfully electronically signing, select Submit the declaration to complete the process.

Step 4: Check the declaration results again

After completing the electronic tax reporting process, the tax agency will send 2 notifications to the registered enterprise’s email:

• Notification 1: This is a notification confirming that your dossier has been received.
• Notification 2: Notification of successful electronic report submission results will be sent to the enterprise within one day from the date that the tax agency receives the dossier.

In case, the enterprise receives a notification that it does not accept the electronic tax reporting dossier, it needs to check and adjust the declaration dossier according to the instructions attached to the notification.

Clients who need to obtain guidance for quarterly tax report in Vietnam, and use tax declaration services, please contact Viet An Law Firm – Tax Agent for the best support!