In a business environment where laws are becoming increasingly complex, tax advisory services are a useful solution to help businesses avoid tax risks.
The necessity of tax consulting services for businesses
A tax is a mandatory financial fee or some other tax imposed on a taxpayer (an individual or legal entity) payable to a government entity in accordance with Vietnamese Law.
Tax consulting services help businesses determine exactly what taxes businesses have to pay? What is the contribution rate for each type of Tax? When is the closing time? In addition, tax consulting services undertake activities to update new tax policies; find comprehensive solutions to tax problems; prevent all risks, help businesses confidently carry out other business activities.
Taxes that businesses must pay:
1. License fee
License fee is an amount payable annually or when first starting production or business based on the charter capital stated in the business registration certificate/investment capital stated in the investment registration certificate (for organizations) or annual revenue (for households, business individuals).
Pursuant to Decree 139/2016/ND-CP amended and supplemented by Decree 22/2020/ND-CP on guidance on declaration and payment of license fees:
The deadline for tax declaration is at least the last day of the month in which business operations begin
If the enterprise has not had production and business activities, the deadline for submitting license tax declarations is within 30 days from the date of receipt of the enterprise registration certificate.
The license fee payment is 02 million VND/year for enterprises with charter capital or investment capital of 10 billion VND or less and 03 million VND/year for enterprises with charter capital or investment capital of more than 10 billion VND. Branches, representative offices, business locations, non-business units, other economic organizations: VND 1,000,000/year.
However, not all enterprises are required to pay license fees, in some cases enterprises are exempt from license fees specified in Article 3 of Decree 139/2016/ND-CP amended and supplemented by Decree 22/2020/ND-CP.
2. Corporate income tax
It is a tax based on the final results of production and business activities of the enterprise.
According to the provisions of the Law on CIT 2008 amended and supplemented in 2013 and 2014, the basis for calculating CIT is based on taxable income and tax rate, in which:
Taxable income in the tax period is determined by taxable income minus tax-exempt income and losses carried over from previous years.
Taxable income is equal to revenue minus deductible expenditures of production and business activities plus other income, including income received outside Vietnam.
The corporate income tax rate is 22%.
Enterprises with a total annual turnover of not more than twenty billion VND shall apply a tax rate of 20%.
The corporate income tax rate for the prospect, exploration and exploitation of oil, gas and other rare resources in Vietnam is from 32% to 50% suitable to each project and each business establishment.
In addition, based on the Law on Support for Small and Medium Enterprises 2017, small and medium enterprises from 2018 will be applied for a period of time with a CIT rate smaller than the normal tax rate mentioned above.
3. Value Added Tax
A tax calculated on the added value of goods and services arising in the process from production, circulation to consumption.
According to the Law on Tax (VAT) 2008 amended and supplemented in 2014, 2016, tax is calculated according to the withholding method and the direct method.
Deduction method:VAT amount= Output VAT–Input VAT
Direct method:VAT number = VAT of goods x VAT rate of that commodity.
VAT rates for enterprises have rates of 0%, 5%, 10% depending on the specific type of business goods and services of the enterprise.
4. Personal income tax
A tax paid by the company on behalf of the employee, calculated monthly, monthly or quarterly pregnancy declaration and annual settlement.
The basis for calculating PIT is based on taxable income and tax rate, in which:
PIT Taxable Income= PIT Taxable Income- Family deductions.
PIT rates are specified in Articles 22 and 23 of the Law on PIT 2007 amended and supplemented in 2012 and 2014
Tax advisory services to address tax risks for businesses
Along with the continuous changes of the business community in the modern era, CIT regulations are also always adjusted from year to year to time to meet the needs of economic and social development of the country. However, this change has made many businesses face difficult problems in grasping and closely following regulations in a timely and complete manner, thereby leading to risks in tax arrears, fines, late payment penalties during tax inspection, etc Typically, some of the following risks can be mentioned:
Risk of overdue submission of CIT finalization declaration and CIT payment;
The risk of temporary payment of CIT not complying with regulations;
The risk of applying preferential tax rates that do not comply with regulations;
The risk of determining deductible costs is not subject to regulations, especially high-risk costs such as costs for affiliates, interest expenses for enterprises having transactions with affiliates, etc. v...;
The risk of not timely updating periodic tax regulations that may take effect from the middle of the year or apply to tax periods before the document takes effect, thereby not having a reasonable tax plan;
Other qualitative risks;
Recognizing the importance of tax advice, RSM has developed the following tax advisory services:
Support services for preparing CIT finalization declarations;
In-depth tax review services;
Regular consultation services;
Tax inspection support services;
Case-based tax advisory services;
Support services for applying for a 2-time taxation avoidance agreement (DTA);
Government Relations Support Services
In the context that Vietnam's tax policies and tax administration laws are not consistent and stable, leading to difficulties for businesses in grasping and effectively applying tax policies. Therefore, RSM Vietnam has developed a team of experts in tax consulting services with practical and in-depth experience capable of advising and offering comprehensive solutions for businesses.
RSM Vietnam - with professional tax advisory services always help you move forward with confidence!
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