Types of Tax Reports: VAT, PIT, Business License Tax, and Household Business Tax

Vũ Khôi

Author at Wotech Electronics Blog

Preparing tax reports is one of the recurring tasks that accountants at any organization must carry out on a regular basis. That is why questions such as "What types of tax reports are there?", "How do you prepare them?" and "What are the statutory deadlines for submitting them to the authorities?" always attract a great deal of attention from accounting professionals. Let's find the answers together with SimERP in the article below.

What Is a Tax Report?

A tax report is the declaration of input value-added tax (VAT) invoices arising from purchases or the use of services, together with the sales invoices issued by the organization itself, which constitute output VAT.

Tax reporting is regarded as the bridge that allows the tax authorities to keep track of a company's business activities. For this reason, having an accurate grasp of the legal provisions on the various types of tax reports — the declarations a business must file, the filing deadlines, and the deadlines for remitting tax payments when liabilities arise — is absolutely essential.

So, what should you pay attention to when preparing and filing tax reports? A tax report covers the following items:

– The declarations that must be filed periodically on a monthly or quarterly basis:

• The business's monthly or quarterly VAT declaration.

• The quarterly report on invoice usage.

• The calculation and remittance of provisional corporate income tax (if any) each quarter.

• The monthly or quarterly personal income tax declaration.

– Deadlines for filing the various types of tax reports.

– Tax amounts arising (if any).

Filing Deadlines for Tax Reports

The deadlines for filing tax reports — VAT declarations, personal income tax (PIT), corporate income tax (CIT), and invoice usage reports — are as follows:

• Monthly tax report deadline: no later than the 20th day of the immediately following month.

• Quarterly tax report deadline: no later than the 30th day of the first month of the immediately following quarter.

• Annual tax report deadline: no later than January 30 of the following year.

• If a business declares its taxes on a per-occurrence basis: the deadline is the 10th day counted from the date the liability arises.

• Annual tax finalization return: no later than the 90th day from the end of the fiscal year. In cases where a business is divided, merged or consolidated, changes its form of ownership, is dissolved, or ceases operations, the deadline is no later than the 45th day from the date of the business's decision.

Types of Tax Reports

VAT Report

The VAT declaration is the VAT report that every business is obliged to complete and submit to the tax authorities on a monthly or quarterly basis.

First of all, when preparing a VAT report, the business will need to prepare and clearly determine the following:

– The tax declaration form. Which declaration form to use depends entirely on the tax declaration method the business applies: the direct method or the deduction method. Specifically:

• If the business applies the direct declaration method, it will use VAT declaration Form No. 04/GTGT.

• If the business applies the deduction declaration method, it will use VAT declaration Form No. 01/GTGT.

– The declaration frequency the business uses: monthly or quarterly.

Quarterly VAT declaration applies in the following cases:

• Businesses that have just started production and business operations, for less than one year.

• Businesses with revenue in the immediately preceding year of less than 50 billion VND.

Monthly VAT declaration applies to businesses that have been operating for about one year or more and whose total revenue from sales of goods and provision of services in the immediately preceding year exceeds 50 billion VND.

Regarding the choice of VAT declaration method:

– Businesses with revenue of 1 billion VND or more are required to declare VAT under the deduction method. Businesses with revenue below 1 billion VND may, if they wish, register with the tax authorities to declare under this method.

– Businesses with revenue below 1 billion VND declare tax under the direct method, except for those that have voluntarily registered under the deduction method.

Personal Income Tax (PIT) Report

– PIT is a direct tax levied on individuals with taxable income, requiring them to contribute part of their salary or income from other sources to the state budget after allowable deductions have been taken into account.

– Determining whether to declare PIT monthly or quarterly:

• If the business declares VAT monthly, it will declare PIT monthly;

• If the business declares VAT quarterly, it will declare PIT quarterly;

Note: Even if a business has no provisional PIT liability in a given month or quarter, it must still file the declaration.

– Deadline for filing the PIT report:

• If filing monthly: no later than the 20th day of the following month.

• If filing quarterly: no later than the last day of the following quarter.

Business License Tax Report

Business license tax, also known as the business license fee, is a direct tax and is considered a levy that businesses, individuals, and organizations must pay when registering to do business.

After completing business registration procedures and receiving the enterprise registration certificate and tax code, the company's accountant needs to contact the competent tax authority to carry out the tax-related procedures, including declaring the business license tax.

Normally, the latest deadline for declaring and paying business license tax for operating businesses is the last day of the month in which they begin production and business operations.

For businesses that have not yet commenced production and business operations, the deadline is 30 days from the date the enterprise registration certificate is issued.

Businesses established within the first six months of the year must pay the business license tax for the full year; those established in the second half of the year (from July 1 onward) only have to pay half of the annual business license tax.

When declaring business license tax, the company's accountant must complete the declaration Form No. 01/MBAI, issued under Circular No. 156/2013/TT-BTC of the Ministry of Finance, and then submit it to the tax authorities.

The business license tax rates are governed by Decree No. 139/2016/NĐ-CP, issued by the Government on October 4, 2016.

Household Business Tax Report

What taxes must a sole proprietorship household business pay? This is a question SimERP frequently receives.

Under the law, a household business must pay the following three main taxes: the business license fee, paid according to income level; PIT; and VAT. These taxes are calculated based on the household business's annual revenue.

In addition to the taxes mentioned above, household businesses may also have to pay environmental protection tax, natural resources tax, and so on, if they trade in goods subject to those taxes.

What Does a Household Business Tax Report Include?

Business license fee

Under Decree 139/2016/NĐ-CP, from January 1, 2017, the business license fee for individuals and households engaged in the production and trading of goods and services is calculated based on the household business's annual income.

VAT and PIT

– For individuals paying presumptive tax who do not operate for a full year (fewer than 12 months in the calendar year), no VAT and PIT are payable (applicable to revenue of 100 million VND/year or less). Tax is calculated only for the months in which the business actually operated.

– For individuals paying presumptive tax who have been notified by the tax authority of the amount due, but who do not operate for a full year, the tax will be reduced in proportion to the number of months the business was suspended or inactive during the year.

Example: Mr. B was notified by the local tax authority of his presumptive tax payable for 2020. However, if he stopped operating in September 2020, he would receive a reduction in presumptive tax corresponding to the last four months of 2020.

– For individuals operating as a group or household, VAT and PIT are calculated for a single designated representative. If the group/household business has revenue of 100 million VND/year or less, no VAT and PIT are payable.

Example: Household C was founded by three individuals. In 2020, Household C operated and achieved revenue of 400 million VND (> 300 million), so Household C is required to pay VAT and PIT on the total revenue of 400 million VND.

Cooperative Tax Report

Each organization, agency, and unit has its own characteristics and business activities, which inevitably leads to some differences in tax reporting.

Accordingly, in a cooperative's tax report, in addition to declaring the three basic taxes — VAT, PIT, and the corporate income tax of those working at the cooperative — another type of tax is required: the tax on the use of agricultural and non-agricultural land.

Depending on the cooperative's actual business situation, there may be additional regulations and requirements for certain taxes such as import–export tax, special consumption tax, and environmental protection tax. When establishing a cooperative, it is essential to thoroughly research the details of your tax obligations to ensure full and proper compliance with the law at all times.

Tax Reports Businesses Must File Monthly and Quarterly

What does a monthly tax report include?

• VAT report

• PIT report

• Corporate income tax report

What does a Q1 tax report include?

• VAT report

• PIT report

• Corporate income tax report

• Quarterly invoice usage report

Value-Added Tax (VAT)

VAT is an indirect tax based on the value added to goods or services during production, circulation, and consumption. Under the law, VAT is payable to the state budget in proportion to the consumption of goods and services.

When preparing a VAT report, you need to determine whether your business declares VAT monthly or quarterly, and whether under the deduction method or the direct method, so that you can select the correct and appropriate declaration form.

For VAT declaration, under current law, newly established businesses must declare VAT quarterly. Operating businesses with revenue in the immediately preceding year of 50 billion VND or less declare quarterly, while all other businesses declare monthly.

Personal Income Tax (PIT)

As with the VAT report, when preparing a PIT report, you need to determine whether your business falls into the monthly or quarterly declaration category.

Typically, whichever form a business chooses for VAT declaration (monthly or quarterly) applies to its PIT declaration as well.

In addition, businesses with PIT payable of more than 50 million VND must declare monthly; businesses with PIT payable of less than 50 million VND declare quarterly.

For PIT, the business must submit the PIT declaration on Form 05/KK-TNCN.

Note that if a business has not withheld PIT from any of its employees, it is not required to file this declaration at all.

Corporate Income Tax (CIT)

As for CIT, each quarter the accountant will provisionally calculate the corporate income tax based on invoices, documents, and the books of account.

If CIT arises during the quarter, the business must remit the tax no later than the 30th day of the following quarter. If no tax arises, no payment is required.

In addition, for this particular tax, the business is not required to file any declaration form at all.

Quarterly Invoice Usage Report

Most businesses today are required to file an invoice usage report every quarter. When filing the quarterly invoice usage report, the business must declare on Form BC26-AC.

Notes when preparing the invoice usage report:

• Only businesses classified as high-risk prepare their invoice usage report monthly.

• Even if no invoices were used, the business must still prepare the invoice usage report.

• Only newly established businesses that have not yet notified the issuance of invoices are exempt from this report.

When preparing monthly and quarterly tax reports, keep the following in mind:

• Arrange sales invoices in order by process and date sequence.

• When posting entries into the accounting software, clearly distinguish between goods, raw materials, and assets, tools, and instruments.

• When storing invoices or documents, make extra photocopies to guard against loss without anything to cross-check against.

• Declare carefully each month and always double-check.

• Each month, you should post and adjust entries in the accounting software before exporting the data and filing the declaration.

• Resolve all account-related issues while balancing the books.

• Finalize the corporate income tax portion first so you can compare it against CIT differences. Then create journal entries to handle the CIT differences before closing the books and preparing the financial statements.

• Each month, you should balance everything involved — taxes, expenses, and profits, etc. — so you are not overwhelmed at year-end when preparing the financial statements.

Year-End Tax Reports

What Does a Year-End Tax Report Include?

To make it easy for businesses to track and fully complete their year-end tax filings, SimERP has compiled the list of tax reports that must be filed below.

Annual Corporate Income Tax Finalization

Provisional CIT is payable quarterly. At year-end, the business must consolidate the figures. The deadline for annual CIT finalization is no later than the 30th day of the first month of the following year. Specifically, for the 2020 CIT finalization year, businesses had to file no later than January 30, 2021.

Annual PIT Finalization

The deadline for submitting the 2020 PIT finalization dossier is no later than March 30, 2021. Late or missing filings will be penalized as prescribed by law: from a warning to a fine.

Annual Tax Finalization Dossier

To finalize the annual tax, the business must prepare the following documents:

• The CIT finalization return.

• The PIT finalization return.

• Financial statements.

• Other relevant documents.

The deadline for submitting the annual tax finalization dossier is no later than the 90th day from the end of the calendar year or fiscal year. For example, the dossier for the 2020 tax year had to be submitted no later than March 30, 2021.

Tax Reports with No Arising Amounts

Monthly and Quarterly Declarations

If in a given period the business incurs no expenses or revenue — that is, there are no output or input invoices — it must still file the VAT declaration. The business simply submits a blank (nil) declaration.

The business does not have to file a provisional quarterly tax report whether or not it has revenue or expenses. It only needs to provisionally calculate any tax arising in the quarter (if any) and remit it to the local tax authority.

If during the period the business pays income to employees and withholds PIT, it must declare and file PIT returns monthly or quarterly. If it pays income to employees but withholds no tax, then it does not have to declare PIT.

Annual Tax Finalization Return

The business must still file the annual CIT finalization return whether or not any revenue arose.

• If an individual or organization paid any income during the year, the business must file the PIT finalization return.

• If no income was paid, the PIT finalization is not required. The business files a blank (nil) return.

Conclusion

Those are the fundamentals related to the various types of tax reports. Besides a solid grasp of the knowledge, the person preparing the reports needs professional expertise as well as strong processing skills and the ability to work under pressure. If you have any further questions about monthly or quarterly tax reports, leave your question below this article and SimERP will answer it promptly!

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