This is the proposal of the Ministry of Finance , expected to be submitted to the Government in the latest draft of the Law on Personal Income Tax (amended). This proposal is assessed to have absorbed many opinions of National Assembly deputies in the recent discussion session.
The representative of the Ministry of Finance also said that the Ministry is studying to increase the tax-exempt revenue threshold for business households... instead of the old proposed level of 200 million VND/year, and is considering allowing business households to deduct expenses when switching from lump-sum tax to declaration from next year.
For businesses with revenue under 3 billion VND/year, if input costs can be determined, the tax rate to be paid will be 15% of the profit earned. This tax rate is equivalent to the rate applied to small and micro enterprises.
Mr. Luu Duc Huy - Deputy Director of the Department of Tax, Fee and Charge Policy Supervision, Ministry of Finance said: "The draft Law is being submitted to apply the rate on revenue, but this time we also propose to apply the method of calculating by income. That is, revenue minus expenses. High income pays more, low income pays less. Even if there is no income, there is no need to pay tax. It ensures fairness".
Allowing business households to calculate input costs when determining taxable income will help reflect more accurately the actual business performance. This is especially beneficial for households with large costs such as raw materials, premises or hiring workers, because the amount of tax payable will be significantly reduced, helping them have more resources to reinvest, expand operations and stabilize their business.
Mr. Tran Hoang Ngan - National Assembly Delegate of Ho Chi Minh City commented: "Taking revenue minus reasonable expenses, the remaining amount is then paid for personal income tax, that is the correct and complete calculation".
In case the business household cannot determine the expenses, it can continue to pay personal income tax at the current rate on revenue, from 0.5-2% depending on the industry. The next new point is that the revenue within the tax-free threshold will be deducted, instead of having to pay on the entire revenue as before.
Associate Professor, Dr. Le Xuan Truong - Head of the Tax and Customs Department, Academy of Finance commented: "For example, if it increases to 300 million, the first 300 million will not be taxed. The part exceeding 300 million will be taxed, which will reduce tax liability a lot compared to before."
Regarding the proposed tax-free revenue threshold for business households at 200 million VND/year, a representative of the Ministry of Finance said that they will study increasing this revenue threshold to better suit reality.
From January 1, millions of business households across the country will stop paying lump-sum tax and switch to declaration according to regulations. The transition from lump-sum tax to declaration is expected to accurately reflect income and create fairness among business households. However, the transition also requires households to become familiar with books, invoices and transparency of goods sources..., things that are not easy to do overnight. That requires tax authorities to continue to support, guide and facilitate the transition to be carried out smoothly and harmoniously for both business people and management agencies.
Source: https://vtv.vn/de-xuat-ho-kinh-doanh-duoc-nop-thue-theo-loi-nhuan-100251126204534218.htm
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