Tax Alert - Circular 40 on PIT and VAT on Business Individuals
June 2021 | KPMG in Vietnam
On 1 June 2021, the Ministry of Finance issued Circular No. 40/2021/TT-BTC guiding value added tax, personal income tax and tax administration for business households and individuals. Circular 40 takes effect from 1 August 2021 and replaces the relevant contents in Circular 92/2015/TT-BTC. Notably, Circular 40 provides that income paying organisations must declare and pay tax on behalf of business households and individuals in a number of cases as follows: — Organisations that pay bonuses, sales support, sales promotions, trade discounts, payment discounts, cash or non-cash support, compensation for breach of contract and other compensations to business households adopting the deemed taxation method. — Organisations in Vietnam that are partners of overseas digital platform providers (without a permanent establishment in Vietnam), paying income from digital information content products and services to individuals under an agreement with the overseas digital platform providers. — Organisations being the owners of e-commerce platforms shall declare and pay tax on behalf of the individuals according to a roadmap announced by the tax authorities. During the time when it is not yet possible to declare tax on behalf of individuals, the e-commerce platform owners are required to provide information related to business activities performed by individuals through such platforms at the request of tax authorities in accordance with the applicable laws.
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