Adjustment of the Stock Tax Rate - Reduction from 50% to 20%

22/03/2021, 04:06 AM

The Ministry of Finance said that, coinciding with the content of protection assigned by the Law on Tax Administration No. 38/2019/QH14 to the Ministry of Finance, there are new points in the Circular project compared to the current regulations in Circular No. 29/ 2015 as follow:

Go to the tax level modelling: The determination of the taxable revenue of the flat household has a new point compared to the current point that in case of a change in revenue, the tax authority will increase or decrease according to reality if the revenue changes from 20%.

According to the current regulations in Decree No. 12/2015, only in case the revenue is changed from 50% or more, the tax authority will make the adjustment. This makes it difficult for both taxpayers and tax authorities to adjust the presumptive tax rates for business households and individuals, especially during Covid-19, the affected households changed. Sales below 50% will not be eligible for a flat tax reduction.

In addition, the annual forecast increase for the non-state sector, which includes business households, is usually between 10% and 20% (according to actual reported data from 2015 to present). But the tax authorities can only increase the presumptive tax rate if the revenue increases by 50% (this makes it difficult for tax authorities to make budget revenue estimates). Therefore, to be able to increase / decrease the presumptive tax rate in the actual year, ensure the taxpayer's interests, meet the completion of the estimate, it is necessary to specify an appropriate rate of 20%.

For other subjects such as: business households, business individuals that pay tax according to the declaration method; personal property leasing; individuals who directly sign lottery, insurance and multi-level agent contracts, although the principles of tax declaration, tax declaration dossiers, tax payment deadline, and location of submission of dossiers are generally specified in Law on Tax Administration No. 38/2019 and Decree No. 126/2020. In order to perform consistently and easy to look up, especially individuals with many specific forms, specific instructions are required. Therefore, the draft Circular has specific directions for each of these subjects to facilitate taxpayers to look up dossiers and procedures and comply with regulations.

The Ministry of Finance assessed that these amendments did not incur any administrative procedures. The adjustment of the rate of presumptive tax adjustment from 50% to 20% to ensure to match the reality and ensure the interests of taxpayers, especially during the Covid-19 epidemic.


Source: Bao Chinh Phu