Businesses need to pay attention to the types of taxes to pay when establishing a business company to avoid late penalties or more serious consequences. What are the types of taxes that a company must pay after establishment?
Business license tax when establishing a business
At first, Business license tax is the tax that must be paid when establishing a business company or periodically every year. Base on the charter capital in the business registration certificate or investment capital in the investment registration certificate (for organizations). Or the revenue of the year (for households and individuals doing business).
The level of business license tax is divide into the following cases:
- For businesses with charter capital under 10 billion: The payment level is 2 million VND/year.
- Enterprises with charter capital of over 10 billion: The payment rate is 3 million VND/year
Other economic organizations such as representative offices, business locations. Public service units or economic organizations that generate business activities of goods. And services must pay business license tax at a rate of 1 million VND/year
However, some cases are still exempt from business license tax. As stipulate in Article 3 of Decree 139/2016/ND-CP, amend and supplement by Decree 22/2020/ND-CP.
Corporate income tax
Corporate income tax (CIT) is also one of the taxes that must be paid when establishing a company. It is calculate base on the company’s final production and business results. Normally, the corporate income tax rate is 22%. For companies with a total annual revenue of 20 billion VND or less, the tax rate of 20% will be apply.
The deadline for paying corporate income tax is as follows: According to Clause 1, Article 55 of the Law on Tax Administration 2019. The deadline for paying provisional corporate income tax every quarter is no later than the 30th day of the first month of the following quarter.
Value-added tax (VAT) is a tax payable upon the establishment of a business
Generally, Value-added tax (VAT) is a tax calculated on the add value of goods/services arising in the process of production, circulation, and consumption.
Also, Value-added tax is calculate by the direct method and the deduction method. Specifically as follows:
- Firstly, Deduction method: VAT amount = Output VAT – Input VAT
- Secondly, Direct method: VAT amount = VAT of goods x VAT rate of the same goods.
- Thirdly, Value add tax rates are 0%, 5%, 10% depending on the specific type of goods and business services of each company.
Read more: Steps to Establish a Business in 2024
Personal income tax
Personal income tax is a tax levy on an individual’s income. But the organization paying income must deduct personal income tax from the employee before paying income. And is responsible for declaring and paying the tax amount to the state budget.
The deduction is implement according to the provisions of Circular 111/2013/TT-BTC as follows:
- Firstly, For non-resident individuals: Deduct 20% before paying income.
- Secondly, For resident individuals without a labor contract or with a labor contract of less than 03 months: Directly deduct 10% at the source before paying income with a total payment of VND 2,000,000 or more. Not deductible for family circumstances but must commit 02/CK-TNCN (if eligible). For the organization paying income to temporarily not deduct tax from these individuals.
- Thirdly, For resident individuals with a labor contract of 3 months or more: Deductions are made according to the progressive tax schedule and employees are entitle to family deductions before deductions. The organization paying income is responsible for finalizing on behalf of authorize individuals.
Other taxes that businesses must pay when establishing a business
In addition to the above taxes, depending on the characteristics and business activities of the business. Businesses must also pay the following taxes: Export tax, import tax, non-agricultural land use tax, special consumption tax, environmental protection tax, resource tax, etc.
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In conclusion, these are the taxes that you need to pay attention to when establishing a business so that you are not confuse when working on legal issues.