Circular No. 41/2006/TT-BTC guiding the implementation of Decision No. 161/2005/QD-TTg dated June 30, 2005 of the Prime Minister on expanding the pilot program for production and business establishments to self-declare and self-pay land tax, high-income individual income tax, and business license tax.

REGULATION TA

Guidelines for implementing Decision No. 161/2005/QD-TTg dated June 30, 2005 of the Prime Minister on expanding the pilot program for production and business establishments to self-declare and self-pay land tax, income tax for high-income individuals, and business license taxenterprises declare and pay real estate tax, high-income individual income tax, and business license tax on their own.  high-income individuals and

 Pursuant to the Land Tax Law 1992, the Law Amending and Supplementing Certain Provisions of the Land Tax Law 1994, and Decree No. 94/CP dated August 25, 1994 of the Government detailing the implementation of the Land Tax Law and the Law Amending and Supplementing Certain Provisions of the Land Tax Law; Pursuant to the High-Income Individual Income Tax Law No. 35/2001/PL-UBTVQH10 dated May 19, 2001, the Law Amending and Supplementing Certain Provisions of the High-Income Individual Income Tax Law No. 14/2004/PL-UBTVQH11 dated March 24, 2004, and Decree No. 147/2004/NĐ-CP dated July 23, 2004 of the Government detailing the implementation of the High-Income Individual Income Tax Law;

Pursuant to Decree No. 75/2002/NĐ-CP dated August 30, 2002 of the Government on adjusting the business license tax rate;

Pursuant to Decision No. 197/2003/QĐ-TTg dated September 23, 2003 of the Prime Minister on piloting the mechanism for production and business establishments to self-declare and self-pay taxes;

Pursuant to Decision No. 161

 2005/QĐ-TTg dated June 30, 2005 of the Prime Minister on expanding the pilot program for production and business establishments to self-declare and self-pay taxes for special consumption tax at the production stage, natural resource tax, land tax, high-income individual income tax, and business license tax, the Ministry of Finance provides guidelines for implementation as follows:/I. APPLICABLE OBJECTS

The objects subject to Decision No. 161/2005/QĐ-TTg guided by this Circular are production and business establishments, services (collectively referred to as business establishments) falling within the scope defined in Clause 2, Article 1 of Decision No. 197/2003/QĐ-TTg dated September 23, 2003 of the Prime Minister and related guiding documents of the Ministry of Finance.

II. TAX REGISTRATION

Business establishments participating in the pilot program for the mechanism of self-declaration and self-payment of land tax, high-income individual income tax, and business license tax continue to use the tax number already issued by the tax authority and do not need to re-register their tax number with the tax authority.

III. DECLARATION AND PAYMENT OF TAXES

1. Land tax:

1.1. Declaration of land tax:

Business establishments shall declare land tax according to the declaration form attached to this Circular (Form No. 01-06/TNĐ) and submit the land tax declaration to the Tax District where the land subject to land tax is located no later than January 31 each year (Gregorian calendar). Some items in the land tax declaration are determined as follows:

a) The taxable land area for land tax is the total area of land under the taxable land tax that the business establishments actually manage and use (including the area of land currently being used by other organizations or individuals).

In cases where the business establishment has a Certificate of Land Use Right or a decision to allocate land from a competent state agency, the taxable land area is the total area of land under the taxable land tax recorded on the Certificate of Land Use Right or the decision to allocate land. If the business establishment does not have a Certificate of Land Use Right or a decision to allocate land, it shall declare based on the actual land area used.

b) The land category for determining the number of times the agricultural land use tax rate applies to land tax is implemented in accordance with Clauses 1, 2, and 3, Section II of Circular No. 83 TC/TCT dated October 7, 1994 of the Ministry of Finance guiding the detailed implementation of Decree No. 94/CP dated August 25, 1994 of the Government on the detailed implementation of the Land Tax Law (or as notified by the tax authority in cases where the business establishment cannot determine).

c) The rice price for calculating land tax is based on the rice price for the agricultural land use tax of the last crop of the previous year before the year of land tax collection, as announced by the People's Committee of the province or centrally-administered city.

1.2. Payment of land tax:

Production and business establishments pay land tax into the State budget according to the declared amount.

Land tax is paid in two installments annually, each installment being 50% of the annual tax payable. The first installment must be paid no later than April 30; the second installment must be paid no later than October 31 of the same year. If the taxpayer voluntarily pays the entire land tax in one installment, it should be paid in the first installment.

When paying money into the State budget, the business establishment uses the payment voucher for the State budget (by bank transfer or cash) and must fill in all the required fields on the payment voucher in accordance with Circular No. 80/2003/TT-BTC dated August 13, 2003 of the Ministry of Finance guiding the concentration and management of State budget revenues through the State Treasury.

In cases where the business establishment has both newly generated tax and penalty amounts and outstanding tax and penalty amounts from the previous period without specifying which period they are for, the tax authority will deduct the outstanding tax and penalty amounts from the previous period, and the remaining amount will be considered for the newly generated tax and penalty amounts.

Land tax of business establishments is paid into the State Treasury of the district or county where the land subject to tax is located and recorded according to the prescribed Budget Ledger.

In cases where business establishments undergo mergers, consolidations, divisions, dissolution, bankruptcy, ownership changes, or relocation to another province or centrally-administered city, they must fully settle any outstanding land tax into the State budget before proceeding with the change. In cases where business establishments have overpaid land tax, they will be refunded by the tax authority in accordance with current regulations.

2. High-Income Individual Income Tax (referred to as Personal Income Tax - PIT):

The declaration and payment of PIT and final settlement of PIT are carried out in accordance with the High-Income Individual Income Tax Law and relevant guiding documents.

2.1. Declaration of PIT:

2.1. Declaration of personal income tax:

For regular income payments based on labor contracts, such as salaries and wages, businesses shall deduct, declare, and temporarily pay taxes monthly. Businesses implementing the self-declaration and self-payment mechanism must fully and accurately complete the declaration form number 03a/TNTX issued with this Circular. If the monthly tax deduction amount is less than five million dong, it can be declared using form 03a/TNTX quarterly, but the monthly deductions must still be made. The quarterly declaration period is determined annually based on the total income tax deducted in the first month of the year.

The deadline for submitting declarations to the tax authority is no later than the 25th day of the following month after the income is generated, and for quarterly declarations, it is the 25th day of the first month of the quarter following the generation of income.

In cases where businesses fail to fully declare or declare incorrectly according to the prescribed model, or if the business has not confirmed the legal validity of the declaration (signing and stamping), it will be considered as not having submitted the declaration to the tax authority.

Businesses are responsible under the law for the truthfulness and accuracy of their monthly and quarterly personal income tax declarations (if applicable). If the tax authority discovers during inspection or audit that the information on the declaration is not truthful or accurate, the business will be subject to penalties as stipulated by law.

2.2. Payment of Personal Income Tax:

Each month, businesses pay the personal income tax into the State Budget based on the declared tax amount. The latest payment date for personal income tax is no later than the 25th day of the following month after the tax liability arises. For quarterly payments, the latest payment date is no later than the 25th day of the first month of the quarter following the generation of tax liability. For businesses paying taxes through bank transfers, the payment date into the State Budget is the date when the bank or financial institution transfers funds into the state treasury according to the tax payment voucher of the business. For businesses paying in cash, the payment date into the State Budget is the date when the treasury office or tax authority receives the tax payment.

Businesses must fill out all required fields on the tax payment voucher according to the guidance of the tax authority and the state treasury. Businesses must clearly indicate on the payment voucher the amount of tax and any tax penalties corresponding to each tax period. If the business does not specify which tax period the payment is for, the tax authority will offset it against any outstanding tax or penalty amounts before applying it to the current period's tax or penalty due.

In cases where businesses undergo changes in business forms and ownership types such as mergers, consolidations, divisions, spin-offs, dissolution, bankruptcy, or ownership transfer; or when transferring, selling, leasing state-owned enterprises, they must declare the tax arising up to the point of merger, consolidation, division, spin-off, dissolution, bankruptcy, or ownership transfer (including adjustments to previous periods' data if errors are found). Businesses must submit the tax declaration and pay any outstanding personal income tax to the State Budget within thirty days from the date of the decision on merger, consolidation, division, spin-off, dissolution, bankruptcy, or ownership transfer; or when transferring, selling, leasing state-owned enterprises. If there is overpayment or unutilized tax deductions, the business will be refunded by the tax authority according to current regulations.

2.3. Amendment of Declaration Forms and Tax Receipts for Personal Income Tax:

- Form number 03a/TNTX and form number 10/TNTX issued with Circular No. 12/2005/TT-BTC dated February 4, 2005, of the Ministry of Finance are replaced by form number 03a/TNTX and form number 10/TNTX issued with this Circular.

- Form number 08/TNTX issued with Circular No. 12/2005/TT-BTC dated February 4, 2005, of the Ministry of Finance is replaced by form number 08a/TNTX and form number 08b/TNTX issued with this Circular, wherein:

+ Form number 08a/TNTX is a simplified form applicable to individuals who only have taxable income generated in Vietnam, excluding singers, circus performers, dancers, football players, and professional athletes.

+ Form 08b/TNTX is a complex form applicable to foreign individuals, Vietnamese individuals with taxable income generated both in Vietnam and abroad, and singers, circus performers, dancers, football players, and professional athletes.

- Tax receipts for personal income tax:

Model CTT 10B (Tax receipt) issued with Circular No. 81/2004/TT-BTC dated August 13, 2004, of the Ministry of Finance is replaced by Model CTT 10B (Tax receipt) issued with this Circular.

The amended declaration forms and tax receipts for personal income tax specified in this Circular apply to both individuals and entities not participating in the pilot program for self-declaration and self-payment of taxes.

3. Business License Tax:

3.1. Rate of Business License Tax:

Businesses implementing the self-declaration and self-payment mechanism for taxes shall determine the rate of business license tax according to the guidelines set forth in Points 1 and 2 of Circular No. 42/2003/TT-BTC dated May 7, 2003, of the Ministry of Finance, which supplements and amends Circular No. 96/2002/TT-BTC dated October 24, 2002, of the Ministry of Finance, guiding the implementation of Decree No. 75/2002/NĐ-CP dated August 30, 2002, of the Government regarding the adjustment of the business license tax rate.

3.2. Declaration and Payment of Business License Tax:

Businesses must declare and submit the declaration form number 04-06/MB issued with this Circular and pay the business license tax into the State Budget.

Businesses with branches, factories, workshops, stores, service operation sites, etc., that are dependent accounting units located in the same locality (province, centrally administered city) shall declare and pay the business license tax for the main office and its branches, factories, workshops, stores, service operation sites, etc. Branches, factories, workshops, stores, service operation sites, etc., that are dependent accounting units located in different localities (provinces, centrally administered cities) must declare and pay the business license tax at the locality where the dependent accounting unit operates.

The specific time for declaring and paying the business license tax varies depending on the situation as follows:

3.2.1. For operating businesses:

a) Declaration and submission of the business license tax return:

Operating businesses must declare the business license tax annually using Form 04-06/MB issued together with this Circular.

The deadline for submitting the business license tax return to the tax management authority is no later than January 31 of each calendar year. The basis for determining the business license tax rate and tax bracket is provided in Section 3.1 and Section III above.

b) Payment of the business license tax:

Operating businesses must pay the business license tax into the State budget according to the amount declared to the tax authority, with the payment deadline not exceeding January 31 of each calendar year.

Businesses must fully complete all fields on the payment slip in accordance with the instructions of the tax authority and the treasury office. For businesses that pay taxes through bank transfers or financial institutions, the date of tax payment into the state budget is considered the date when the bank or financial institution transfers the funds into the state treasury; for businesses that pay taxes in cash, the date of tax payment into the state budget is the date when the treasury office or tax authority receives the tax payment.

3.2.1 For newly established businesses:

Newly established businesses that have been granted a tax registration certificate must declare, submit the tax return, and pay the business license tax within thirty days from the date of issuance of the tax registration certificate (tax code). If a newly established business is granted a tax registration certificate during the first six months of the year, it must pay the full annual business license tax. If a newly established business is granted a tax registration certificate during the last six months of the year, it must pay fifty percent of the annual business license tax.

In cases where an operating business establishes additional dependent businesses in the same locality (province or centrally-administered city), the main business (headquarters) must declare and pay additional business license tax for these dependent businesses in the same locality according to the deadlines and methods for determining the amount of business license tax payable as specified for newly established businesses.

4. Adjustment declaration of real estate tax, personal income tax, and business license tax:

4.1 For real estate tax and personal income tax.

After submitting the tax return to the Tax Authority, if a business discovers errors or mistakes in the declared figures (either self-discovered or reported by the Tax Authority), the business is responsible for making an adjustment declaration to the Tax Authority as follows:

- If still within the declaration period as prescribed, the business may prepare and submit a replacement tax return for the previously submitted tax return. The replacement tax return must clearly indicate which tax return it replaces and the date of submission.

- If beyond the declaration period as prescribed, the business can only adjust the erroneous items on the previously submitted tax return. If the Tax Authority has already issued a decision for inspection or audit of the tax settlement, the business shall not be allowed to make an adjustment declaration.

4.2 For business license tax.

- Within five years from the date of submitting the business license tax return to the Tax Authority, if errors or mistakes in the declared figures (either self-discovered or reported by the Tax Authority) are found, or if additional branches, stores, etc., are established under the same locality, the business must declare adjustments and supplements to replace the previously submitted tax return. The adjusted and supplemented tax return must clearly indicate which tax return it replaces and the date of submission, and must also specify the increased or decreased tax amount and the reasons.

- If the business has paid the business license tax to the Tax Authority but due to adjustments, there is a difference in the tax amount, the business must pay the additional tax shortfall if the adjustment increases the tax, and must deduct the excess tax from the next year's tax liability if the adjustment decreases the tax.

- If the Tax Authority has already issued a decision for inspection or audit of the tax settlement, the business shall not be allowed to make an adjustment declaration for the business license tax.

IV. DUTIES, RIGHTS, AND RESPONSIBILITIES OF THE TAX AUTHORITY

In addition to the duties, rights, and responsibilities of the Tax Authority stipulated in laws and regulations on real estate tax and related documents, the Tax Authority managing pilot businesses for self-declaration and self-payment of real estate tax, personal income tax, and business license tax shall be responsible for:

1. Promoting, guiding, and answering questions from businesses regarding tax policies, declaration procedures, and tax payment procedures to ensure businesses understand and comply with tax laws and self-declaration and self-payment mechanisms.

2. Monitoring the fulfillment of tax declaration and payment obligations by production and business establishments:

- If a production and business establishment fails to submit the tax return within the prescribed time limit, the Tax Authority will issue a reminder notice for tax return submission and impose administrative penalties according to current regulations. If, after issuing the reminder notice and imposing penalties, the production and business establishment still fails to submit the tax return, the Tax Authority will estimate the provisional tax payment according to the law on real estate and land tax, personal income tax, and business license tax.

- If a business fails to pay taxes within the prescribed time limit, the Tax Authority will issue a reminder notice for tax payment and calculate late payment penalties for the outstanding tax debt according to the regulations.

3. Conducting regular or irregular inspections and audits of the implementation of self-declaration and self-payment mechanisms for real estate and land tax, personal income tax, and business license tax by production and business establishments.

4. Applying coercive measures to collect overdue tax and penalty payments from production and business establishments according to the law.

5. Maintaining confidentiality of information provided by pilot production and business establishments according to the regulations.

V. IMPLEMENTATION

1. This Circular shall take effect fifteen days after its publication in the Official Gazette. Other contents not specified in this Circular shall continue to be implemented in accordance with Circular No. 83 TC/TCT dated October 7, 1994, and Circular No. 71/2002/TT-BTC dated August 19, 2002, issued by the Ministry of Finance guiding the implementation of Decree No. 94/CP dated August 25, 1994 of the Government detailing the implementation of the Land and House Tax Ordinance, Circular No. 81/2004/TT-BTC dated August 13, 2004, and Circular No. 12/2005/TT-BTC dated February 4, 2005, issued by the Ministry of Finance guiding the implementation of Decree No. 147/2004/NĐ-CP dated July 23, 2004 of the Government detailing the implementation of the High-Income Personal Income Tax Ordinance, and current regulations on business license tax.

2. The General Department of Taxation shall be responsible for organizing and implementing the pilot program of production and business establishments self-declaring and self-paying land and house tax, personal income tax, and business license tax as prescribed in this Circular.

3. During the implementation process, if there are difficulties or obstacles, they should be promptly reported to the Ministry of Finance by relevant sectors, localities, and production and business establishments for further study and supplementary guidance./.