Dispatch No. 2626/TCT-DNNCN of the General Department of Taxation regarding introduction of some new regulations and implementation of the Circular No. 40/2021/TT-BTC

According to summarization of the General Department of Taxation, Circular No. 40/2021/TT-BTC has some new regulations in comparison with Circular No. 92/2015/TT-BTC as follows:

- Addition of regulations on tax declaration, tax payment with regard to individuals transferring Vietnam’s country code top-level domain name (“.vn”);

- Addition of regulations on declaration, payment of tax on behalf of other person in performing e-commerce activities;

- Change in tax calculation methods applied to household businesses and individual businesses;

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Accordingly, with regard to Tariff schedules applicable to individual businesses, Circular No. 40/2021/TT-BTC amends, supplements the tax rates applicable to these incomes:

- Compensation for breach of contract, other compensations in the field of distribution and provision of goods shall be subject to 0.5% personal income tax (PIT) (previously, it was 1%);

- Incomes from of advertising on digital information products and/or services shall be subject to 5% value added tax (VAT) and 2% PIT (previously, there was no regulation on these incomes);

- Incomes exempt from VAT, exempt from VAT declaration or are subject to 0% VAT, shall be subject to PIT according to the corresponding PIT rates in Sections 1, 2, 3 of the tariff schedule, 0.5%, 2% and 1.5% (previously, the tax rate of 1% was applied generally);

- Bonuses, sales compensation, promotions, commercial discounts, payment discounts, supports in cash or not in cash, compensations for breach of contract, and other compensations for presumptive tax payers shall apply the rate for calculation of VAT of 1% (except cases entitled to exemption) and the rate for calculation of PIT of 0.5% (previously, they applied the rate for calculation of PIT of 1%).