Filing tax returns is a mandatory legal obligation for all businesses operating in Vietnam. According to data from the General Department of Taxation, more than 301 small and medium-sized enterprises (SMEs) made errors in their first tax filing period due to a lack of understanding of the process. Filing tax returns correctly and promptly helps businesses comply with the law and avoid serious financial penalties.
With tax authorities tightening control over electronic invoices, self-filing requires absolute accuracy. This article from MAN financial experts will provide detailed step-by-step instructions to help you file your tax return safely and efficiently.
A summary of key aspects of tax reporting.
- Define: Tax reporting involves collecting and verifying input and output invoices to prepare and submit periodic tax returns to the tax authorities.
- Purpose: Declare financial information and determine the tax obligations payable to the state budget.
- Applicable objects: All organizations, businesses, and cooperatives that have a tax identification number and are currently operating.
- Submission frequency: Periodically, either monthly or quarterly, depending on the scale of revenue in the preceding year.
What is tax reporting and what are the basic legal regulations?
The nature of tax filing in Vietnam adheres to the principle of self-declaration, self-calculation, and self-responsibility before the law. The core principles to remember:
- Mandatory: According to Tax Administration Law No. 38/2019/QH14, Businesses must file their tax returns on time even if they do not generate any revenue or expenses during the period (filing a blank tax return).
- Basic profile: Includes the declaration form value added tax (VAT), declaration form personal income tax (PIT), invoice report (if any) and estimated cost corporate income tax (CIT).
- Responsibility: The legal representative of the business is fully responsible for the accuracy of the data submitted.
Which entities are required to file tax returns?
This regulation applies consistently to all business models operating under the Enterprise Law:
Classification by revenue size
- Monthly filing: Businesses with total revenue exceeding 50 billion VND in the preceding year.
- Quarterly filing: Businesses with total revenue of 50 billion VND or less in the preceding year.
Newly established business
- By default, quarterly filing is applied.
- After operating for a full 12 calendar months, the revenue for that year will be used to determine the reporting cycle for the following year.
The current legal framework governs the tax declaration process.
Businesses need to apply the correct currently effective legal documents to avoid errors in forms:
- Law on Tax Administration No. 38/2019/QH14: General regulations regarding the obligations and rights of taxpayers.
- Decree 126/2020/ND-CP: Detailed instructions on deadlines for submitting tax returns, supplementary declarations, and cases where declarations are not required.
- Circular 80/2021/TT-BTC: The latest system of declaration forms is now available for use in the HTKK software.
- Decree 125/2020/ND-CP: Regulations detailing the levels of administrative penalties in the field of taxation and invoices.
Detailed steps for preparing tax reports for businesses.
Below is a standardized process consisting of 3 steps, implemented directly on the software and online system.
Step 1: Collect and verify the legality of invoices and supporting documents.
Data collection:
- Access the General Department of Taxation's electronic invoice portal to download the list of recurring purchase and sales invoices.
- Collect paper invoices and bank payment receipts generated during the period.
Validation check:
- Compare the buyer's and seller's information, tax identification number, and address on the invoice.
- Invoices for purchases of 20 million VND or more must be supported by non-cash payment documents (bank transfer from the purchasing company's account to the selling company's account) in order to be eligible for tax deduction and considered a deductible expense.
Step 2: Fill out the tax returns on the HTKK system.
Accountants log into the latest version of the Tax Declaration Support Software (HTKK) to enter data.
How to prepare a Value Added Tax (VAT) return.
Businesses can choose one of two declaration methods:
Deduction method (Form 01/GTGT):
- Sales invoice: Enter the revenue before tax and the tax rate into items 26 to 32a.
- Purchase invoices: Enter the total value of goods purchased in item 23, the input VAT amount in item 24, and the deductible VAT amount in item 25.
Direct method based on revenue (Form 04/GTGT):
- Enter the total revenue generated for each industry group so the system can automatically calculate the tax payable according to the prescribed percentage.
How to prepare a personal income tax return.
- Applicable template: Use form 05/KK-TNCN.
- Submission requirements: Monthly or quarterly submission is only mandatory if there are any deductions for employee personal income tax during the period (e.g., employees reaching a taxable salary level after deductions).
- Required input fields: Total number of employees, number of employees subject to tax deduction, total taxable income paid, and amount of personal income tax withheld.
Determining provisional corporate income tax liability.
- Regulations for submitting declarations: Businesses are not required to submit quarterly provisional corporate income tax returns.
- Payment obligations: Calculate your quarterly business results independently and proactively pay the resulting corporate income tax to the state budget.
- Payment deadline: No later than the last day of the first month of the following quarter.
- Important Note: The total amount of corporate income tax provisionally paid for the four quarters must not be less than 80% of the tax payable according to the annual tax return to avoid late payment penalties.
Report on invoice usage
- Apply: Most businesses use electronic invoices according to Circular 78/2021/TT-BTC You do not need to submit this report (the data has been automatically transmitted to the tax system).
- Exception: This only applies to businesses that use self-printed invoices or purchase them directly from the Tax Authority.
Step 3: Export XML data and submit the report via the electronic portal.
Output data: Select “Save” to save the declaration form in HTKK, then select “Export XML”. Do not rename the file after exporting.
Submit your report online:
- Visit the website: thuedientu.gdt.gov.vn Using a business digital signature account.
- Upload the exported XML file to the system.
- Plug in the USB Token (digital signature) and perform electronic signing.
- Click "Submit Declaration" and monitor your email for a confirmation notification from the Tax Authority.
The biggest risks businesses face when doing things themselves.
Attempting to file your own tax returns without experience often leads to significant risks:
- Late filing of tax return: Forgetting appointments, network system errors, or digital signatures expiring on the last day can result in administrative fines ranging from several million to tens of millions of VND.
- Incorrectly declaring the target number: Incorrectly deducting invoices that do not qualify for non-cash payment, and incorrectly accounting for expenses that are not deductible when calculating corporate income tax.
- Risks of back taxes and late payment penalties: Errors accumulated over many years were only discovered during tax settlement, leading to huge fines and back taxes.
- Optimal solution: Utilize professional tax reporting services to ensure your records are always on time, accurate, and up-to-date with the latest regulations.
Real-world Case Study: Lessons from a Tech Startup in Ho Chi Minh City
Situation: X Technology Joint Stock Company handled its own tax declarations in its first year of operation to save costs, instead of hiring a professional accountant.
Actual violations:
- Input VAT deduction for 5 invoices for the purchase of computer equipment (worth 35 million VND/invoice) paid using the director's personal credit card instead of the company account.
- Incorrectly declaring revenue from software services (which are exempt from VAT) under tax rate group 0% resulted in an incorrect allocation of shared input VAT.
Consequences of a tax audit:
- All deductible input VAT from invoices paid in violation of regulations will be disallowed.
- Subject to retroactive collection of VAT, corporate income tax, and late payment penalty of 0.031 TP3T/day.
- The total amount of fines and back taxes exceeded 120 million VND.
Solution:
- Company X contacted MAN to review, submit supplementary and amended tax returns, and provide direct explanations to the tax authorities to minimize financial losses.
Tax reporting services at MAN – A superior financial management solution.
To thoroughly address the risk of errors and save costs, MAN offers tax reporting services Vietnam's leading professional:
Team of experts: With over 30 years of practical experience, directly reviewing documents and representing businesses in explanations before the Tax Authority.
Flexible solution packages:
- Quarterly tax reporting servicesSpecifically for startups and small and medium-sized enterprises with few transactional documents.
- Comprehensive tax reporting servicesA comprehensive accounting department optimization solution for large-scale businesses.
MAN's commitment to quality in tax reporting services:
- Maximizing the protection of business interests and ensuring financial security.
- Proactively identify risks related to illegitimate expenses and optimize tax expenses in accordance with the law.
- We are committed to taking full responsibility for compensation if any errors arise due to professional negligence on the part of the MAN team.
Table of latest deadlines for filing tax returns and penalty rates.
Businesses need to be aware of tax filing deadlines and penalties to avoid unnecessary violations. The table below helps you quickly compare important tax filing deadlines and the latest administrative penalties. Decree 125/2020/ND-CP.
| Type of declaration / Violation | The deadline for submission is as stipulated by law. | Applicable administrative penalties (Decree 125/2020/ND-CP) |
| Monthly tax return | No later than the 20th day of the following month. | A warning will be issued if the submission is delayed by 1 to 5 days, provided there are mitigating circumstances. |
| Quarterly tax return | No later than the last day of the first month of the next quarter. | A fine of VND 2,000,000 to VND 5,000,000 will be imposed for late payment of 1 to 30 days. |
| Annual tax return | No later than the last day of the third month following the end of the fiscal year. | A fine of VND 5,000,000 to VND 8,000,000 will be imposed if payment is delayed by 31 to 60 days. |
| Late filing of tax return by more than 90 days | The deadline for payment has passed by 91 days or more, but no tax liability has arisen. | Fines ranging from VND 15,000,000 to VND 25,000,000 (the highest penalty). |
Practical insights from MAN tax experts on risk management.
- The nature of tax risk management: The key is to control the quality of documents right from the moment a transaction occurs, instead of waiting until the settlement period to process them.
- Common mistakes: In the early years, business owners often underestimate the importance of accounting, hiring only inexperienced part-time staff, leading to persistent systemic errors.
- Advice from MAN: Establish robust internal control procedures from the outset. If you lack the resources to operate your own accounting department, outsourcing to full-service tax reporting providers is a smart strategic move to optimize costs and ensure legal compliance.
Conclude
Accurate tax reporting is crucial for businesses to maintain high legal compliance and build a sustainable financial foundation. This requires a deep understanding of constantly changing tax regulations.
If your business is struggling to manage its own accounting system, MAN – Master Accountant Network is ready to assist you. We offer comprehensive service packages including tax settlement, tax accounting, tax consulting, and professional tax reporting services, committed to maximizing the protection of your business's interests and financial security.
Service contact information at MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
Frequently Asked Questions about Tax Reporting
Yes. Businesses are required to submit all periodic tax returns (blank returns) on time to avoid penalties for late payment.
Yes. Businesses are allowed to submit supplementary tax returns to correct errors on any business day, as long as it is before the tax authorities announce a decision to conduct an on-site inspection.
Businesses with revenue of 50 billion VND or less in the preceding year are required to pay quarterly; those with revenue exceeding 50 billion VND are required to pay monthly. Newly established businesses are automatically required to pay quarterly.
If the total amount of corporate income tax provisionally paid for the four quarters is less than the amount of tax payable at the end of the year, the business will be charged a late payment penalty of 0.031 TP3T/day on the difference.
Contact your provider immediately to renew online, then update your new digital certificate information on the e-Tax system before signing and submitting your tax return. Does a business that generates no revenue or expenses still have to file a tax return?
Is it permissible to resubmit a tax return if an error is discovered?
How can you distinguish between businesses that file tax reports monthly and those that file quarterly?
What are the penalties for late payment of quarterly provisional tax?
What should be done if a digital signature expires on the last day of the report submission deadline?
