Tax authorities act promptly after reports of home-based car parking businesses earning 1 billion VND annually

Key tax information residents should know. During the program “Accompanying with HKD to understand tax policy” organized by Hoan Kiem Ward and Hanoi Tax Department, many tax questions were answered. Q: If an HKD runs a grocery shop with annual revenue around 600 million VND, how is tax calculated? A: With anticipated revenue of 600 million per year, the entity falls into Group 2 (revenue from over 500 million to under 3 billion). VAT and personal income tax are calculated according to the percentage rates for the industry based on revenue. Example: for a trading business, the tax rate would be 1.5% (1% VAT and 0.5% personal income tax), payable quarterly. This is the optimal option, because for revenue from 500 million to 3 billion, HKD may voluntarily choose the profit-based method (revenue minus costs) instead of the percentage method. It is voluntary, not mandatory. Q: Using two bank accounts in parallel, one for HKD and one in the name of the head of the household, is that allowed? A: Decree 68 requires HKD to report bank accounts and e-wallets related to business activities to the tax authority. If both accounts relate to business activities, you should report both to ensure transparency of money received through those accounts and full revenue disclosure. Q: “If money is deposited into the HKD account to pay for goods, how do you avoid counting it as revenue?” A: If there is documentation proving the source of the deposit, this is not revenue. It is a normal transaction to pay for goods. Keep detailed records of money in and out on the bank account to clearly show cash flow. Q: Regarding initial charter capital when registering a business—if funds are deposited to increase capital beyond the charter capital, will this be considered revenue? A: If the deposit is not part of production or business activity and there is documentation (evidence) that this is a capital increase, the amount is not considered revenue. This depends on how HKD maintains records. Q: A bubble tea shop sells via Grab; Grab has already paid tax. Do I need to pay tax again for that revenue? A: If the platform (e.g., Grab) functions as a payment gateway, it will withhold and file taxes on behalf of HKD for revenue through Grab. HKD does not need to declare that revenue. However, if there are other channels without payment functionality (e.g., Zalo, Facebook), HKD should declare revenue from those channels to ensure monthly total revenue is accurate. Q: I run a home car parking service; if annual revenue exceeds 1 billion VND, do I need to issue invoices? If so, there will be too many invoices. A: The Hanoi tax authority representative stated that with annual revenue above 1 billion VND, you are required to use electronic invoicing. No industry is exempt from invoicing at this threshold. Future regulations may address issues related to issuing many invoices for HKD. Q: If previously you registered two bank accounts and now want only one, do you need to report this to the tax authority? A: You may adjust the number of bank accounts; however, you should proactively inform the tax authority of changes. Tax authorities care about HKD declaring revenue fully and transparently, regardless of whether the number of accounts increases or decreases.