Common tax and accounting questions from clients.

Here are some common questions about taxes and accounting that clients frequently ask when using accounting and tax services:

1. What taxes do businesses need to pay? Businesses are typically required to pay the following basic taxes:

   • Value Added Tax (VAT): Businesses need to declare and pay VAT on a periodic basis.

   • Corporate Income Tax (CIT): This tax is calculated based on the company's profit after tax.

   • Personal Income Tax (PIT): This tax applies to individuals with income from salaries, bonuses, or other sources.

   • Business License Tax: This tax applies to all businesses when they are established and begin operations.

   • Import-Export Tax: For businesses engaged in the import or export of goods.

2. Does a business need to prepare monthly financial reports? According to the law, businesses are required to prepare annual financial reports to report their financial situation and business activities. However, if the company operates on a large scale or at the request of tax authorities, monthly or quarterly financial reports may also be required.

3. How can a business legally reduce corporate income tax? To reduce corporate income tax legally, a company can take the following actions:

   • Deduct reasonable expenses: Business-related expenses can be deducted, reducing taxable income.

   • Use tax incentives: Businesses can take advantage of government tax policies, such as tax incentives for small and medium-sized enterprises, or businesses investing in priority sectors or special regions.

   • Manage cash flow and costs: Optimizing costs, revenues, and investments can help reduce the tax amount due.

4. Can a company outsource accounting and tax services? Yes, many companies today choose to outsource accounting and tax services to save on personnel costs and ensure that tasks are completed according to the correct procedures and in compliance with the law. Outsourcing also allows businesses to focus on their core operations.

5. Does a business need to report tax status monthly? Depending on the type of tax and the regulations of the tax authorities, businesses may need to submit tax reports monthly or quarterly. These reports may include VAT, corporate income tax (CIT), and personal income tax (PIT).

6. How can a business ensure full compliance with its tax obligations? To ensure full compliance with tax obligations, businesses should:

   • Develop a clear tax plan: Ensure that taxes to be paid are accurately estimated and submitted on time.

   • Use professional accounting and tax services: Accounting and tax professionals will help businesses comply with legal tax requirements and optimize tax declarations.

   • Maintain valid documentation: Tax-related documents should be kept accurately and completely to facilitate easy verification when necessary.

7. When should a business submit its financial reports to the tax authorities? A business should submit its financial reports to the tax authorities when required or according to the legal schedule, usually annually. These reports are used to calculate the company’s tax obligations.

8. How does a business claim a VAT refund? A business can claim a VAT refund if the input VAT is greater than the output VAT for the period. Conditions for VAT refund include ensuring the legality of the documents, declaring the refund in the correct process, and submitting complete documentation to the tax authorities.

9. Does a business need to store accounting and tax documents long-term? Yes, businesses must store accounting and tax documents for at least 5 years as required by Vietnamese law. These documents include accounting books, financial reports, and tax receipts.

10. How does a business calculate and pay personal income tax (PIT) for employees? Personal income tax for employees is calculated based on income from salaries, bonuses, and other allowances. The company must withhold PIT from employees' salaries based on a progressive tax scale and pay it to the tax authorities periodically.

If you have any questions or need assistance with taxes and accounting, don’t hesitate to contact TGS Vietnam for expert advice and timely support.

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