Updated initial tax registration procedure for businesses

When establishing a business, completing the initial tax registration procedure is one of the important factors that helps businesses comply with tax regulations. This not only ensures the business operates legally but also guarantees that financial obligations are fulfilled. However, the procedures and documentation required for tax registration can be challenging, especially for newly established businesses. Therefore, this article will provide detailed information about the initial tax registration procedure and required documents for businesses, with the latest updates.

Things to note before completing the initial tax registration procedure for businesses

Before submitting the initial tax registration documents to the District Tax Department, businesses need to complete the following 3 steps:

Install the signboard at the company’s headquarters

The signboard must display basic information such as the company name, tax code, and the address of the head office. The tax authority will inspect the registered address to confirm the signboard installation and the business’s operational status.

Purchase a digital signature (digital certificate/token)

The business needs to register to use a digital signature to submit the business license fee declaration and tax reports through the General Department of Taxation’s portal. The digital signature is also used for electronic signatures on the company’s management software, including social insurance, customs, and electronic invoices.

Open a bank account for the company and deposit money into the account

After obtaining the digital signature, the business will use it to make transactions for paying the business license fee to the State Treasury through the company’s bank account.

Initial tax registration procedure for businesses

After completing the business registration procedure at the Department of Finance, the business must complete the initial tax registration procedure at the District Tax Department where the business’s headquarters is located. If the business is managed by the Tax Department, it should submit the documents to the Provincial/City Tax Department where the headquarters is located. The initial tax registration procedure typically includes the following steps:

Step 1: Register the tax code

According to Article 30, Clause 1 of the 2019 Tax Management Law (guided by Article 4 of Circular 105/2020/TT-BTC), businesses or business households must register for tax and receive a tax code from the tax authorities before starting business operations or incurring any obligations with the state budget.

Step 2: Submit the initial tax declaration

Businesses need to submit the initial tax declaration, which includes the following types of tax:

• Value-added tax (VAT): The business needs to determine the VAT declaration method (either the deduction method or direct method).

• Corporate income tax (CIT): The business will choose the appropriate tax calculation method (either lump-sum or by rate).

• Personal income tax (PIT): For businesses with employees, personal income tax for workers must be declared.

• Other taxes: Depending on the business’s industry and type of activity, there may be other taxes, such as special consumption tax, environmental tax, etc.

Step 3: Submit the tax declaration and related documents

After completing the declaration, the business must submit the tax declaration and related documents to the tax authority. The tax declaration can be submitted online via the electronic tax system or in person at the tax office.

Step 4: Pay taxes

Based on the submitted tax declaration, the tax authority will determine the amount of tax to be paid. The business needs to pay the taxes on time to avoid penalties for late payment.

Documents for initial tax registration

The documents required for initial tax registration include the following:

• Business registration certificate (notarized copy)

• Tax code certificate (issued by the tax authority)

• VAT tax declaration form (Form 01/GTGT) for businesses declaring value-added tax

• Corporate income tax declaration form (Form 01A/TNDN) if the business is required to declare this tax

• Personal income tax declaration form (Form 05/NC) if the business has employees and must declare personal income tax

• Documents related to business activities (if specific requirements exist based on the industry)

• Lease contract for office or assets (if any) used to determine costs for tax declaration purposes

Updates on the latest regulations for tax registration

To support businesses in the tax registration process, the tax authority has made many changes in regulations and administrative procedures. Specifically:

• Electronic tax registration: The electronic tax system has been widely implemented, allowing businesses to submit tax declarations quickly, accurately, and with reduced errors.

• Tax registration deadlines: Businesses need to be aware of the regular tax declaration deadlines to avoid late submission penalties. Tax declarations are typically due before the 20th of the following month for VAT and personal income tax.

• Penalty system: If businesses fail to submit tax declarations on time, they will be penalized according to the law.

Penalties for late submission of tax registration documents

If businesses fail to submit tax registration documents on time or submit incomplete documents, they will be penalized as follows:

• Late submission of tax declarations: If the tax declaration is not submitted on time, businesses will be fined from VND 500,000 to VND 1 million for the first late submission. Subsequent violations will incur higher fines based on the severity of the violation.

• Late tax payment: If the business does not pay taxes on time, the fine will be 0.03% per day on the overdue tax amount.

• Incorrect tax declaration: If errors are found in the tax declaration, the business will be fined from 10% to 20% of the underpaid or incorrect tax amount.

Additionally, if there are repeated violations or tax fraud, businesses may face heavier fines or criminal prosecution, depending on the severity of the violation.

Benefits of complying with tax declaration regulations

Complying with tax declaration regulations helps businesses avoid legal risks and enhances the business’s reputation and long-term viability. Additionally, proper tax declaration enables businesses to settle taxes accurately and take advantage of any available tax incentives.

Tax registration support services by BKC Law

BKC Law provides comprehensive services to help businesses fulfill their tax obligations accurately and on time, minimizing legal risks. Our team of experienced professionals supports businesses in everything from advising on taxes to electronic tax registration, drafting and submitting tax documents.

Additionally, BKC Law also assists businesses in correcting tax declarations when errors occur and resolving tax disputes if they arise. Especially, with in-depth knowledge of tax regulations, we are committed to helping businesses fully comply with legal requirements, avoid penalties, and optimize potential tax benefits. Our services not only help businesses save time but also ensure that all tax procedures are performed correctly, transparently, and effectively.

For free legal advice at BKC Law, you can contact our lawyers at the following details:

Phone: 0901 3333 41
Email: info@bkclaw.vn

District 1 Office: 9th Floor, Diamond Plaza, 34 Lê Duẩn, District 1, Ho Chi Minh City
Binh Tan Office: 41 Tên Lửa, Binh Tan, Ho Chi Minh City

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