Criteria for determining micro enterprises according to the law

What are the criteria for determining a micro-enterprise? What benefits do micro enterprises enjoy? Micro-enterprises pay corporate income tax based on what criteria?

1. What are the criteria for determining micro-enterprises?

Pursuant to Clause 1, Article 5 of Decree 80/2021/ND-CP regulating micro-enterprises as follows:

Criteria for determining small and medium-sized enterprises

1. Micro-enterprises in the fields of agriculture, forestry and fisheries; The industry and construction sector employs an average of no more than 10 people per year participating in social insurance and the total revenue of the year is not more than 3 billion VND or the total capital of the year is not more than 3 billion VND.

Micro-enterprises in the field of commerce and services employ an average of no more than 10 people participating in social insurance and the total revenue of the year is not more than 10 billion VND or the total capital of the year is not exceeds 3 billion VND.

According to the provisions of law, your company meets the regulations of a micro-enterprise operating in the field of commerce and services, including criteria related to the average annual total number of insured employees, revenue and investment capital.

Therefore, your business will be governed by regulations related to small businesses and medium.

2. What typical benefits do micro-enterprises enjoy?

Issuing written labor regulations is not required

Pursuant to Clause 1, Article 69 of Decree 145/2020/ND-CP stipulates as follows:

Labor regulations

Internal regulations Labor regulations in Article 118 of the Labor Code are stipulated as follows:

1. The employer must issue labor regulations. If employing 10 or more employees, the labor regulations must be in writing. If employing less than 10 employees, it is not required to issue written labor regulations but must agree on the content of labor discipline and material responsibilities in the labor contract.

Thus, the company is not required to issue paper labor regulations, however, provisions related to labor discipline and material responsibilities must be mentioned in the labor contract.

Micro-enterprises are allowed to apply simple tax and accounting administrative procedures

Pursuant to Clause 2, Article 10 of the Law on Business Support Small and medium enterprises 2017 stipulates as follows:

Tax and accounting support

2. Micro-enterprises are allowed to apply tax administrative procedures and simple accounting regimes according to the provisions of tax and accounting laws.

Micro-enterprises are assigned to be in charge of accounting without being required to appoint a chief accountant

Pursuant to Article 8 of Circular 132/2018/TT-BTC as follows: following:

Organizing the accounting apparatus and accountants

1. Micro-enterprises are assigned to be in charge of accounting without being required to appoint a chief accountant. Micro-enterprises that pay corporate income tax at a percentage of revenue from sales of goods and services can organize their own accounting work according to the provisions of Chapter III of this Circular.

2. The arrangement of accountants for micro-enterprises must ensure not to violate the provisions of Article 19 of Decree No. 174/2016/ND-CP dated December 30, 2016 of the Government detailing a number of articles of the Accounting Law.

3. Micro-enterprises are allowed to sign contracts with accounting service units to hire accounting services or chief accountant services according to the provisions of law. The list of units qualified to provide accounting services is published and periodically updated on the Electronic Information Portal of the Ministry of Finance.

Accordingly, the company is not required to appoint a chief accountant and can hire financial services, corporate income tax according to the percentage of revenue from sales of goods and services.

3. Are micro-enterprises required to pay taxes or not?

Pursuant to Clause 2, Article 10 of the Law on Support for Small and Medium Enterprises 2017, it is stipulated as follows:

Tax and accounting support

2. Micro-enterprises are allowed to apply simple tax administrative procedures and accounting regimes according to the provisions of tax and accounting laws.

At the same time, based on Article 16 of Circular 132/2018/TT-BTC, it is stipulated as follows:

Accounting methods

1. Micro-enterprises that pay corporate income tax calculated at a percentage of revenue from the sale of goods and services, if not required, are not required to open accounting accounts but only record applications in accounting books (only record arising economic transactions in items that need to be monitored without reflecting the corresponding accounts) to track revenues and income, taxes payable to the state, salaries and salary deductions,… to serve the determination of the business’s tax obligations. with the state budget.

2. In case a micro-enterprise that pays corporate income tax calculated at a percentage of revenue from the sale of goods and services needs to apply accounting accounts like enterprises that pay corporate income tax according to the method of calculating taxable income to serve the management requirements of production and business activities of the unit, they can apply the regulations in chapter II of this Circular to do so.

According to this regulation, the company has the right to choose whether to open accounting accounts or not. to track revenues and income, taxes payable to the state, salaries and salary deductions,… serving to determine the tax obligations of businesses to the state budget.