Do household businesses have to register for taxes?

Business households is a popular form of business chosen by many people because of the advantages that this form brings. However, this is not a type of enterprise according to the law. So, what is a business household? Is tax registration required? What are the tax registration procedures? This article shares in detail the contents related to Business Households according to current legal regulations. 

CSPL:  Articles 5, 30 of the Law on Tax Administration 2019

             Article 79, 81 Decree 01/2021/ND-CP

             Article 5b Circular 01/2021/TT-BKHDT

1. What is a business household?

– A business household is registered to be established by an individual or household members and is responsible with all of their assets for the business activities of the household. In case household members register a business household, one member shall be authorized to act as the business representative. The individual registering a business household, the person authorized by household members to represent the business household is the business household owner.

– Rights and obligations of the business household owner, household members participating in business household registration

+ The business household owner shall carry out tax obligations, financial obligations and business activities of the business household in accordance with the law law.

+ The business household owner represents the business household as a requester to resolve civil matters, plaintiff, defendant, person with related rights and obligations before the Arbitrator, Court and other rights and obligations according to the provisions of law.

+ The business household owner can hire others to manage and operate the business activities of the business household. In this case, the business household owner and household members participating in business household registration are still responsible for debts and other property obligations arising from business activities.

+ The business household owner and household members participating in business household registration are responsible for the business activities of the business household.

+ Other rights and obligations as prescribed by law.

2. Does a business household have to register for tax?

Pursuant to the provisions of Clause 1, Article 30 of the Law on Tax Administration 2019 about subjects of tax registration and issuance of tax codes:

“Article 30. Subjects of tax registration and issuance of tax codes

1. Taxpayers must register Register for tax and be granted a tax code by the tax authority before starting production or business activities or incurring obligations to the state budget. Tax registration subjects include:

a) Enterprises, organizations, and individuals carry out tax registration according to the single-window mechanism along with business registration, cooperative registration, business registration according to the provisions of the Enterprise Law and other relevant laws. customs;

b) Organizations and individuals not falling into the cases specified in Point a of this Clause shall register tax directly with the tax authority according to the regulations of the Minister of Finance.

…”

In addition, according to the provisions of Clause 1, Article 5 of the Law on Tax Administration 2019 on Principles of tax management:

“Article 5. Principles of tax management

1. All organizations, households, business households, and individuals have the obligation to pay taxes according to the provisions of law.

…”

Conclusion essay: Comparing from the above two regulations, business households are tax payers and must register for tax according to the law.

3. Order and procedures for registering a business household tax code

Pursuant to the provisions of Article 5b of Circular 01/2021/TT-BKHDT, the business household code is also the tax code of the business household. Therefore, the business household code is issued after carrying out the registration procedures to establish a business household and is also the tax code of that business household.

The specific order and procedures for registering to establish a business household are as follows:

3.1. Registration dossier

– Business household registration dossier includes:

• Application for business household registration;
• Individual legal documents for business household owners, household members registering business households in case household members register business households;
• Copy of minutes meeting with household members on establishing a business household in case household members register a business household;
• Copy of authorization document from a household member to a member who owns a business household in case household members register a business household.

3.2. Order and procedures

Step 1. Submit the application

• The registrant submits the application at the one-stop department at the Finance – Planning Department of the District People’s Committee where the business household is headquartered.
• The Finance – Planning Department receives the application and returns to the submitter a Receipt of receipt of the application for registration of establishment of the business household. business.

Step 2. Appraisal and return results

• Finance – Planning Department issues the Business Registration Certificate within 03 working days from the date of receiving the application.
• In case the application is not valid, the Finance – Planning Department will send a written notice of the contents that need to be amended and supplemented to the registrant within 03 days. working days from the date of receipt of the application.