In recent years, the cooperative entity model with many preeminent features has become the choice of many young people on the path of career. However, legally, the establishment of a Cooperative is just the beginning of the economic journey, then there are many other legal procedures that the Cooperative needs to pay attention to, typically the procedures about taxes and fees.
The following article will help you to have a specific view on some taxes and fees that the cooperative needs to pay attention to during its establishment and operation.
Legal grounds:
- Cooperative Law 2012;
- Consolidated Document 14/VBHN-VPQH consolidating law on enterprise income tax
- Consolidated Document 09/VBHN- VPQH consolidating detailing and guiding the implementation of the Law on Enterprise Income Tax
- Consolidated Document 20/VBHN-BTC on regulation on licensing fees
- After establishment, the cooperative needs to carry out the following tax and fee procedures:
a. Tax registration:
Cooperatives need to register for the tax calculation method (deductible or direct) and must submit a notice of VAT application to the tax office where the head office is located within 10 days from the date of issuance of the registration of establishment.
b. Declaration and payment of license fees:
Duration is the last day of the month if there is any generating activity or maximum 30 days if there is no output generating activity.
Based on the charter capital of the cooperative, the license fee is determined as follows:
+ Charter capital or investment capital of over 10 billion: 03 million / year;
+ Charter capital or investment capital under 10 billion: 02 million / year;
+ Branches, representative offices, business locations, non-business units, other economic organizations: VND 1 million / year.
Note: Cooperatives, unions of cooperatives (including branches, representative offices, business locations) operate in the agricultural sector according to Article 3 of Circular 09/2017 / TT-BNNPTNT or branches, representative offices, locations Business locations of cooperatives and unions of cooperatives in mountainous areas are exempt from license fees
c. Make tax declaration before the deadline for submitting the first tax return:
+ VAT: Declare on a quarterly basis, whether or not there is income, you must make a declaration.
+CIT: No declarations are required, but provisional amounts are required for each quarter and at the end of the year of settlement;
+ PIT: If arising PIT, the declaration has not yet arisen.
2. During the operation, cooperatives need to pay the following taxes and fees:
Depending on the actual business activities after establishment, the cooperative must pay taxes as prescribed:
a. License tax:
According to the above level of payment, the deadline is January 30 every year.
If the cooperative has paid the license fee before 01/01/2020, it is not required to submit a license fee declaration dossier for the following years if there is no change in the factors that serve as a basis for determining the fee payable.
- CIT:
+ CIT rate for cooperatives is 20% (applied from 01/01/2016).
+ Apply the tax rate of 10% to the income of cooperatives operating in the fields of agriculture, forestry, fishery, salt production not in areas with difficult or extremely difficult socio-economic conditions and the part of income forming undivided assets of the cooperative.
+ Exemption of corporate income tax on income from farming, breeding, farming and processing cooperatives of agricultural and aquatic products, and salt production; activities in the fields of agriculture, forestry, fishery, salt production in areas with difficult or extremely difficult socio-economic conditions and the undivided income of the cooperative.
* Note about time line:
- Time line for filing a return and provisional corporate income tax:
- Monthly declaration: By the 20th of the following month;
- Quarterly declaration: No later than the 30th day of the first month of the following quarter (April 30, July 30, October 30, and January 30);
- Annual declaration: No later than the 30th day of the first month of the following year;
- Declare for each time of occurrence: No later than the 30th day since the date of occurrence.
- Time line for filing annual CIT finalization: No later than 90 days from the end of the calendar year (March 30) or fiscal year.
- VAT:
Based on each type of goods and services that the cooperative produces and provides, the cooperative must pay VAT at the rates of 0%, 5%, 10% respectively.
- New cooperatives established under 12 months or less than 1 fiscal year shall declare VAT quarterly.
- Deadline for filing VAT declarations and tax amounts: No later than the 30th of the following quarter (if declared quarterly) or the 20th of the following month (if declared monthly).
- Whether or not there is any taxable income, you must submit a VAT return monthly / quarterly.
- PIT (for employees working in cooperatives):
- Cooperatives declare VAT quarterly, then declare PIT quarterly;
- Cooperatives declare VAT monthly, then declare PIT on a monthly basis (if the amount of PIT incurred in the month is> 50 million) or quarterly (if the amount of PIT incurred in the month is <50 million).
- Agricultural land and non-agricultural land use tax:
- For agricultural land: no later than January 30 every year.
- For non-agricultural land: you can choose to pay taxes once or twice a year and have to fulfill tax obligations no later than December 31 every year.
In addition, depending on specific activities and business subjects, cooperatives also have to pay taxes such as environmental protection tax; Import tax and export tax; Special consumption tax; ….
Please contact us for detailed advice.
T2H Law Liability limited company
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