10 Startup Tips
Chapter 21: Tax
This is quite a problem because:
That is the reality of life.
Some people are under pressure from tax evasion
to the point of affecting the development of their businesses.
Don’t let taxes get in the way of your business.
Taxes do not bring success.
As soon as I wrote this content,
it started to get outdated.
“There is a loophole in taxation
– cars have not been taxed according to age,
engine capacity (and mileage) since April 2002.
Now, cars are taxed according to their CO2 emissions
and it’s not like engine life/displacement.” (David)
It’s important to understand future tax policies,
even if you have an accountant who specializes in tax returns.
Don’t worry too much and relax before learning about it.
This chapter is not a guide to tax regulations.
It’s just wise tips and specific advice.
In Vietnam, the General Department of Taxation
under the Ministry of Finance is
the agency performing the management function for domestic revenues,
taxes, fees, charges and other state budget revenues (collectively) is tax);
organize the implementation of tax administration
according to the provisions of law
(the lower levels are the Tax Department and Tax Department).
Beginners can find out about tax issues on the website www.gdt.gov.vn,
section “Tax Answers” or call (043)9.724.204/9,724.209
Things to keep in mind when starting a business:
You need to choose the form of business you will do.
Just like other considerations,
taxes should always be on your mind.
If you’re a sole trader,
you’ll be taxed as an individual
– all of your business profits are taxed just like direct wages.
With a limited liability company,
your business will be an independent legal entity.
You will be taxed less on additional profits than as a sole trader.
You may also be paid dividends at a lower tax rate.
However, as an employee in the company,
you will also be taxed on personal income.
For this reason,
some entrepreneurs pay themselves very low salaries
and instead with regular dividend payments
(as long as their business is profitable).
Moving from Employee to Start-up:
There are many factors to consider when you’re transitioning
from a salaried worker to a business starter.
If you lose money in your first year of business,
you can claim a refund of the taxes
you paid during your years as an employee.
You should also check to see if you qualify for government tax credits.
Cash Turnover and Taxes:
An unexpected and unplanned tax bill can cause a small business to fail.
If you’re in the UK,
you wouldn’t want the Tax and Income Office stalking you to pay,
because they have so much power.
But complaining is also useless
– it’s the business’s fault for not anticipating that bill.
A hard rule to follow if you’ve just been taxed on personal income.
Get in the habit of saving money all year
so you can pay your tax bill.
You can also pay taxes several times a year.
What you can and can’t ask for:
Ask your accountant for specific advice.
Here are some empirical rules:
You can request:
Some expenses if you work from home
(if there is a “other expenses” section)
Business gifts (limited),
not food and drinks
(for example, meals when you go on a business trip)
• Employee entertainment (limited)
The cost of hiring your spouse
(if you can prove they actually do and you pay them the current contract)
Expenses that cannot be claimed:
• Your personal income and personal expenses
• Entertainment and dining with customers
• Commuting to your workplace
• Parking tickets and fines
I know some people who have turned claiming tax refunds into art.
One person recorded the purchase
of a luxury home music system in the business ledger
as equipment for showing employee training DVDs.
Another found that a product show only happened on holiday and in a warm country,
so he combined the trip with a real business trip.
“My basic challenge is how to claim first class airfare
as a ‘necessary business expense’.”
(Claire, jewelry designer)
I love Claire’s style!
If you want a chance to improve,
you can sign up for an airline loyalty card.
However, before you take other direct methods,
I recommend reading the “tax evasion” section at the end of the chapter.
Business Tip: Claim a Tax Refund
Remember, the official phrase is “all and exclusively for business”.
if you take a trip to meet friends and do some business there,
it may be difficult for you to ask for forgiveness
Calculate everything here.
Equipment: If you purchase equipment for your business,
you cannot claim a full refund of the cost of the equipment in the first year.
Instead, you can claim tax relief in the form of “capital tax exemptions.”
The first car the company gives you can’t be better than you expected
Cars and taxes:
This is one of the most complicated parts of taxes.
Basically, the government doesn’t like fat people scurrying
around the city in German cars making noise for neighbors
and polluting the environment.
If the business grants you a car,
you’ll find that taxes are a real hassle.
It will be easier if you keep this car personally,
pay all repair and insurance costs.
You can then calculate the distance traveled
to do the business at the rate of 45 cents a mile.
And after a year, this revenue will pay for your car.
Business secret: Stay away from shiny cars
You don’t have to buy fancy cars to impress customers:
Customers almost never see it.
I used to drive a dilapidated Renault that a friend called a “clown’s car”.
After one meeting,
the client followed me all the way to the parking lot.
I panicked and said goodbye,
passed the car,
and ducked around the corner
until the other man returned to the office.
Then I sped out and quickly drove away.
It will make customers feel jealous
and worry if they will pay you too much.
A great advertising agency mission statement is: “Macs, not Mercs.”
If your annual sales exceed a specified limit,
you will have to register for VAT.
In Vietnam, VAT payers are organizations
and individuals engaged in the production
and business of goods
and services subject to VAT in Vietnam,
regardless of industry, form,
or business organization collectively referred to as business establishments)
and other organizations and individuals that import goods
or purchase services from abroad are subject to VAT
(collectively referred to as importers).
VAT is a value added tax at each stage of production.
From the extraction of raw materials to the finished product
until it reaches the customer.
This amount will be calculated gradually
until the last person holding the product must pay.
This is a rather wise government policy,
as you will essentially be the tax collector for the government.
The main problem with VAT is paperwork and administration,
but the government is doing everything to simplify it.
• Tax rate 0%
• Tax rate 5%
• Tax rate of 10%
• Goods and services not subject to VAT
tax-exempt items include exported goods and services,
including processed goods for export;
construction and installation of works abroad
and works of export processing enterprises;
goods sold to duty-free shops;
goods and services not subject to export VAT
(except for international transport;
goods and services provided directly for international transport;
travel and tourism services abroad;
postal and telecommunications services transfer
from abroad to Vietnam;
securities investment abroad, etc.).
Non-taxable items are those that
the government decides are “good” for us. Include:
Products of cultivation (including planted forest products),
livestock, aquaculture and caught seafood,
which have not yet been processed into other products
or have undergone normal preliminary processing
of self-producing organizations
and individuals export, catch,
sell, and import.
Products are livestock breeds,
embryos, genetic materials at the stages of cultivation,
importation and trading.
Salt products include:
salt produced from sea water,
natural rock salt,
Some imported goods
Land use right Transfer
The main difference between the two is that
if you only trade duty-free items,
you cannot apply for VAT.
And as you can imagine,
the definitions of what is “good”
and “not good” are ambiguous,
and they are often the subject of legal debates about fairness.
There was a sizable
and costly legal battle
when the bakers of Jaffa Cakes argued
with the UK Internal Revenue Service that
their product was a “gato cake”,
therefore not subject to VAT,
and not a “cake” regulations”
– products are subject to VAT.
The General Department of Taxation has full information on this issue
and is regularly updated.
If you are unsure about something,
It’s important that you do it right because,
if they find you’re not taxed on an item that should be taxed,
they may ask you to refund your previous taxes,
and this amount will take directly from your profit.
Also, be careful with subdividing your services.
If we put the total cost of production
and transportation into a certain book,
the tax rate will be zero.
If we calculate
addition to the shipping fee,
we will charge VAT on that.
you will have to file a tax return every quarter.
You can choose to pay monthly
if you are someone who likes to bother others,
remembers long and is claiming tax back.
There are also simpler tax programs for small businesses.
These programs include:
Below your set sales,
you can work with the VAT guys to estimate the full year,
based on your previous year’s sales.
You can then pay this monthly by direct debit
and adjust the balance at the end of the year.
You can adjust this all year if circumstances change.
This can help with cash flow
because you only have to calculate VAT
for the money you receive and pay,
not the bills you have issued and received.
Fixed rate method:
This calculates VAT simply as a fixed percentage of sales.
The percentage depends on the industry you are in.
However, you cannot claim a refund of any VAT paid,
as this is considered as part of the percentage method.
If you sell directly,
you will find it quite difficult
to write a VAT invoice for each purchase.
There are several retail methods that can help you.
Bad debts support:
You can claim this if you don’t receive payment.
You must keep records for six years.
If the VAT officer checks,
they can review the books for the last three years.
For more information on this,
call the General Department of Taxation’s helpline
at (043) 9.724.204/9.724.209.
If you make a mistake:
The VAT officer will impose mandatory breaking penalties
on late payments and errors.
However, they have a duty to relax with small businesses.
If you’re having this problem,
or making a mistake,
follow the business rules:
give them a call and let them know.
They’ll be more understanding
if you admit your problem than let them think you’re trying
to drag a problem away too quickly.
Tax evasion and cash at the fund
There is a fine line between playing by the rules to your advantage
and breaking the rules altogether.
It’s tempting to start treating all your income as your own money
and be less cautious about reporting it to the tax authorities.
You should avoid this for a lot of reasons:
You’ll get caught:
The Internal Revenue Service was established long
before you started your business,
and you’re not the first to think of tax evasion tricks.
Don’t underestimate their tracking ability.
local landlords began renting out the driveway to their homes
as parking spaces.
The Internal Revenue Service is wise enough to know this.
The tax inspectors came
and checked who was doing this,
looked for ads in the local paper and asked around.
They then check to see
if these homeowners are reporting this income on their tax returns.
Similarly, if someone pays you for a freelance job,
you must include this
because it will appear on the other company’s client list,
and the Internal Revenue Service will also track it. there.
You don’t want to draw attention to the Internal Revenue Service:
Investigations can be time consuming and expensive.
this will be quicker
if you file your tax return on time,
pay it right away,
and don’t have any unusual numbers
(they know what businesses like you should file).
That’s bad business:
You need to be disciplined and think long-term about your business.
It is useless when in one month you spend a large amount
of money buying beautiful things
and then in the following months you run out of money and go bankrupt.
Get in the habit of paying yourself a regular salary
and a bonus for making a big deal.
At the same time,
being self-employed and having money is about being free.
If you spend your life just focusing on hoaxes and tax evasion,
your original purpose will be gone.