How to file taxes for a private preschool in 2026 to ensure safe operation.
Misconceptions about tax exemptions are putting many preschools at significant risk. Get updated on regulations and tax filing procedures for private preschools in 2026 to ensure safe operation.
The truth about the policy of socializing education.
Many school owners still believe that private preschools, being part of a socialized business, are completely tax-exempt. This misconception often leads to negligence in accounting practices, resulting in serious legal risks.
In reality, the law stipulates that private preschools are only entitled to preferential tax policies (such as applying a lower tax rate than the normal rate), but are not completely exempt from tax liability.
Ignoring or reporting inaccurate or delayed information when implementing electronic invoices will expose schools to the risk of being subject to back taxes and heavy administrative penalties.
4 Types of taxes that preschools are required to declare.
To operate legally, schools need to understand and fulfill their obligations regarding the following four basic types of taxes and fees:
1. Corporate Income Tax (CIT)
This is the area where schools benefit most from government policy. Instead of the 20% rate applied to typical businesses, income from educational and training activities is subject to a preferential tax rate of only 10% throughout its operating period (according to Circular 78/2014/TT-BTC).
Important note:To qualify for the 10% tax rate, schools are required to have a license to operate preschool education and to separately account for income from education. If the school has other sources of income besides education (such as renting premises, interest on deposits not related to education), that income is still subject to the 20% tax rate.
2. Value Added Tax (VAT)
This category often causes the most confusion for the accounting department. The key lies in clearly separating the two revenue streams:
Revenue not subject to tax:This includes tuition fees for teaching and childcare services.
Revenue subject to VAT:This includes meal costs, transportation, uniform sales, field trip fees, or extracurricular club fees. These additional services are typically subject to a 10% tax rate (if registered under the deduction method).
Combining tuition and meal fees into a single amount and issuing "tax-free" invoices for everything is against regulations. This action will result in the school being required to pay back VAT on all meal revenue for many years.
3. Personal Income Tax (PIT)
The school is responsible for withholding, declaring, and paying taxes on behalf of teachers and staff based on the progressive tax rate schedule. This process needs to be carried out periodically, either monthly or quarterly, to ensure employee rights and compliance with the law.
4. Other fees
Business license fee:Annual payments are made, with the amount based on the registered capital (for companies) or the previous year's revenue (for household businesses).
Non-agricultural land use tax:This applies if the school owns or has been granted the right to use the land.
Deadly mistakes when filing taxes
The increasingly stringent management by tax authorities, especially through the electronic invoicing system, makes the following errors easier to detect:
Mistake 1:Combining Tuition and Service Revenue: As analyzed, failing to separate "tuition" (tax-free) and "meal expenses" (tax-payable) will distort output VAT figures. This error directly affects deductible expenses when calculating corporate income tax, providing grounds for penalties from relevant authorities.
Mistake 2:Lack of documentation for expenses: All expenses that are to be considered reasonable expenses (to be deductible when calculating corporate income tax) must have valid documentation.
Teacher salary payment: Requires employment contract, signed payroll statement, and personal income tax deduction certificate.
Food expenses: Input VAT invoices from suppliers or clear sales contracts are required.
The lack of these documents will result in expenses being disallowed, leading to a significant increase in corporate income tax payable during final settlement.
Table of income and expenditure classifications for accounting in private preschools.
1. Revenue classification table (For VAT declaration purposes)
The core principle is: Education cash flows (non-taxable) and Service/Trade cash flows (taxable) must be separated.
| Receipt amount (Details on the receipt) | Nature of operation | VAT rate (Proposed) | Notes for Accountants |
| Tuition fees for the main course | Teaching, caring for, and nurturing. | Not subject to tax | When issuing an invoice, select the option: Not subject to tax (KCT). |
| Summer school tuition | Teaching, caring for, and nurturing. | Not subject to tax | The same applies to tuition fees for regular courses. |
| Meal expenses (for day students) | Food and beverage services | 10% | It must be separated from tuition fees. |
| Transportation fee | Transportation services | 10% | |
| Money from selling uniforms and backpacks. | Trade (Sales) | 10% | Input invoices from the garment manufacturing unit are required. |
| Picnic and sightseeing money | Tourism/Event Organizing Services | 10% | |
| Tuition fees for talent/club programs. | Other training services | Tax-free / 10% | Depending on whether the school teaches in-house or partners with an external center (the partnership agreement needs to be carefully reviewed). |
| Admission/Enrollment Fee | Other income from education | Not subject to tax | Typically included in educational operating revenue. |
2. Classification of expenses (For corporate income tax calculation)
On the tuition fee invoice sent to parents, it's advisable to separate the amount into two distinct lines: "Tuition Fee" and "Meal/Service Fee" instead of a single total figure. This small action makes it easier to explain the charges during tax audits.
| Common expenses | Documents that must be kept on file. | Note the risks. |
| Salaries and bonuses for teachers and staff. | 1. Employment contract. | The tax authorities will disallow expenses if the salary is high but social insurance contributions are not paid or personal income tax is not deducted according to regulations. |
| 2. Time sheets & Payroll statements (with signatures). | ||
| 3. Application documents for personal income tax identification number. | ||
| 4. Transfer documents/payment vouchers. | ||
| Buying groceries (Supermarket/Company) | 1. VAT invoice (Electronic invoice). | |
| 2. Delivery/Receipt slip from the seller. | ||
| 3. Payment documents (payments over 20 million VND must be made via bank transfer). | ||
| Buying groceries (Local market) | 1. Statement 01/TNDN (Purchases without invoices). | This only applies when purchasing directly from farmers/fishermen. If buying from traders at the market, a receipt is still required. |
| 2. The seller's national identity card (photocopy). | ||
| 3. Payment documents. | ||
| Renting premises (individual) | 1. Notarized lease agreement (if the term is long). | If the rent exceeds 100 million VND per year, the landlord must pay taxes for it to be considered a valid expense. |
| 2. Proof of tax payment on behalf of the landlord (if the contract stipulates that the taxpayer is responsible for payment). | ||
| 3. Proof of rent payment. | ||
| Electricity, Water, Internet | The invoice bears the name, address, and tax identification number of the school. | If the utility bills are in the landlord's name (because you're renting), a payment agreement for utilities is required, along with the rental contract. |
