Does the revenue for calculating taxable income of enterprises in Vietnam include the amount that have not collected?

What is the revenue for calculating taxable income of enterprises in Vietnam?

Based on Article 8 of the 2008 Corporate Income Tax Law amended by point a, clause 2, Article 6 of Law No. 71/2014/QH13 on amended taxes 2014, the revenue for calculating taxable income is the total amount from sales, processing, service provision, subsidies, surcharges, and premiums that the enterprise receives.

Revenue is calculated in Vietnamese Dong; in the case of revenue in foreign currency, the foreign currency must be converted into Vietnamese Dong at the average exchange rate in the inter-bank foreign currency market announced by the State Bank of Vietnam at the time the revenue in foreign currency arises.

Does the revenue for calculating taxable income of enterprises in Vietnam include the amount that have not collected? (Image from the Internet)

Does the revenue for calculating taxable income of enterprises in Vietnam include the amount that have not collected?

Based on Article 8 of Decree 218/2013/ND-CP regulating revenue to calculate taxable income as follows:

Revenue

The revenue for calculating taxable income follows the regulations of Article 8 of the Corporate Income Tax Law.

1. The revenue for calculating taxable income is the total amount from sales, processing, service provision including subsidies, surcharges, and premiums that the enterprise receives, regardless of whether the money has been received or not.

For enterprises declaring and paying value-added tax by the credit method, the revenue for corporate income tax calculation is the revenue excluding value-added tax. For enterprises declaring and paying value-added tax by the direct method on added value, the revenue for corporate income tax calculation includes value-added tax.

2. The time to determine revenue for calculating taxable income for sold goods is the time of transferring ownership or usage rights of the goods to the buyer.

The time to determine revenue for calculating taxable income for services is the time of completing the provision of services to the buyer or the time of issuing the service provision invoice.

...

Thus, the revenue for calculating taxable income is the total amount from sales, processing, service provision including subsidies, surcharges, and premiums that the enterprise receives, regardless of whether the money has been received or not.

What is revenue for calculating taxable income in specific cases in Vietnam?

Based on clause 3, Article 8 of Decree 218/2013/ND-CP the revenue for calculating taxable income in specific cases is regulated as follows:

- For goods sold on an installment basis, revenue is determined based on the one-time payment price, excluding interest from installment or deferred payments;

- For goods and services used for exchange or internal consumption (excluding goods and services used for the continuation of the production and business process of the enterprise), revenue is determined based on the selling price of similar or equivalent goods and services at the time of exchange or internal consumption;

- For processing activities, the revenue includes all revenues from processing, including wages, fuel costs, energy, additional material costs, and other expenses related to the processing;

- For property leasing activities, golf course business, and other services where customers pay in advance for multiple years, the revenue is the amount paid by the lessee or the service user per period according to the contract. In cases where the lessee or service user pays in advance for multiple years, the revenue for calculating taxable income is allocated over the years paid in advance or recognized as a one-time payment revenue. For enterprises enjoying tax incentives, the determination of the preferential tax percentage is based on the total corporate income tax payable in the years of advance payment divided (:) by the number of years paid in advance;

- For credit activities and financial leasing activities, the revenue is the interest earned from lending and financial leasing that occurs in the tax period;

- For transportation activities, it is the total transport fare revenue for passenger, goods, and baggage transportation occurring within the tax period;

- For electricity and clean water activities, it is the amount recorded on the value-added tax invoice;

- For insurance business and reinsurance, the revenue includes the insurance premium receivables; service fees (including damage assessment, claim settlement, third-party recovery, handling of items compensated 100%); reinsurance fees; reinsurance commission earnings and other revenue from insurance business, minus (-) the returned or reduced insurance premiums, reinsurance fees, and reinsurance commission earnings.

In the case of co-insurance, the revenue for calculating taxable income is the original insurance premium distributed according to the co-insurance ratio excluding value-added tax.

In the case of insurance contracts where payment is agreed upon per period, the revenue for calculating taxable income is the receivable amount arising in each period;

- For construction and installation activities, it is the value of the construction work, work item, or construction volume that has been accepted.

In cases where construction and installation activities do not include materials, machinery, or equipment, the taxable revenue excludes the value of those materials, machinery, or equipment;

- For business activities under a business cooperation contract without forming a legal entity:

+ In cases where parties in a business cooperation contract share business results by revenue from sales of goods and services, the revenue for tax calculation is the revenue of each party divided according to the contract;

+ In cases where parties in a business cooperation contract share business results by post-tax profits, the revenue for determining taxable income is the revenue from the sales of goods and services of the contract;

- For casino business, prize-winning electronic games, and betting activities, the revenue includes all revenue from these activities, including special consumption tax, minus (-) the prize amount paid to customers;

- For securities trading, it includes revenues from brokerage services, proprietary trading of securities, securities underwriting, investment consulting, fund management, the issuance of fund certificates, market organizational services, and other securities services under the law;

- For oil and gas exploration, it is the total revenue from selling oil and gas under the flat-rate transaction contract in the tax period;

- For derivative financial services, it is the revenue from providing derivative financial services carried out during the tax period.