Is income from performance of contracts on scientific research and technological development subject to CIT in Vietnam?

Is income from performance of contracts on scientific research and technological development subject to CIT in Vietnam?

Based on Clause 3, Article 4 of the Law on Corporate Income Tax 2008, there are specific regulations regarding tax-exempt income as follows:

Tax-Exempt Income

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2. Income from providing technical services directly serving agriculture.

3. Income from performance of contracts on scientific research and technological development, products in the trial production period, products made from new technology applied for the first time in Vietnam.

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Thus, from the above regulation, it can be seen that income from performance of contracts on scientific research and technological development is not subject to Corporate Income Tax (CIT).

Is income from performance of contracts on scientific research and technological development subject to CIT in Vietnam? (Image from Internet)

When is the deadline for provisional CIT payment in Vietnam?

Based on Article 55 of the Law on Tax Administration 2019, the specific tax payment deadline is regulated as follows:

Tax Payment Deadline

1. In the case where the taxpayer calculates tax, the deadline for tax payment is the latest by the deadline for submitting tax declaration dossiers. In the event of supplementary tax declaration dossiers, the deadline for tax payment is the deadline for submitting tax declaration dossiers of the period with errors or omissions.

For corporate income tax, the provisional payment is made quarterly, with the tax payment deadline no later than the 30th of the first month of the subsequent quarter.

For crude oil, the tax payment deadline for natural resource tax and corporate income tax per each sale of crude oil is 35 days from the sale date for domestically sold crude oil or from the customs clearance date per the customs law for exported crude oil.

For natural gas, the tax payment deadline for resource tax and corporate income tax is monthly.

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The provisional CIT is paid quarterly, thus the latest deadline for provisional CIT payment is the 30th of the first month of the subsequent quarter.

What expenses are non-deductible incomes when determining CIT in Vietnam?

In accordance with Clause 2, Article 9 of the Law on Corporate Income Tax 2008 as amended and supplemented by Clause 5, Article 1 of the 2013 Amended Law on Corporate Income Tax, specific regulations are as follows:

Expenses non-deductible income when determining taxable income include:

- Expenses that do not meet the conditions specified in Clause 1, Article 9 of the Law on Corporate Income Tax 2008, excluding damage values due to natural disasters, epidemics, and other force majeure cases that are not compensated;

- Fines for administrative violations;

- Expenses compensated by other funding sources;

- Business management expenses allocated by foreign enterprises to a permanent establishment in Vietnam exceeding the amount calculated using the allocation method prescribed by Vietnamese law;

- Expenses exceeding the statutory provisions on reserve fund accumulation;

- Interest expenses on loans for production and business activities from entities that are not credit institutions or economic organizations exceeding 150% of the basic interest rate announced by the State Bank of Vietnam at the time of borrowing;

- Depreciation of fixed assets not conformable with regulations;

- Prepayment into expenses not conformable with legal regulations;

- Salaries, wages of the private business owner; remuneration paid to business founders not directly involved in the management of production and business operations; salaries, wages, other recorded expenses payable to employees but not actually paid or without invoices, documents as prescribed by law;

- Interest expenses corresponding to the missing charter capital;

- Deducted input value-added tax, value-added tax paid according to the deduction method, corporate income tax;

- Advertising, marketing, promotion, brokerage commission, reception, guest entertainment, conference, marketing support, and direct cost support expenses related to production and business operations exceeding 15% of the total deductible expenses. The total deductible expenses do not include expenses specified in this point; for commercial activities, the total deductible expenses do not include the purchase price of the goods sold;

- Sponsorships, except sponsorships for education, health, scientific research, overcoming natural disasters, building solidarity houses, gratitude houses, housing for policy subjects as prescribed by law, sponsorships under State programs for localities with particularly difficult socioeconomic conditions;

- Contributions to voluntary retirement funds or social welfare funds, purchase of voluntary retirement insurance for employees exceeding the prescribed limit according to legal regulations;

- Expenses of business activities from: banks, insurance, lottery, securities, and certain other specific business activities as prescribed by the Minister of Finance.