Shall corporate income tax incurred by foreign airliners be declared quarterly in Vietnam?

Shall corporate income tax incurred by foreign airliners be declared quarterly in Vietnam?

Pursuant to Clause 2, Article 8 of Decree 126/2020/ND-CP, specific provisions are made regarding the types of taxes declared monthly, quarterly, annually, per occurrence of tax obligation, and tax finalization as follows:

Types of taxes declared monthly, quarterly, annually, per occurrence of tax obligation, and tax finalization

....

2. Types of taxes and other contributions to the state budget declared quarterly include:

a) Corporate income tax incurred by foreign airliners and foreign reinsurance.

b) Value-added tax, corporate income tax, personal income tax for credit institutions or third parties authorized by credit institutions to exploit secured assets pending resolution on behalf of taxpayers with secured assets.

c) Personal income tax for organizations, individuals paying income subject to tax withholding according to personal income tax law, where the organization or individual paying the income is subject to quarterly value-added tax declaration and chooses quarterly personal income tax declaration; individuals with income from salaries and wages directly declare tax with the tax authorities and choose quarterly personal income tax declaration.

d) Other types of taxes and contributions to the state budget declared by organizations or individuals on behalf of individuals, where such organizations or individuals are subject to quarterly value-added tax declaration and choose to declare tax on behalf of the individual quarterly, except in the case specified at Point g, Clause 4 of this Article.

đ) Surcharge when crude oil prices fluctuate (excluding oil and gas activities by Vietsovpetro at Block 09.1).

....

Accordingly, based on the above regulation, the quarterly tax declaration form applies to Corporate income tax incurred by foreign airliners.

Shall corporate income tax incurred by foreign airliners be declared quarterly in Vietnam? (Image from the Internet)

What income is exempt from corporate income tax in Vietnam?

According to Article 4 of the Enterprise Income Tax Law 2008, amended and supplemented by Clause 3, Article 1 of the Revised Enterprise Income Tax Law 2013 and by Clause 2, Article 1 of the Law No. 71/2014/QH13 on Amending Tax Laws 2014, specific provisions on income exempt from corporate income tax are as follows:

- Income from cultivation, husbandry, aquaculture, processing agricultural products, aquatic products, and salt production of cooperatives; income of cooperatives operating in agriculture, forestry, fisheries, salt production in areas with difficult socio-economic conditions or in areas with particularly difficult socio-economic conditions; income of enterprises from cultivation, husbandry, aquaculture, processing agricultural products, aquatic products in areas with particularly difficult socio-economic conditions; income from fishing activities.

- Income from the implementation of technical services directly serving agriculture.

- Income from the execution of science and technology research contracts, product testing period, products created from new technology first applied in Vietnam.

- Income from production, business of goods, services of enterprises with 30% or more of the average annual labor being people with disabilities, rehabilitated drug addicts, people with HIV/AIDS, and having an average annual workforce of twenty people or more, excluding enterprises operating in the field of finance and real estate business.

- Income from vocational training activities exclusively for ethnic minorities, disabled people, children with particularly difficult circumstances, and subjects of social evils.

- Income distributed from capital contribution activities, joint ventures, associations with domestic enterprises, after corporate income tax has been paid according to this Law.

- Received sponsorships used for education, scientific research, culture, arts, charity, philanthropy, and other social activities in Vietnam.

- Income from the transfer of Certified Emission Reductions (CERs) of certified emission reduction enterprises.

- Income from tasks assigned by the State of the Vietnam Development Bank in development investment credit and export credit activities; income from credit activities for the poor and other policy beneficiaries of the Social Policy Bank; income from financial and other state funds operating not for profit according to legal regulations; income from organizations wholly owned by the State established to handle non-performing loans of Vietnamese credit institutions.

- Undivided income of facilities implementing socialization in education-training, healthcare, and other socialization fields retained for reinvestment in those facilities according to specialized law in education-training, healthcare, and other socialization fields; undivided income creating assets of cooperatives established and operating according to the Law on Cooperatives.

- Income from technology transfer in priority fields to organizations and individuals in areas with particularly difficult socio-economic conditions.

What types of income are subject to corporate income tax in Vietnam?

According to Article 3 of the Enterprise Income Tax Law 2008, amended by Clause 1, Article 1 of the Law No. 71/2014/QH13 on Amending Tax Laws 2014, provisions on taxable income are as follows:

- Taxable income includes income from production and business activities of goods and services and other income.

- Other income includes income from capital transfer, capital contribution rights transfer; income from real estate transfer, investment project transfer, project participation rights transfer, exploration, exploitation, and processing rights transfer; income from property use rights, ownership rights, including income from intellectual property rights according to legal regulations; income from transfer, lease, liquidation of assets, including valuable papers; income from interest on deposits, loans, foreign exchange sales; revenue from bad debts recovered; revenue from unidentified creditors; income from omitted business operations of previous years and other income.

- Vietnamese enterprises investing abroad transferring income after paying corporate income tax abroad to Vietnam shall follow the Double Taxation Avoidance Agreement if Vietnam has signed one; in countries where no agreement is signed, if the corporate income tax in countries is lower, the difference according to Vietnam’s Enterprise Income Tax Law is collected.