Vietnam proposes CIT deferral for Q1 and Q2 of 2025 by 5 months

Vietnam proposes CIT deferral for Q1 and Q2 of 2025 by 5 months

The Ministry of Finance is collecting feedback on the draft Decree regarding extending the deadlines for the submission of value-added tax (VAT), corporate income tax (CIT), personal income tax (PIT), and land rent in 2025.

Download the draft Decree on submission of VAT, CIT, PIT, and land rent for 2025 here.

Based on Clause 2, Article 4 of the draft Decree on the submission of VAT, CIT, PIT, and land rent for 2025, the proposal for extending the submission deadline for CIT is as follows:

(1) Extension of the submission deadline for initial CIT for Q1 and Q2 of the 2025 tax period for businesses and organizations subject to Article 3 of the draft Decree.

The extension period is 5 months, calculated from the expiration of the CIT submission deadline according to the tax management laws.

(2) In cases where enterprises and organizations mentioned in Article 3 of the draft Decree have branches or affiliated units that independently declare CIT with the directly managing tax authorities of the branches or affiliated units, such branches or affiliated units will also be granted an extension for CIT submission.

If the branches or affiliated units of enterprises or organizations specified in Clauses 1, 2, and 3 of Article 3 of the draft Decree do not engage in production or business activities within industries eligible for an extension, they will not qualify for the CIT submission extension.

Therefore, according to the draft Decree, the submission deadline for initial CIT for Q1 and Q2 of the 2025 tax period is proposed to be extended by 5 months, calculated from the conclusion of the CIT submission deadline in accordance with tax management laws.

Vietnam proposes CIT deferral for Q1 and Q2 of 2025 by 5 months (Image from the Internet)

Vietnam: When is the submission deadline for initial CIT for Q1 of 2025?

According to Clause 1, Article 55 of the Law on Tax Administration 2019, the tax submission deadlines are specified as follows:

Tax Submission Deadline

1. For cases where the taxpayer calculates the tax, the submission deadline is the final day of the tax filing deadline. In instances of submitting amended tax filings, the tax submission deadline is the filing deadline of the tax period in which errors were made.

For corporate income tax, which is provisionally submitted quarterly, the deadline is the 30th day of the first month of the following quarter.

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Thus, the latest submission deadline for initial CIT for Q1/2025 is April 30, 2025.

However, April 30, 2024, and May 1, 2025, are public holidays as per Announcement 6150/TB-BLĐTBXH 2024 (holiday schedule for April 30 and May 1, 2025, for officials and public employees from April 30, 2025, to May 4, 2025, from Wednesday to Sunday, totaling 5 continuous days).

Moreover, Article 86 of Circular 80/2021/TT-BTC stipulates that if the tax filing or submission deadline falls on a holiday, the deadline will be considered the next working day following the holiday, according to the Civil Code 2015.

Therefore, the submission deadline for initial CIT for Q1/2025 will be postponed to the first working day after the holiday, i.e., May 5, 2025.

What types of income are subject to CIT in Vietnam?

According to Article 3 of the Corporate Income Tax Law 2008, amended by Clause 1, Article 1 of Law No. 71/2014/QH13 on Amending Tax Laws 2014, the types of income subject to CIT are defined as follows:

- Taxable income includes income from manufacturing, trade and services, and other income.

- Other income includes: income from the transfer of capital, transfer of the right to contribute capital; income from real estate transfers, project transfers, the right to participate in project transfers, exploration rights, extraction, and processing of minerals; income from asset use rights, ownership rights, including intellectual property rights as per legal provisions; income from the transfer, leasing, liquidation of assets, including valuable papers; income from interest on deposits, loan interest, sale of foreign exchange; recoveries from previously written-off bad debts; revenues from undisclosed liabilities; income from prior year business activities omitted and other incomes.

For Vietnamese enterprises investing abroad after paying corporate income tax abroad, in countries where Vietnam has signed agreements to avoid double taxation, the provisions of such agreements apply; in countries where Vietnam has not signed such agreements, if the CIT rate abroad is lower, the difference from the CIT calculated according to Vietnam's Corporate Income Tax Law is collected.