Vietnam: What does the annual corporate income tax finalization include?

Vietnam: What does the annual corporate income tax finalization include?

Pursuant to point b, clause 3, Article 43 of the Law on Tax Administration 2019, Circular 200/2014/TT-BTC, Circular 80/2021/TT-BTC, Decree 132/2020/ND-CP, the dossier for annual corporate income tax finalization includes:

(1) Annual corporate income tax declaration according to Form No. 03/CIT issued together with Circular 80/2021/TT-BTC.

(2) Annual financial statements, including:

- Balance sheet (Form No. B01-DN issued together with Circular 200/2014/TT-BTC);

- Profit and loss statement (Form No. B02-DNN issued together with Circular 200/2014/TT-BTC);

- Cash flow statement by the direct method and cash flow statement by the indirect method (issued together with Circular 200/2014/TT-BTC);

- Notes to the financial statements (Form No. B09-DN issued together with Circular 200/2014/TT-BTC);

(3) Authorization letter if not performed by the legal representative.

In addition, based on the actual business situation, the enterprise must submit additional documents as follows:

(4) Annex on Business results issued together with Circular 80/2021/TT-BTC

- Form No. 03-1A/CIT for enterprises in production, commerce, or service sectors.

- Form No. 03-1B/CIT for enterprises in the banking and credit sectors.

- Form No. 03-1C/CIT for securities companies or fund management companies.

(5) Annex on Loss carryforward (Form No. 03-2/CIT issued together with Circular 80/2021/TT-BTC).

(6) Annexes on Corporate income tax incentives (issued together with Circular 80/2021/TT-BTC):

- Form No. 03-3A/CIT for newly established business establishments from investment projects, relocated business establishments, or new investment projects.

- Form No. 03-3B/CIT for business establishments investing in new production lines, expanding scale, replacing technology, improving ecological environment, or enhancing production capacity (expansion investment).

- Form No. 03-3C/CIT for enterprises employing ethnic minority workers or engaging in production, construction, and transportation using a large number of female workers.

- Form No. 03-3D/CIT for science and technology enterprises or those transferring technology in priority transfer fields.

The accompanying documents for declaring and paying tax for Vietnamese enterprises investing abroad regarding income from overseas investment projects include:

- A copy of the foreign income tax declaration confirmed by the taxpayer;

- A copy of the foreign tax payment receipt confirmed by the taxpayer or the original confirmation from the foreign tax authority for the paid tax or a copy of an equivalent value document confirmed by the taxpayer.

Vietnam: What does the annual corporate income tax finalization include? (Image from Internet)

How to determine the corporate income tax payment in Vietnam?

According to Article 12 of Circular 78/2014/TT-BTC, the principles for determining the place where enterprises pay CIT are as follows:

+ Enterprises pay tax at the location of their headquarters.

+ If enterprises have production facilities (including processing and assembly bases) that are dependent and operate in provinces or cities under central authority different from the headquarters, the tax is calculated at both the headquarters and the location of the production facilities.

+ The allocation of payable tax as mentioned above does not apply to enterprises with projects, construction items, or dependent accounting construction bases.

What is the corporate income tax rate in Vietnam?

Based on Article 10 of the Law on Corporate Income Tax 2008, amended and supplemented by clause 6, Article 1 of the Law on Corporate Income Tax Amendment 2013, the regulation states:

Tax Rate

1. The corporate income tax rate is 22%, except as specified in clauses 2 and 3 of this Article, and for entities eligible for tax rate preferences according to Article 13 of this Law.

Cases previously subjected to a 22% tax rate will switch to a 20% tax rate from January 01, 2016.

2. Enterprises with total annual revenue not exceeding twenty billion VND apply a 20% tax rate.

The revenue basis for determining eligibility for the 20% tax rate is the revenue of the preceding year.

3. The corporate income tax rate for exploration and exploitation activities of oil, gas, and other precious resources in Vietnam ranges from 32% to 50% depending on each project and business facility.

The Government of Vietnam stipulates detailed regulations and provides guidance on the implementation of this Article.

Thus, the CIT rate in 2024 applied to enterprises is: 20%.

However, for enterprises engaged in exploration, investigation, and extraction of oil, gas, and other precious resources in Vietnam, the applicable tax rate ranges from 32% to 50% in accordance with each project and business establishment.

Pursuant to Article 10 of Decree 218/2013/ND-CP which provides further details on the tax rate for exploration, investigation, and extraction of oil and precious resources in Vietnam, specifically:

+ For exploration, investigation, and extraction of oil and gas, based on the location, exploitation conditions, and reservoir size, the Prime Minister of Vietnam decides the specific tax rate suitable for each project and business establishment upon the recommendation of the Minister of Finance.

+ For platinum, gold, silver, tin, tungsten, antimony, gemstones, and rare earth mining sites, a 50% tax rate applies. If 70% or more of the designated area is located in economically and socially difficult areas, the applied corporate income tax rate is 40%, as determined in the preferential tax area list attached to this Decree.