What are guidelines on CIT tax declaration for a branch with dependent accounting in a different province in Vietnam in 2025?
What are guidelines on CIT tax declaration for a branch with dependent accounting in a different province in Vietnam in 2025?
According to Official Dispatch 59245/CTHN-TTHT in 2023 which guides tax declaration for branches with dependent accounting in a different province as follows:
- Based on point d, clause 2, Article 11 of Decree 126/2020/ND-CP:
Location for filing tax returns
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- The location for filing tax returns for taxpayers with activities and business in multiple provincial areas other than where their headquarters is located, as per point b, clause 4, Article 45 of the Law on Tax Administration, shall be at the tax authority managing their headquarters. Furthermore, the taxpayer must submit a tax allocation table (if any) for each province entitled to state budget revenue (including dependent units and business locations) to the tax authority managing the headquarters, except in some cases where the tax allocation table is not required.
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d) Corporate income tax (CIT) of dependent units or business locations with income enjoying CIT incentives. The taxpayer must separately determine the CIT to be paid for activities enjoying incentives with the tax authority managing the location of the dependent unit or business location and must not allocate it to other dependent units or business locations of the taxpayer.
- As stated in clauses 1, 2, and 4, Article 12 of Circular 80/2021/TT BTC which stipulates the allocation of tax obligations for taxpayers with centralized accounting having dependent units or business locations in a different province from their headquarters:
Allocation of tax obligations for taxpayers with centralized accounting having dependent units or business locations in a different province
- Taxpayers with activities and business in multiple provincial areas other than where their headquarters is, perform centralized accounting at the headquarters per clauses 2 and 4, Article 11 of Decree No. 126/2020/ND-CP, and conduct tax declaration, calculation, and file tax returns to the directly managing tax authority, and allocate the amount of tax payable to each province where the business activities take place.
- Cases for allocation, allocation methods, tax declaration, tax calculation, and tax settlement for allocated taxes are implemented as stipulated in Articles 13, 14, 15, 16, 17, 18, and 19 of this Circular.
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- Taxpayers base on the tax payable to each province benefitting from the revenue allocation to prepare payment documents and deposit the money into the state budget. The State Treasury receiving the state budget payment documents of the taxpayer posts the revenue to each locality receiving the allocated revenue.
Based on the above regulations, in the case where a company branch is a production facility, the branch is subject to CIT allocation as guided at point c, clause 2, Article 17 of Circular 80/2021/TT BTC:
The CIT payable in each province with a production facility is calculated as the CIT payable from production and business activities multiplied by the percentage (%) cost of each production facility over the total cost of the taxpayer (excluding costs from activities enjoying CIT incentives).
Note: Costs used to determine the allocation ratio are the actual costs incurred during the tax period.
- The CIT payable from production and business activities does not include the CIT payable for activities enjoying CIT incentives.
- The CIT payable from activities enjoying incentives is determined based on the business results of the activities receiving the incentives and the level of incentives enjoyed.
What are guidelines on CIT tax declaration for a branch with dependent accounting in a different province in Vietnam in 2025? (Image from the Internet)
How is CIT declaration and finalization done for a branch with dependent accounting in a different province in Vietnam?
According to Official Dispatch 59245/CTHN-TTHT in 2023 guiding tax declaration for a branch with dependent accounting in a different province as follows:
Taxpayers declare CIT finalization for all production and business activities according to Form 03/TNDN, submit an appendix on the allocation of CIT payable to localities entitled to revenue for the production facility according to Form 03-8/TNDN regulated at Appendix II issued with Circular 80/2021/TT-BTC to the directly managing tax authority.
In addition, they must pay the allocated tax amount for each province where there is a production facility as regulated in clause 4, Article 12 of Circular 80/2021/TT BTC, specifically:
4. Taxpayers base on the tax payable to each province benefitting from the revenue allocation to prepare payment documents and deposit money into the state budget. The State Treasury receiving the state budget payment documents of the taxpayer posts the revenue to each locality receiving the allocated revenue.
For activities receiving CIT incentives, taxpayers declare and perform CIT finalization according to Form 03/TNDN as regulated at Appendix II issued with Circular 80/2021/TT-BTC at the directly managing tax authority. They determine the CIT payable for the activities enjoying CIT incentives according to Forms 03-3A/TNDN, 03-3B/TNDN, 03-3C/TNDN, 03-3D/TNDN regulated at Appendix II issued with Circular 80/2021/TT-BTC and pay at the tax authority where the unit enjoying the incentive is located in a different province and the directly managing tax authority.
In the case where the tax already paid quarterly is less than the tax payable allocated for each province according to the tax finalization, the taxpayer must pay the remaining tax amount for each province.
If the quarterly tax already paid is more than the tax allocated for each province, it is considered overpaid tax and is handled as regulated in Article 60 of Law on Tax Administration 2019 and Article 25 of Circular 80/2021/TT BTC.
How to handle overpaid CIT in Vietnam?
The handling of overpaid CIT is regulated in Article 60 of Law on Tax Administration 2019 as follows:
- Taxpayers who have paid more tax than the tax amount, late payment interest, and fines are entitled to offset the overpaid tax against any outstanding tax or against the payable tax amount in the next tax payment or receive a refund for overpaid tax when the taxpayer is no longer in tax debt.
In the event that the taxpayer requests to offset the overpaid tax against any outstanding tax, no late payment interest shall be calculated corresponding to the offset amount from the date of the overpayment to the date the tax authority completes the offset.
- If the taxpayer requests a refund of the overpaid tax, the tax authority must issue a decision to refund the overpaid tax or have a written response clearly stating the reason for not refunding within 5 working days from the date of receipt of the refund request.
- Overpaid tax is not refunded, and the tax authority performs liquidation of the overpaid tax amount in the accounting records and electronic data system in the following cases:
+ The tax authority has notified the taxpayer of the eligible overpaid tax refund, but the taxpayer refuses to accept the overpaid amount in writing;
+ The taxpayer is not operating at the address registered with the tax authority and has been notified by the tax authority about the overpaid amount via public media. If after one year from the notification date the taxpayer does not respond with a request in writing for a tax refund, late payment interest, or penalty refund, the overpaid amount is not refunded;
+ The overpayment exceeds a period of 10 years from the date of payment into the state budget, without the taxpayer offsetting tax obligations or requesting a tax refund.
- In cases where the taxpayer is not operating at the registered business address, with overpaid tax and outstanding tax, the tax authority shall offset the overpaid tax against the outstanding tax.
