What are the places where enterprises pay corporate income tax in Vietnam?

What are the places where enterprises pay corporate income tax in Vietnam?

According to Clause 1, Article 56 of the Law on Tax Administration 2019, enterprises pay corporate income tax to the state budget at the following locations:

- At the State Treasury;

- At the tax administration authority where the tax declaration dossier is received;

- Through an organization authorized by the tax administration authority to collect tax;

- Through commercial banks, other credit organizations, and service organizations as prescribed by law.

According to Article 12 of Decree 218/2013/ND-CP, the places where enterprises pay corporate income tax are defined as follows:

- Enterprises pay tax in the locality where their headquarters are located. In cases where enterprises have dependent cost-accounting production facilities located in other provinces or centrally affiliated cities different from the locality where their headquarters are located, the tax amount is calculated for both the headquarters and the location of the production facilities.

The corporate income tax amount paid in provinces or centrally-affiliated cities where dependent cost-accounting production facilities are located is determined by multiplying the corporate income tax amount payable in the period by the ratio of expenses incurred at the production facility to the total expenses of the enterprise.

This tax payment regulation does not apply to projects, project categories, or dependent cost-accounting construction facilities.

The allocation, management, and use of revenue from corporate income tax shall follow the regulations of the State Budget Law 2015.

- Units accounting for enterprises' sector-wide income, with revenues from activities outside of their main business operations, pay tax in the province or centrally-affiliated city where these business activities occur.

What are the places where enterprises pay corporate income tax in Vietnam?? (Image from the Internet)

Which entities are CIT payers in Vietnam?

According to Article 2 of Circular 78/2014/TT-BTC, CIT payers are organizations engaged in the production and trading of goods or provision of services with taxable income (below referred to as enterprises), including:

- Enterprises established and operating under the Enterprise Law, Investment Law, Law on Credit Institutions, Insurance Business Law, Securities Law, Petroleum Law, Commercial Law or other legal documents in the forms of joint-stock company; limited liability company; partnership; private enterprise; lawyer office, private notary public office; party to business cooperation contract; party to petroleum product-sharing contract, oil and gas joint-venture enterprise and joint operating company;

+ Public or non-public service providers engaged in the production and trading of goods or provision of services with taxable income in all areas;

+ Organizations established and operating under the Cooperative Law;

+ Enterprises established under foreign law (below referred to as foreign enterprises) and having permanent establishments in Vietnam;

Permanent establishments of foreign enterprises are manufacturing and trading establishments through which foreign enterprises carry out some or all of their production and trading activities in Vietnam, including:

++ Branches, executive offices, factories, workshops, means of transport, mines, oil and gas fields or other sites of exploitation of natural resources in Vietnam;

++ Construction sites and construction, installation or assembly works;

++ Establishments providing services, including also consultancy services through employees or other organizations or individuals;

++ Agents for foreign enterprises;

++ Representatives in Vietnam, for representatives authorized to sign contracts in the name of foreign enterprises or representatives not authorized to sign contracts in the name of foreign enterprises but regularly delivering goods or providing services in Vietnam;

In case a double taxation avoidance agreement which the Socialist Republic of Vietnam has signed has different provisions on permanent establishments, the provisions of that agreement prevail.

+ Organizations other than those referred to at Points a, b, c and d, Clause 1 of this Article which are engaged in production and trading of goods or provision of services and have taxable income.

- Foreign organizations engaged in production and business activities in Vietnam not under the Investment Law or the Enterprise Law or earning income in Vietnam shall pay CIT under separate guidance of the Ministry of Finance. These organizations, if having capital transfer activities, shall pay CIT under the guidance in Article 14, Chapter IV of Circular 78/2014/TT-BTC.

What incomes are exempt from CIT in Vietnam?

According to Article 4 of the Law on CIT 2008 amended and supplemented by Clause 3 Article 1 of the Law on Amending the Law on CIT 2013 (which was amended by Clause 1, Article 119 of the Law on Medical Examination and Treatment 2023 and Clause 2, Article 1 of the Law Amending Certain Tax Laws 2014),

the tax-exempt incomes include:

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

- Income from providing direct technical services for agriculture.

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

- Income from producing and trading goods and services of enterprises with at least 30% of the average annual labor being disabled, rehabilitated persons, people infected with the HIV/AIDS virus, with an annual average workforce of twenty or more people, excluding enterprises operating in the financial sector and real estate business.

- Income from vocational training activities dedicated to ethnic minorities, disabled people, children in special difficult circumstances, and people involved in social evils.

- Income distributed from capital contribution, joint ventures, and associations with domestic enterprises after having paid CIT according to the Law on CIT 2008.

- Financial aid received for use in educational, scientific research, cultural, artistic, charitable, humanitarian, and other social activities in Vietnam.

- Income from transferring emission reduction certificates (CERs) of enterprises granted emission reduction certificates.

- Income from performing state-assigned tasks of the Vietnam Development Bank in development investment credit, export credit activities; income from credit activities for the poor and other policy subjects of the Vietnam Bank for Social Policies; income of state financial funds and other state funds operating on a non-profit basis as prescribed by law; income of organizations with 100% state-owned charter capital established by the Government of Vietnam to handle bad debts from Vietnamese credit institutions.

- Undistracted income of establishments engaged in socialization in education - training, healthcare, and other socialized fields used for reinvestment to develop such establishments according to specialized laws on education - training, healthcare, and other socialized fields; the undistracted income forming non-divisible assets of cooperatives established and operating according to the Cooperative Law 2023.

- Income from technology transfer on the list of prioritized sectors for transfer to organizations and individuals in areas with particularly difficult socio-economic conditions.