What is the time for determining turnover for calculating taxable income for CIT in Vietnam?

What is the time for determining turnover for calculating taxable income for CIT in Vietnam?

Based on Clause 2, Article 5 of Circular 78/2014/TT-BTC, the timing for determining turnover to calculate CIT taxable income is regulated as follows:

Turnover

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2. The timing for determining turnover to calculate taxable income is as follows:

a) For the sale of goods, it is the time of transfer of ownership or use rights of goods to the buyer.

b) For service provision activities, it is the time when the service provision is completed or the completion of each part of the service provision to the buyer, except for cases specified in Clause 3, Article 5 of Circular 78/2014/TT-BTC, and Clause 1, Article 6 of Circular 119/2014/TT-BTC.

c) For air transport activities, it is the time when the transportation service provision is completed for the buyer.

d) Other cases as regulated by law.

Thus, the timing for determining turnover to calculate CIT taxable income is as follows:

- For the sale of goods: It is the time of transfer of ownership or use rights of goods to the buyer.

- For service provision activities: It is the time when the service provision is completed or the completion of each part of the service provision to the buyer.

Except for some cases of determining turnover according to Clause 3, Article 5 of Circular 78/2014/TT-BTC, and goods and services used for exchange at Clause 1, Article 6 of Circular 119/2014/TT-BTC.

- For air transport activities: It is the time when the transportation service provision is completed for the buyer.

- Other cases as regulated by law.

What is the time for determining turnover for calculating taxable income for CIT in Vietnam? (Image from the Internet)

When is the time for determining turnover to calculate CIT taxable income for goods and services used for exchange in Vietnam?

Based on the regulations at Point b, Clause 3, Article 5 of Circular 78/2014/TT-BTC (as amended by Clause 1, Article 6, Circular 119/2014/TT-BTC):

turnover

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3. turnover to calculate taxable income in certain cases is determined as follows:

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b) For goods and services used for exchange (excluding goods and services used to continue the production and business process of the enterprise), it is determined based on the selling price of the same or equivalent product, goods, or services on the market at the time of exchange.

Example: Enterprise A, which manufactures automobile parts and assembles automobiles, uses the tires produced by its enterprise for exhibition or uses these tires to continue the assembly into a complete automobile; in this case, the automobile tires do not have to be converted to be calculated into turnover for calculating corporate income tax.

Example: Enterprise B, a computer manufacturing company, provides some computers manufactured by the company to employees for work within the company; these computers do not have to be converted into turnover for calculating corporate income tax.

The turnover to calculate CIT taxable income for goods and services used for exchange (excluding those used to continue the production and business process of the enterprise) is determined based on the sale price of similar or equivalent products, goods, or services on the market at the time of exchange.

Where to pay corporate income tax in Vietnam?

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

- At the State Treasury;

- At the tax administration authority where the tax file is submitted;

- Through organizations authorized by the tax administration authority to collect taxes;

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

As stipulated in Article 12 of Decree 218/2013/ND-CP, the place to pay corporate income tax is regulated as follows:

- Enterprises pay tax at the locality where their headquarters are located. If an enterprise has a dependent accounting production facility in a province or city that is different from where its headquarters are located, the tax is calculated and paid both at the headquarters and at the location of the production facility.

The corporate income tax payable at the province or centrally-run city where the dependent accounting production facility is located is determined by multiplying the enterprise's due tax amount 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 parts, or construction facilities accounting dependently.

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

- Subsidiary units of businesses accounting for the entire sector, having income outside primary business activities, pay tax at the province or centrally-run city where such business activities take place.