When shall corporate income tax be declared in Vietnam?

When shall corporate income tax be declared in Vietnam?

Based on Clause 6, Article 8 of Decree 126/2020/ND-CP (amended by Clause 3, Article 1 of Decree 91/2022/ND-CP)

Types of taxes declared monthly, quarterly, annually, separately, and annual tax finalization

...

6. Taxes and fees to be annually finalized and finalized up to the time of dissolution, bankruptcy, termination of operations, contract termination, or reorganization of enterprises. If there is a transformation of enterprise type (excluding state-owned enterprises in equitization) wherein the new enterprise inherits all tax obligations of the transformed enterprise, there is no need for tax finalization up to the decision of enterprise transformation, but annual tax finalization is required. To be specific: as follows:

...

b) Corporate Income Tax (excluding Corporate Income Tax from capital transfer by a foreign contractor; Corporate Income Tax declared by the percentage of revenue for each occurrence or monthly as prescribed at Point đ, Clause 4, this Article). Taxpayers must self-determine the provisional quarterly Corporate Income Tax payable (including provisional allocation of Corporate Income Tax to provincial areas where subsidiaries, business locations, and real estate transfer locations differ from the head office) and may deduct the provisional tax paid from the annual tax finalization.

Taxpayers required to prepare quarterly financial statements according to the accounting law shall use these statements and tax regulations to determine the quarterly provisional Corporate Income Tax.

Corporate Income Tax is annually finalized except in the following cases:

- Corporate Income Tax from foreign contractor's capital transfer declared monthly;

- Corporate Income Tax not regularly incurred and enterprises applying the revenue-based tax calculation method should declare per occurrence or monthly (if incurred multiple times in a month).

As specified in Point a, Clause 1, Point a, Clause 2, and Clause 3, Article 44 of the Tax Administration Law 2019:

- Deadline for annual tax finalization: No later than the last day of the third month after the end of the calendar year (i.e., March 31) or fiscal year.

- If a company incurs irregular Corporate Income Tax and applies a revenue-based tax calculation method, the tax declaration deadline is as follows:

+ Declaration for each occurrence: No later than the 10th day from the occurrence of the tax liability;

+ Monthly declaration: No later than the 20th day of the following month after the tax liability occurrence.

When shall corporate income tax be declared in Vietnam?

What form is used for annual corporate income tax finalization in Vietnam?

Currently, companies paying taxes based on the revenue-expense method for annual Corporate Income Tax finalization should use the Corporate Income Tax finalization Form 03/TNDN (defined in Appendix II issued with Circular 80/2021/TT-BTC).

Download the Corporate Income Tax Declaration Form 03/TNDN here.

What revenue is used to determine taxable income for corporate income tax in Vietnam?

According to Article 8 of Decree 218/2013/ND-CP, the revenue for determining taxable income for Corporate Income Tax is as follows:

Revenue for determining taxable income follows the provisions of Article 8 of the Corporate Income Tax Law 2008.

- Revenue for determining taxable income includes all income from sales, processing, service provision, including subsidies, surcharges, and extra fees that the enterprise receives, regardless of whether or not the payment has been made.

For businesses declaring and paying value-added tax by deduction, the revenue for Corporate Income Tax is exclusive of value-added tax. Businesses declaring and paying value-added tax directly on added value should include value-added tax in the revenue for Corporate Income Tax computation.

- The time to determine revenue for taxable income calculation for goods sold is at the time of transfer of ownership or right to use the goods to the buyer.

The time to determine revenue for taxable income calculation for services is at the time the service is completed for the buyer or the time of invoicing for service provision.

- Revenue for determining taxable income in certain cases is specified as follows:

+ For goods sold on an installment basis, it is determined by the one-time payment sale price, excluding installment or deferred interest;

+ For goods or services exchanged or internally consumed (excluding those used for continuous production or business processes of the enterprise) it's determined based on the selling price of similar or equivalent goods or services at the time of exchange or internal consumption;

+ For processing activities, it includes revenue from processing activities, encompassing processing fees, auxiliary material costs, power, and other costs for processing goods;

+ For asset leasing, golf course business, and other service businesses where customers prepay for many years, the revenue for taxable income determination is the periodic payment by the lessee or service purchaser as per the contract. In cases where the lessee or purchaser prepays for several years, revenue is distributed over the prepaid years or determined as once-off payment revenue. If the enterprise is enjoying tax incentives, the incentive determination should be based on the total Corporate Income Tax for prepaid years divided by the prepaid years;

+ For credit activities, financial leasing is loan interest, and financial lease revenue collected during the tax period;

+ For transportation operations, it includes total revenue from passenger, cargo, and luggage transportation accrued during the tax period;

+ For electricity and clean water, it refers to the amounts recorded on the value-added tax invoice;

+ For insurance and re-insurance business activities, it includes amounts receivable for original insurance premiums; agency service fees (including loss assessment, claiming settlement, third-party recovery request, and 100% compensated goods handling); re-insurance acceptance fees; re-insurance commission income, and other insurance business revenues, minus (-) refunded or reduced insurance premiums, re-insurance acceptance fees, and re-insurance commission refunds or reductions.

In co-insurance contracts, the revenue for taxable income calculation is the original insurance premium allocated according to the co-insurance ratio, excluding value-added tax.

In insurance contracts with installments, revenue for taxable income determination is the receivable amount per period;

+ For construction and installation activities, it is the value of the project, project phase, or quantity of construction and installation work certified for acceptance.

Where construction and installation are undertaken without including materials, machinery, and equipment, the taxable income revenue excludes the value of materials, machinery, and equipment;

+ For business activities without forming a legal entity within a business cooperation contract:

(i) If the business cooperation contract results in revenue sharing of sales of goods and services, taxable income revenue is the revenue of each party shared according to the contract;

(ii) If the business cooperation contract results in profit-sharing after tax, the revenue for taxable income determination is the sales amount from goods and services under the contract;

- For casinos, reward-based electronic games, and betting businesses, revenue is the collected amounts from these activities, including special consumption tax, minus (-) the prize amounts paid to customers;

- For securities business, it includes revenues from brokerage services, proprietary securities trading, underwriting, investment advisory, fund management, certificate issuance, market organizing services, and other securities services as prescribed by law;

- For exploration, research, and extraction of oil and gas operations, it is the total revenue from oil and gas sales under fair transaction contracts during the tax period;

- For derivative financial services, it includes revenue from providing these services during the tax period.