Is a Joint Stock Finance Company Required to Pay Corporate Income Tax? What Expenses are Deductible from Corporate Income Tax?
What is a joint-stock financial company?
A joint-stock financial company is a non-bank credit organization established in the form of a joint-stock company. A joint-stock financial company must have a minimum of 100 shareholders and is not limited in the maximum number according to regulations...
According to the provisions of Article 3 of the Corporate Income Tax Law 2008 (amended by Clause 2, Article 1 of the Amended Corporate Income Tax Law 2013 and Clause 1, Article 1 of the 2014 Law Amending Tax Laws), taxable income is stipulated as follows:
- Taxable income includes income from production and business activities of goods and services and other incomes as specified in Clause 2 of this Article.
- Other incomes include income from capital transfer, transfer of the right to contribute capital; income from real estate transfer, project transfer, transfer of the right to participate in project investment, transfer of the right to explore, exploit, process minerals; income from the right to use assets, ownership rights, including income from intellectual property rights as prescribed by law; income from the transfer, leasing, liquidation of assets, including various types of valuable papers; interest income from deposits, loans, selling foreign currency; recovered bad debt amounts; income from liabilities without identifiable creditors; income from business activities of previous years which were omitted and other incomes, including income from production and business activities outside Vietnam.
Thus, corporate income tax can be understood as a direct tax based on income from production and business activities of enterprises
Do joint-stock financial companies have to pay corporate income tax? What are the deductible expenses for corporate income tax?
Do joint-stock financial companies have to pay corporate income tax?
Based on regulations stipulated in Article 2 of Circular 78/2014/TT-BTC on corporate income taxpayers as follows:
Corporate Income Taxpayers
1. Corporate income taxpayers are organizations engaged in the production and business of goods and services with taxable income (hereinafter referred to as enterprises), including:
a) Enterprises established and operating under the provisions of the Enterprise Law, Investment Law, Credit Institution Law, Insurance Business Law, Securities Law, Petroleum Law, Commercial Law, and other legal normative documents in the following forms: Joint-stock companies; Limited liability companies; Partnerships; Private enterprises; Law offices, private notary offices; Parties in business cooperation contracts; Parties in oil and gas product sharing contracts, oil and gas joint ventures, general-operated companies.
Joint-stock financial companies, as credit organizations established under the provisions of the Law on Credit Institutions, are subject to corporate income tax according to regulations.
What are deductible expenses for corporate income tax?
According to the provisions of Clause 1, Article 9 of Decree 218/2013/ND-CP (amended by Clause 4, Article 1 of Decree 91/2014/ND-CP) on deductible expenses when determining taxable corporate income as follows:
Enterprises are allowed to deduct all expenses if they meet the following conditions:
- Expenses actually incurred related to the production and business activities of the enterprise, including the following expenses:
+ Expenses for performing national defense and security education, training, activities of the self-defense militia, and serving national defense and security tasks; expenses to support the activities of party organizations and socio-political organizations within the enterprise.
+ Actual expenses for HIV/AIDS prevention activities at the workplace of the enterprise, including: Training costs for enterprise HIV/AIDS prevention officers, costs for organizing HIV/AIDS prevention communication for the enterprise's employees, HIV consultation, examination and testing fees, and support costs for employees infected with HIV.
+ Welfare expenses directly for employees with invoices and documents such as: Funeral and wedding expenses for the employees and their families; vacation expenses, medical treatment support; support for educational knowledge at training institutions; support for families of employees affected by natural disasters, enemy sabotage, accidents, illness; reward expenses for employees' children with good academic achievements; support for transportation costs on holidays and New Year, and the total does not exceed one month's average actual salary implemented in the taxable year.
- Expenses must have sufficient invoices and documents as required by law:
For cases such as: Purchasing agricultural, forestry, and fishery products directly sold by producers, craftsmen selling handmade products made from materials such as jute, rush, bamboo, rattan, leaves, coconut shells or by-products from agricultural products; purchasing land, stone, sand, gravel directly extracted and sold by households, individuals; purchasing scrap collected by individuals; purchasing assets, items from households and individuals not engaged in business activities must have payment documents and a table of purchased goods and services certified by the legal representative or authorized person of the enterprise.
- For each invoice of goods and services with a value of twenty million VND or more, non-cash payment documents are required.
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