Vietnam: How to declare corporate income tax (CIT) for enterprises where the unit is entitled to incentives other than the province?
What is the guidance on the location of submitting tax declaration dossiers in Vietnam?
According to Official Letter 33224/CTHN-TTHT in 2022, Hanoi Tax Department guides:
"Hanoi Tax Department received Official Letter No. 02/2022/BGSV-HN dated June 8, 2022 Branch of Bosch Global Software Technologies Co., Ltd in Hanoi (hereinafter referred to as Branch) asking about tax finalization CIT for dependent units other than provinces enjoying tax incentives, Hanoi Tax Department has the following comments:
- Pursuant to Article 11 of Decree 126/2020/ND-CP dated October 19, 2020 stipulating the location of submitting tax declaration dossiers:
“Tax declaration dossiers shall be submitted at the locations specified in Clauses 1, 2 and 3 Article 45 of the Law on Tax administration and the following locations:
…
h) Corporate income tax shall be declared where the dependent unit or business location generates income eligible for corporate income tax incentives.
…”
How to declare and pay corporate income tax for dependent units in Vietnam?
According to Official Letter 33224/CTHN-TTHT in 2022, Hanoi Tax Department guides:
"Based on Circular 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance guiding the implementation of a number of articles of the Law on Tax Administration and Decree 126/2020/ND-CP dated October 19 2020 of the Government detailing a number of articles of the Law on Tax Administration:
+ In Clause 8, Article 3 provides for the interpretation of words:
"8. “dependent units” include branches and representative offices.”
+ In Article 17, regulations on tax declaration, tax calculation, tax finalization, distribution and payment of corporate income tax:
“Article 17. Declaring, calculating, finalizing, distributing and paying corporate income tax (CIT)
1. Distribution cases:
...c) Dependent units and business locations that are factories;
2. Distribution methods:
...c) Distribution of CIT payable by taxpayers having dependent units, business locations that are factories:
CIT payable in each province where a factory is located equals (=) CIT on business operation multiplied by (x) the ratio (%) of cost of each factory to total cost of the taxpayer (excluding costs of operations eligible for CIT incentives. The costs as the basis for distribution shall be actual costs incurred in the tax period.
CIT on business operation does not include CIT on operations eligible for CIT incentives. CIT on operations eligible for CIT incentives shall be determined according to the performance of these operations and the level of incentives for which they are eligible.
...3. Declaring, finalizing, paying tax:
...c) For dependent units and business locations that are factories:
c.1) Declaring, paying provisional tax quarterly:
The taxpayer is not required to submit tax declaration dossiers quarterly but have to pay provisional tax quarterly in the provinces where the factories are located, including those with units eligible for CIT incentives, in accordance with Point b Clause 6 Article 8 of Decree No. 126/2020/ND-CP.
c.2) Tax finalization:
The taxpayer shall finalize CIT on the entire business operation of the taxpayer according to Form No. 03/TNDN, submit the CIT distribution sheet according to Form No. 03-8/TNDN in Appendix II hereof to the supervisory tax authority; pay CIT in the provinces where the factories are located in accordance with Clause 4 Article 12 of this Circular.
For activities that are eligible for CIT incentives, the taxpayer shall submit tax finalization form No. 03/TNDN in Appendix II hereof to the supervisory tax authority, determine CIT on the activities that are eligible for CIT incentives according to Form No. 03-3A/TNDN, 03-3B/TNDN, 03-3C/TNDN, 03-3D/TNDN in Appendix II hereof and submit them to the supervisory tax authority and tax authorities of the areas where the units eligible for incentives are located.
In case the paid provisional CIT is smaller than the finalized CIT payable in each province, the taxpayer shall pay the CIT arrears in the provinces. In case the paid provisional CIT is greater than the CIT payable in each province, the overpaid CIT shall be handled in accordance with Article 60 of the Law on Tax Administration and Article 25 of this Circular.
Vietnam: How to declare CIT for enterprises where the unit is entitled to incentives other than the province? (Image from the internet)
How to declare corporate income tax in Vietnam for enterprises where the unit is entitled to incentives other than the province?
According to Official Letter 33224/CTHN-TTHT in 2022, Department of Finance Guide to Hanoi city:
Pursuant to the above provisions:
- In case the company has a dependent accounting branch in another province with activities entitled to CIT incentives, the company shall declare tax finalization according to form No. 03/TNDN issued together with Appendix II of Circular 80/2021/TT - The BTC at the tax agency directly manages, determines the payable CIT amount of the activities entitled to CIT incentives according to form No. 03-3A/TNDN, 03-3B/TNDN, 03-3C/TNDN, 03- 3D/TNDN promulgated together with Appendix II of Circular 80/2021/TT-BTC and submitted to the tax authority where the unit is entitled to incentives other than the province and the tax authority directly managing it.
- In the process of implementing tax policy, if there are still problems, the unit can refer to the guiding documents of the Hanoi Tax Department posted on the website http://hanoi.gdt.gov.vn or contact Inspector - Check #1 for assistance with resolution.
Thus, enterprises with dependent units other than provinces operating and enjoying corporate income tax incentives shall make tax finalization declarations according to the above instructions.
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