Is it entitled to tax incentives when hiring employees who are war invalids and diseased soldiers? If yes, what does the application include?
- Is it entitled to tax incentives when hiring employees who are war invalids and diseased soldiers?
- What is the application of tax incentives in case the enterprise hires employees who are war invalids and diseased soldiers?
- During the time of enjoying corporate income tax incentives, if an enterprise carries out many production and business activities, how should the enterprise account tax?
Is it entitled to tax incentives when hiring employees who are war invalids and diseased soldiers?
Pursuant to Point a, Clause 4, Article 8 of Circular 78/2014/TT-BTC of Vietnam stipulating as follows:
“Article 8. Tax-exempt incomes
[…]4. Income from goods production and trading or service provision activities of enterprises employing disabled, drug-detoxified and HIV- infected laborers, who account for at least 30% of the average number of laborers of these enterprises in a year.
Tax-exempt incomes specified in this Clause exclude other incomes referred to in Article 7 of this Circular.
Enterprises eligible for tax exemption specified in this Clause are those having an average number of laborers in a year of at least 20, excluding those engaged in finance and real estate business.
Enterprises having tax-exempt income specified at this Point must satisfy the following conditions:
a/ For enterprises employing disabled laborers (including war invalids and diseased soldiers), a competent health agency’s certification of the number of disabled laborers is required.
b/ For enterprises employing drug-detoxified laborers, detoxification establishments’ certification of the complete detoxification or a concerned competent agency’s certification is required.
c/ For enterprises employing HIV-infected laborers, a competent health agency’s certification of the number of HIV-infected laborers is required. […]”
Thus, in order to receive tax incentives, enterprises employ disabled laborers (including war invalids and diseased soldiers), a competent health agency’s certification of the number of disabled laborers is required.
Tax incentives (Image from the Internet)
What is the application of tax incentives in case the enterprise hires employees who are war invalids and diseased soldiers?
Pursuant to Article 80 of the 2019 Law on Tax Administration of Vietnam, the tax exemption and reduction application is stipulated as follows:
“Article 80. Application for tax remission
1. In case the exempted or reduced tax eligible for remission is calculated by the taxpayer, the application for tax remission consists of:
a) The tax return;
b) Documents supporting the calculation of the exempted or reduced tax.
2. In case the tax remission is decided by the tax authority, the application for tax remission consists of:
a) A written request for tax exemption or tax reduction which specifies the tax, the reason for exemption or reduction, and the amount of tax exempted or reduced;
b) Documents supporting the calculation of the exempted or reduced tax.
3. The tax authority shall compile the list of households and individuals eligible for tax exemption in the cases specified in Point a Clause 2 Article 79 of this Law according to the tax books. The taxpayer shall calculate the amount of tax exempted in the cases specified in pt b Clause 2 Article 79 of this Law according to the annual personal income tax statement.
4. The Ministry of Finance shall specify the composition of the application for tax remission mentioned in this Article, the cases in which the tax exempted or reduced is determined by taxpayers and by tax authorities.”
This content is guided by Articles 51 to 63 of Circular 80/2021/TT-BTC.
Thus, in your company’s case, in addition to the documents according to Article 80 of the 2019 Law on Tax Administration of Vietnam, a certification from a competent health agency about the number of employees who are disabled is required.
During the time of enjoying corporate income tax incentives, if an enterprise carries out many production and business activities, how should the enterprise account tax?
Pursuant to Clause 2 Article 18 of Circular 78/2014/TT-BTC of Vietnam stipulating as follows:
“Article 18. Conditions for application of CIT incentives
1. CIT incentives are applicable only to enterprises which observe accounting, invoice and document regulations and register and pay CIT as declared.
2. While enjoying CIT incentives, enterprises that carry out different production and business activities shall separately account income from production and business activities eligible for CIT incentives (including preferential tax rates or tax exemption or reduction) from income from those ineligible for CIT incentives for separate tax declaration and payment.
During a tax period, if an enterprise fails to separately account incomes from production and business activities eligible and ineligible for tax incentives, the income from production and business activities eligible for tax incentives equals (=) the total taxed income multiplied by (x) the ratio (%) of the turnover from or deductible expenses for production and business activities eligible for tax incentives to the total turnover or total deductible expenses of the enterprise in the tax period.
If an enterprise has an income or a deductible expense which cannot be separately accounted, such income or expense shall be determined according to the ratio of the turnover from or deductible expenses for production and business activities eligible for tax incentives to the total turnover or total deductible expenses of the enterprise. […]”
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