Hanoi General Department of Taxation: How much corporate income tax reduction in Vietnam for a company with a turnover of no more than 200 billion VND in the tax period 2021?
The company has a revenue of no more than VND 200 billion in the tax period 2021, how much corporate income tax reduction in Vietnam compared to 2019?
According to Official Dispatch 25017/CTHN-TTHT in 2022 of the General Department of Taxation of Hanoi, this issue is explained as follows:
Regulations in Article 1 of Decree 92/2021/ND-CP on corporate income tax reduction in Vietnam:
"Article 1. Corporate income tax reduction
1. Subjects of application
The corporate income tax reduction specified in this Article applies to corporate income taxpayers who are organizations engaged in production and business activities of goods and services with taxable income (hereinafter collectively referred to as enterprises). ) as prescribed in Article 1 of Resolution No. 406/NQ-UBTVQH15, including:
a) The enterprise is established in accordance with the law of Vietnam.
b) Organizations established under the Law on Cooperatives.
c) Non-business units established in accordance with Vietnamese law.
d) Other organizations established in accordance with the law of Vietnam having production and business activities with income.
2. A 30% reduction in the payable enterprise income tax amount of the corporate income tax period of 2021 for the case that an enterprise specified in Clause 1 of this Article has a turnover in the 2021 tax period not exceeding 200 billion VND. VND and revenue in the tax period 2021 decreased compared to the revenue in the tax period 2019.
The criterion that the revenue in the tax period 2021 is reduced compared to the revenue in the tax period 2019 is not applied to the case of newly established enterprises, consolidation, merger, division or separation in the tax period of 2020 and year 2021.
a) The enterprise income tax period is determined according to the calendar year, in case the enterprise applies a fiscal year different from the calendar year, the enterprise income tax period is determined according to the applicable fiscal year specified in Clause 1 of this Article. Law on Corporate Income Tax and guiding documents.
b) Turnover in the corporate income tax period includes all sales, processing, service provision and business activities in the form of business cooperation contracts, including price subsidies, surcharges and extras that enterprises are entitled to under the provisions of the Law on Corporate Income Tax and its guiding documents, excluding deductions from revenue, revenue from financial activities and other incomes. .
- In case the enterprise is newly established, the enterprise transforms its form of enterprise, transforms the form of ownership, consolidates, merges, divides, separates, dissolves, goes bankrupt in the CIT period of operation. If the period is less than 12 months, the turnover of that tax period is determined by the actual revenue in the tax period divided (:) by the number of months the enterprise actually conducts production and business activities in the tax period multiplied (x) by 12 months. In case the enterprise is newly established, the enterprise transforms its form of enterprise, transforms the form of ownership, consolidates, merges, divides, separates, dissolves, goes bankrupt within a month, the operation period shall be counted in full months. .
In case the first tax period for a newly established enterprise is 2020 or the last tax period for an enterprise that converts its form of enterprise, transforms its ownership form, consolidates, merges, or divides , separation, dissolution, bankruptcy is 2022 but the time is shorter than 03 months and the enterprise is added to the tax period of 2021 to form a corporate income tax period, the determination of revenue and tax amount The discount applies only to 12 months of the tax year 2021.
- In case an enterprise has a dependent unit and a business location, the revenue in the enterprise income tax period includes the revenue of the dependent unit and the business location shown in the annual consolidated financial statements. ."
Pursuant to the above provisions, in case the Company has a revenue in the tax period of 2021 not exceeding VND 200 billion, and at the same time, the revenue in the tax period of 2021 is reduced compared to the revenue in the tax period of 2019, the Company the company is entitled to a 30% reduction of the payable CIT amount of the CIT period of 2021. In case the company is newly established, consolidated, merged, divided, split in the tax period of 2020 and 2021, the criteria shall not apply. revenue in the tax period 2021 is lower than the revenue in the tax period 2019
Hanoi General Department of Taxation: How much corporate income tax reduction in Vietnam for a company with a turnover of no more than 200 billion VND in the tax period 2021?
How to determine the amount of corporate income tax reduction in Vietnam to be reduced?
According to Clause 3, Article 1 of Decree No. 92/2021/ND-CP stipulating how to determine the amount of corporate income tax to be reduced as follows:
The reduced corporate income tax amount of the tax period 2021 is calculated on the entire income of the enterprise, including the incomes specified in Clause 3, Article 18 of the Law on Corporate Income Tax. Enterprises entitled to the reduction specified in this Decree are calculated on the payable corporate income tax amount of the tax period of 2021, after deducting the corporate income tax amount that the enterprise is enjoying incentives according to regulations. of the Law on Corporate Income Tax and its guiding documents.
How to declare corporate income tax reduction in Vietnam?
According to Clause 4, Article 1 of Decree 92/2021/ND-CP, regulations on declaration of reduction of corporate income tax are as follows:
- Based on the revenue in the 2019 tax period and the expected revenue in the 2021 tax period, enterprises themselves determine the tax amount to be reduced when temporarily paying corporate income tax on a quarterly basis. Enterprises determine the officially reduced corporate income tax amount to declare according to the declaration form issued together with the Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance guiding the implementation of a Articles of the Law on Tax Administration and Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government and on the Appendix to corporate income tax are reduced in Appendix II issued with this Decree.
- When making the corporate income tax finalization in 2021, the handling of underpaid or overpaid tax amounts of quarterly temporarily paid tax compared to the payable tax amount according to the annual finalization shall comply with the law on tax payment. Tax Administration.
- Through inspection, examination, audit, tax authorities, competent agencies discover that enterprises are not eligible for tax reduction under the provisions of this Decree or the payable tax amount of the tax period 2021 is large. than the declared tax amount, the enterprise must pay the full amount of tax that is insufficient compared with the payable tax amount after it has been reduced according to the provisions of this Decree (if any), and be sanctioned for administrative violations on tax calculation. on the insufficient tax amount and calculate the late payment interest according to the provisions of the law on tax administration and the law on handling of administrative violations.
- In case the enterprise additionally declares the enterprise income tax declaration file of the tax period of 2021 or according to the decision, conclusion and notification of inspection, examination and audit results of the tax authority, the competent authority authority to increase the amount of corporate income tax payable, the additional tax amount may be reduced by 30% according to the provisions of this Decree if the enterprise still meets the conditions for tax reduction specified in Clause 2 of this Article.
- In case the enterprise additionally declares the enterprise income tax declaration file of the tax period of 2021 or according to the decision, conclusion and notification of inspection, examination and audit results of the tax authority, the competent authority authority to reduce the payable corporate income tax amount, reduce the amount of corporate income tax to be reduced according to the provisions of this Decree and handle the overpaid tax amount (if any) according to the provisions of law on tax payment. Tax Administration.
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