From October 30, 2022, how is the provisional corporate income tax rate adjusted according to Decree 91/2022/ND-CP?
How is the provisional corporate income tax payment adjusted?
Recently, Decree 91/2022/ND-CP was issued to amend and supplement several articles of Decree 126/2020/ND-CP, which stipulates the provisional corporate income tax payment calculated over four quarters with specific adjustments as follows:
Previously, according to the provisions of point b clause 6 Article 8 of Decree 126/2020/ND-CP:
Taxes declared monthly, quarterly, annually, incidentally arising tax obligations, and annual tax finalization
...6. Taxes, fees, and charges declared annually and finalized up to the time of dissolution, bankruptcy, cessation of activities, termination of contracts, 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. To be specific:...b) Corporate income tax (except corporate income tax from capital transfers of foreign contractors; corporate income tax declared by a proportional method on each transaction or monthly under point d of clause 4 of this Article). The taxpayer determines the provisional quarterly corporate income tax (including provisional allocation of corporate income tax to provinces with dependent units, business locations, or real estate transactions different from the head office) and deducts it from the payable annual tax finalization.Taxpayers who are required to prepare quarterly financial statements according to accounting regulations determine the provisional quarterly corporate income tax based on the quarterly financial statements and tax laws.Taxpayers not required to prepare quarterly financial statements according to accounting regulations determine the provisional quarterly corporate income tax based on quarterly production and business results and tax laws.The total provisional corporate income tax amount for the first three quarters must not be less than 75% of the annual corporate income tax amount payable under the annual tax finalization. If the taxpayer underpays the provisional tax for the first three quarters, late payment interest is calculated on the shortfall from the day after the due date for the third quarterly provisional tax payment to the day the shortfall is paid to the government.
According to the provisions of clause 3 Article 1 of Decree 91/2022/ND-CP, this provision is amended as follows:
Taxes declared monthly, quarterly, annually, incidentally arising tax obligations, and annual tax finalization
...6. Taxes, fees, and charges declared annually and finalized up to the time of dissolution, bankruptcy, cessation of activities, termination of contracts, 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. To be specific:...The total provisional corporate income tax amount for the four quarters must not be less than 80% of the annual corporate income tax amount payable under the annual tax finalization. If the taxpayer underpays the provisional tax for the four quarters, late payment interest is calculated on the shortfall from the day after the due date for the fourth quarterly provisional tax payment to the day before the shortfall is paid to the government.
Thus, under the new regulation, the total provisional corporate income tax amount for the four quarters must not be less than 80% of the annual corporate income tax amount payable under the annual tax finalization.
How is the provisional corporate income tax payment adjusted? How is the due date for tax declaration determined? (Image from the Internet)
In case taxpayers have finalized the provisional tax amount for the year 2021, how is the new regulation applied?
According to the provisions of clause 1 Article 2 of Decree 91/2022/ND-CP on this matter as follows:
- As of the effective date of this Decree, if taxpayers have made provisional tax payments for the first three quarters of the tax year 2021 not less than 75% of the payable amount under the annual tax finalization, the four-quarter provisional rate stipulated in clause 3, clause 4, and clause 5 Article 1 of Decree 91/2022/ND-CP does not apply.- As of the effective date of this Decree, if taxpayers have made provisional tax payments for the first three quarters of the tax year 2021 less than 75% of the payable amount under the annual tax finalization, they may apply the four-quarter provisional payment rate stipulated in clause 3, clause 4, and clause 5 Article 1 of Decree 91/2022/ND-CP, provided this does not increase the late payment interest amount.
In cases where the competent authority conducts inspections and calculates late payment interest according to points b, c, and g of clause 6 Article 8 of Decree 126/2020/ND-CP, and applying the four-quarter provisional rate in clause 3, clause 4, and clause 5 Article 1 of this Decree reduces the late payment interest amount, taxpayers can request an adjustment to reduce the late payment interest as per Form 01/GTCN in the appendix issued with this Decree, to be submitted to the tax authority where the late payment arises (the direct managing tax authority or the tax authority with activities benefiting from corporate income tax incentives).
After adjustment, if there is any excess late payment interest paid, it will be processed according to the provisions of Article 60 and Chapter VIII of the 2019 Law on Tax Administration and guiding documents.
How is the due date for tax declaration determined?
According to the provisions of clause 1 Article 1 of Decree 91/2022/ND-CP supplementing the regulations on the due date for tax declaration, as follows:
The deadline for tax declaration, tax payment, handling of dossiers by tax authorities, and the effective duration of coercive decisions on enforcement of tax administrative decisions are implemented according to regulations in the Law on Tax Administration and Decree 91/2022/ND-CP. In cases where the last day of these deadlines coincides with a public holiday, the final day is considered the first working day following the holiday.
Decree 91/2022/ND-CP takes effect from October 30, 2022.
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