Decree 91/2022/ND-CP: Provisional CIT payment of 04 quarters in Vietnam are not less than 80% of the annual amount

Hello Ms., Lawnet would like to address your query as follows:

On October 30, 2022, the Government of Vietnam issued Decree 91/2022/ND-CP, amending Decree 126/2020/ND-CP, which details some provisions of the Law on Tax Administration.

Decree 91 amends the regulation at Clause 6, Article 8 of Decree 126/2020/ND-CP. To be specific:

- Taxpayers must determine the remaining after-tax profits after setting up funds on a quarterly basis, and must temporarily pay it by the 30th of the following quarter. They can deduct the remaining after-tax profits post-funding from the annual settlement profit payable.

- The total remaining after-tax profits post-funding temporarily paid for all 4 quarters must not be less than 80% of the remaining after-tax profits post-funding as per the annual settlement.

In case the taxpayer's temporary payments for the 4 quarters are less than required, late payment interest will be applied to the shortfall from the deadline for the temporary payment of the remaining after-tax profits post-funding of quarter 4 until the day before paying the shortfall into the state budget.

- For the increased remaining after-tax profits post-funding required to be paid when making additional declarations due to adjustments in enterprise rankings according to the owner's announcement, from the deadline for the annual settlement until the announcement of the enterprise ranking by the competent authority, the enterprise will not be charged late payment interest.

- Representatives of capital portions of enterprises wholly owned by the state in joint-stock companies and two-member limited liability companies or more are responsible for voting to pay dividends and profits when conditions are met according to the Law on Enterprises. They must also urge these companies to submit the dividends and profits allocated to the capital portion held by the state.

(The current regulation mandates that the total remaining after-tax profits post-funding temporarily paid for the first 3 quarters of the tax year must not be less than 75% of the remaining after-tax profits post-funding as per the annual settlement.)

Additionally, Corporate Income Tax (CIT) for foreign transport companies is paid temporarily on a quarterly basis and finalized annually. The total temporary CIT payments for all 4 quarters must not be less than 80% of the CIT payable according to the annual settlement.

In case the taxpayer's temporary CIT payments for the 4 quarters are less than required, late payment interest will be applied to the shortfall from the deadline for the temporary payment of CIT for quarter 4 until the day before paying the shortfall into the state budget.

(The current regulation mandates that the total temporary CIT payments for the first 3 quarters of the tax year must not be less than 75% of the CIT payable according to the annual settlement.)

Please note:

- As of the effective date of Decree 91, if the taxpayer's temporary tax payments for the first 3 quarters of the 2021 tax year are not less than 75% of the amount payable as per the annual settlement, the 4-quarter temporary payment ratio in Clauses 3, 4, 5 of Article 1 of Decree 91 will not be applied.

- As of the effective date of Decree 91, if the taxpayer's temporary tax payments for the first 3 quarters of the 2021 tax year are less than 75% of the amount payable as per the annual settlement, the 4-quarter temporary payment ratio stipulated in Clauses 3, 4, 5 of Article 1 of Decree 91 can be applied without increasing the late payment amount.

In case the competent authority's inspection and audit have calculated late payment interest according to points b, c, g, Clause 6, Article 8 of Decree 126/2000/ND-CP, and if applying the 4-quarter ratio in Clauses 3, 4, Article 1 of Decree 91 reduces the late payment interest, the taxpayer can request an adjustment to decrease the late payment interest according to Form 01/GTCN in the appendix attached to Decree 91, submitted to the tax authority where the late payment began (either the directly managing tax authority or the tax authority for entities benefiting from CIT incentives).

If, after the adjustment, there is an overpayment of late payment interest, it will be handled according to Article 60 and Chapter VIII of the Law on Tax Administration 38/2019/QH14 and its guiding documents.

For more details, please refer to Decree 91/2022/ND-CP, which is effective from the date of signing.

Best regards,[Your Name]

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