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 on certain provisions of the Law on Tax Administration.

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

- Taxpayers must self-determine the remaining after-tax profit after setting up temporary quarterly funds, to be submitted no later than the 30th of the following quarter in which the obligation arises, and may deduct the remaining after-tax profit after setting up temporary funds with the payable amount according to the annual finalization.

- The total remaining after-tax profit after setting up temporary funds for the 04 quarters must not be less than 80% of the remaining after-tax profit after setting up funds according to the annual finalization.

In case the taxpayer underpays compared to the amount to be temporarily submitted for the 04 quarters, it must pay late payment penalties on the underpaid amount from the day after the last day of the temporary deposit of the remaining after-tax profit after setting up funds for the 04th quarter until the consecutive day before the date of paying the remaining after-tax profit after setting up funds into the state budget.

- Regarding the additional amount of remaining after-tax profit after setting up funds to be paid when submitting supplementary declarations due to adjustments in the classification results of enterprises as announced by the owner from the day after the last day for submitting the remaining after-tax profit according to the annual finalization up to the deadline for announcing the enterprise classification results by the owner as per authorized agency’s regulations, the enterprise will not be subject to late payment penalties.

- The representative holding the capital of enterprises wholly owned by the state and contributing capital to joint-stock companies and limited liability companies with two or more members is responsible for voting to pay dividends and profits when all conditions prescribed by the Law on Enterprises are met. At the same time, they must propose and urge the joint-stock companies and limited liability companies with two or more members to submit the shared dividends and profits to the enterprise capital held by the state, which owns 100% of the charter capital.

(Current regulations stipulate that the total remaining after-tax profit after setting up temporary funds for the first 03 quarters of the taxation year must not be less than 75% of the remaining after-tax profit after setting up funds according to the annual finalization.)

Additionally, the corporate income tax for foreign transport companies is temporarily paid quarterly and finalized annually. The total temporarily paid corporate income tax for the 04 quarters must not be less than 75% of the payable corporate income tax according to the annual finalization.

In case the taxpayer underpays compared to the amount to be temporarily submitted for the 04 quarters, it must pay late payment penalties on the underpaid tax amount from the day after the last day of the temporary deposit of the corporate income tax for the 04th quarter until the consecutive day before the date of paying the remaining tax into the state budget.

(Current regulations stipulate that the total temporarily paid corporate income tax for the first 03 quarters of the taxation year must not be less than 75% of the payable corporate income tax according to the annual finalization.)

Note:

- As of the effective date of Decree 91, taxpayers who have temporarily paid the tax for the first 03 quarters of the taxation year 2021 not less than 75% of the amount payable according to the annual finalization shall not apply the temporary payment ratio of 04 quarters as stipulated in Clauses 3, 4, and 5, Article 1 of Decree 91.

- As of the effective date of Decree 91, if taxpayers have temporarily paid the tax for the first 03 quarters of the taxation year 2021 less than 75% of the amount payable according to the annual finalization, they can apply the temporary payment ratio of 04 quarters as stipulated in Clauses 3, 4, and 5, Article 1 of Decree 91 if it does not increase the late payment penalty amount.

In cases where authorized agencies carry out inspection, investigation, and have calculated the late payment penalties according to Point b, Point c, Point g, Clause 6, Article 8 of Decree 126/2000/ND-CP, and when applying the temporary payment ratio of 04 quarters in Clauses 3, 4, and 5, Article 1 of Decree 91 reduces the late payment penalty amount, taxpayers must submit a written request to adjust and reduce the late payment penalty using Form 01/GTCN appended to Decree 91 to the tax authority where the late payment arises (either the direct managing tax authority or the tax authority benefiting from the corporate income tax incentives).

If the adjustment results in excess late payment penalties, follow the regulations in Article 60 and Chapter VIII of the Law on Tax Administration 38/2019/QH14 and other guiding documents.

More details can be found in Decree 91/2022/ND-CP effective from the date of signing and issuance.

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