What are instructions for calculating taxed income and taxable income of corporate income tax in Vietnam?
What are instructions for calculating taxed income and taxable income of corporate income tax in Vietnam? Hope to get an answer. Question from Mr. Thanh in An Giang.
What are instructions for calculating taxed income and taxable income of corporate income tax in Vietnam?
Pursuant to Article 4 of Circular 78/2014/TT-BTC, amended and supplemented by Article 2 of Circular 96/2015/TT-BTC, regulations on determination of taxed income are as follows:
Determination of taxed income
1. The taxed income in a tax period shall be determined to be taxable income minus tax-exempted income and losses carried forward from previous years under regulations.
Taxed income shall be determined by the following formula:
Taxed income
=
Taxable income
-
{
Tax-exempted income
+
Losses carried forward under regulations
}
2. Taxable income
Taxable income in a tax period includes income from manufacturing, trading of goods, services (hereinafter referred to as business operation), and other incomes.
Taxable income in a tax period is calculated as follows:
Taxable income
=
Revenue
-
Deductible expenses
+
Other incomes
...
Thus, income subject to corporate income tax and income subject to corporate income tax in Vietnam are determined as follows:
- Taxable income = Taxable income - (Tax-exempted income + Losses carried forward under regulations)
- Taxable income = (Revenue - Deductible expenses) + Other incomes.
What are instructions for calculating taxed income and taxable income of corporate income tax in Vietnam? (Image from the Internet)
What is time for determining revenue for calculating income subject to corporate income tax in Vietnam?
Pursuant to Clause 2, Article 5 of Circular 78/2014/TT-BTC, amended and supplemented by Article 3 of Circular 96/2015/TT-BTC stipulating the time for determining revenue for calculating taxable income, specifically:
Turnover
...
2. Time for determining revenue for calculating taxable income is:
a) For goods sale: the time when the right to ownership and/or right to enjoyment of goods is transferred to the buyer.
b) For service provision: the time when service provision is completed or part of service provision is completed except for the case in Clause 3 Article 5 of Circular No. 78/2014/TT-BTC, Clause 1 Article 6 of Circular No. 119/2014/TT-BTC.
c) For air transport: the time when provision of transport services is completed.
d) Other cases defined by law.
Thus, the time for determining revenue for calculating taxable income is:
- Time of transfer of ownership and use rights of goods to the buyer for goods sale activities;
- Time of completion of service provision or partial completion of service provision to the buyer for service provision activities;
- Time of completion of the provision of transportation services to the buyer for air transport activities;
- Other cases as prescribed by law.
What is current corporate income tax rate in Vietnam?
Pursuant to Article 10 of the Law on Corporate Income Tax 2008, amended and supplemented by Clause 6, Article 1 of the Revised Law on Corporate Income Tax 2013 and replaced with some content by Clause 1, Article 67 of the Petroleum Law 2022, providing tax rates are as follows:
Tax rate
1. The corporate income tax rate is 22%, except for the cases in Clause 2 and Clause 3 of this Article and beneficiaries of tax incentives defined in Article 13 of this Article.
From January 1st 2016, the tax rate of 20% shall apply to the cases to which the tax rate of 22% in this Clause applies.
2. Any enterprise whose total revenue in the year does not exceed 20 billion VND shall be eligible for applying the tax rate of 20%.
The revenue used as the basis for identifying enterprises eligible for the tax rate of 20% in this Clause is the revenue of the previous year.
3. The corporate income tax rate applicable to petroleum operations ranges from 25% to 50% depending on each petroleum contract; the corporate income tax rate applicable to exploration and extraction of other rare and precious resources in Vietnam ranges from 32% to 50% depending on each project and each business establishment.
The Government shall elaborate and provide guidance on the implementation of this Article.
According to this Article, the current corporate income tax rate is prescribed as follows:
(1) The corporate income tax rate is 20% for:
- Enterprises apply the tax rate of 22% before January 1, 2016;
- Enterprises with total annual revenue of not more than 20 billion VND in the immediately preceding year;
(2) Corporate income tax rate for oil and gas activities ranges from 25% to 50% in accordance with each oil and gas contract
(3) The corporate income tax rate for search, exploration, and exploitation of other rare and precious resources in Vietnam ranges from 32% to 50%, suitable for each project and each business establishment.
Best regards!
