What is the formula for calculation of enterprise income tax in Vietnam? What enterprise incomes are subject to tax-exempt incomes in Vietnam?

What are enterprise taxable incomes in Vietnam?

Pursuant to Article 3 of the Law on Enterprise Income Tax in 2008 (amended by Clause 1 Article 1 of the Law on amendments to Tax Laws in 2014) stipulating enterprise taxable incomes in Vietnam as follows:

[1] Taxable incomes include income from goods and service production and business activities and other incomes.

[2] Other incomes include:

- Income from transfer of capital, transfer of the right to capital contribution;

- Income from real estate transfer, transfer of construction projects, transfer of the right to participate in construction projects, transfer of the right to mineral exploration, mineral extraction, and mineral processing;

- Income from the right to enjoyment of property, right to ownership of property, including income from intellectual property rights defined by law;

- Income from transfer, lease, liquidation of assets, including valuable papers;

- Income from deposit interest, loan interest, sale of foreign exchange;

- Collection of debts that were cancelled;

- Receipts from debts without creditors;

- Incomes from business operation in previous years that were committed, and other incomes.

With regard to Vietnamese companies making investments in the countries with which Vietnam have Double Taxation Agreement and transfer incomes exclusive of corporate income tax paid overseas to Vietnam, regulations of such Double Taxation Agreements shall apply.

If investments are made in countries with which Vietnam has not had Double Taxation Agreements, and if corporate income tax incurred in such countries is lower than that imposed by the Law on Corporate income tax of Vietnam, the tax difference shall be paid.

What is the formula for calculation of enterprise income tax in Vietnam? What enterprise incomes are subject to tax-exempt incomes in Vietnam? - Source: Internet

What is the formula for calculation of enterprise income tax in Vietnam?

Pursuant to Clause 2 Article 4 of the Circular 78/2014/TT-BTC (amended by Article 2 of the Circular 96/2015/TT-BTC) stipulating determination of taxable income as follows:

Determination of taxable income

...

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

Incomes from the business operation equals (=) revenue from the business operation minus (-) deductible expenses of such business operation. If an enterprise engages in multiple business operations that apply various tax rates, revenue from each of them must be calculated separately, which is multiplied by the corresponding tax rate.

...

As regulations above, enterprise income tax in a tax period is calculated as follows:

What enterprise incomes are subject to tax-exempt incomes in Vietnam?

Pursuant to Article 4 of the Law on Enterprise Income Tax in 2008 (amended by Clause 3 Article 1 of the Law on Enterprise Income Tax in 2013 and the Law on amendments to Tax Laws in 2014) stipulating tax-exempt incomes as follows:

- Income from crop production, animal husbandry, aquaculture, processing of agricultural, aquatic products, and salt production of cooperatives; income of cooperatives operating in the fields of agriculture, forestry, fishery, and salt production in areas with difficult economic and social conditions or in areas with extremely difficult economic and social conditions.

- Income of enterprises from crop production, animal husbandry, aquaculture, processing of agricultural, aquatic products in areas with extremely difficult economic and social conditions; income from fishing activities.

- Income from providing direct technical services to support agriculture.

- Income from implementing research and development contracts, products in the trial production period, products made from new technologies that are first applied in Vietnam.

- Income from the production, business of goods and services of enterprises with an average of 30% or more of disabled workers, people after drug rehabilitation, people infected with the virus that causes the acquired immunodeficiency syndrome (HIV/AIDS) in a year, and an average of 20 or more employees in a year, excluding enterprises operating in the financial sector and real estate business.

- Income from vocational training activities dedicated to ethnic minorities, people with disabilities, children in difficult circumstances, and social evils.

- Income shared from the activities of contributing capital, joint ventures, and linkages with domestic enterprises, after corporate income tax has been paid.

- Amount of sponsorship received for use for educational, scientific research, cultural, artistic, charitable, humanitarian, and other social activities in Vietnam.

- Income from the transfer of emission reduction certificates (CERs) of enterprises that are issued emission reduction certificates.

- Income from the performance of tasks assigned by the State of the Vietnam Development Bank in investment development credit, export credit; income from credit activities for the poor and other policy beneficiaries of the Social Policy Bank; income of state financial funds and other state funds that operate not for profit under the law; income of an organization that is 100% owned by the State established by the Government to resolve bad debts of Vietnamese financial organizations.

- Undivided income of the facility that implements socialization in the fields of education - training, health care, and other socialized fields to be left for investment development of that facility according to the regulations of the specialized law on the field of education - training, health care, and other socialized fields; part of the income forming the undivided assets of the cooperative established and operating in accordance with the provisions of the 2012 Cooperative Law.

- Income from technology transfer in the priority transfer field for organizations and individuals in areas with extremely difficult economic and social conditions.

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