Guidance on assessment of payable CIT amounts using tax imposition method in Vietnam

Guidance on assessment of payable CIT amounts using tax imposition method in Vietnam (Internet image)

Article 7 of Circular 71/2010/TT-BTC stipulates that assessment of payable CIT amounts using tax imposition method in Vietnam for violating vehicles as follows:

- The payable CIT amount shall be assessed based on the assessed selling price, the quantity of violating vehicles and the CIT rate.

- The payable CIT amount shall be assessed as follows:

Payable CIT amount determined through assessment = Quantity of violating vehicles x Assessed selling price x CIT percentage

The assessed selling price is the normal market price (converted into VAT-exclusive price). The CIT percentage is 2%.

- The taxed income from the quantity of violating vehicles will be determined as follows:

- Turnover from the quantity of violating vehicles shall be determined based on value-added sale invoices (turnover declared by business establishments) and converted into VAT-exclusive prices.

- Deductible expenses for the quantity of violating vehicles are actually arising expenses related to these vehicles and have lawful invoices and documents under the law on CIT (amounts declared by business establishments).

- The CIT amount to be additionally paid for the quantity of violating vehicles shall be added to the CIT amount payable for the quantity of automobiles and motorbikes sold in accordance with regulations and the CIT amount payable for other business activities and may be offset against the paid CIT amount in the inspection period.

More details can be found in Circular 71/2010/TT-BTC, which comes into force from June 21, 2010.

Nguyen Phu

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