Regulations on VAT and CIT for press agencies which self-finance their operations in Vietnam

Regulations on VAT and CIT for press agencies which self-finance their operations in Vietnam (Illustrative Image)

According to Article 2 of Circular 150/2010/TT-BTC, stipulating VAT and CIT for press agencies which self-finance their operations is as follows:

1. Regarding VAT:

- Press agencies which self-finance their operations shall separately account for revenue from advertising activities to pay VAT according to the deduction method stipulated in the VAT Law and guiding documents.

- Press agencies which self-finance their operations are allowed to deduct all input VAT of fixed assets formed from the Development Fund of the newspaper and fixed assets used concurrently for the production and business of goods and services subject to VAT and not subject to VAT.

- In case the fixed assets are partly formed from state budget capital, the input VAT corresponding to the proportion of state budget capital over the total capital forming the fixed assets shall not be deducted but included in the initial cost of the fixed assets.

- For fixed assets formed from state budget capital, the input VAT of the fixed assets shall not be deducted but included in the initial cost of the fixed assets.

2. Regarding CIT:

- Press agencies which self-finance their operations that engage in commercial activities, providing services such as advertising, information dissemination, and other services subject to CIT shall account for revenues and expenses to determine taxable income in accordance with the CIT Law and guiding documents. In case journalistic activities have higher expenses than revenue and advertising activities yield income, the newspaper can use the income from advertising activities to offset the journalistic activities' deficit before determining the taxable income for CIT purposes.

- The CIT rate of 25% applies to income from advertising activities on the newspaper and from other goods and services business activities.

- Certain expense items of the newspaper are handled as follows:

- Salary expenses included in reasonable expenses when determining taxable income are the actual salaries paid by the newspaper to employees, with valid and legal documents.

- Expenses for complimentary newspaper issues directly related to business activities are included in reasonable costs to determine taxable income but are limited as stipulated in point n, clause 2, Article 9 of the CIT Law (not exceeding 10% of total deductible costs; for newly established newspapers, not exceeding 15% in the first three years from the date of establishment), except for complimentary newspapers for individuals with contributions to the revolution, war invalids, sick soldiers, officers and soldiers on islands, in remote, difficult areas, and state management agencies.

- Expenses covered by state budget funds are not included in deductible costs when determining taxable income.

- Other expenses not stipulated in this clause shall be handled according to the CIT Law and guiding documents.

- The newspaper may establish a Science and Technology Development Fund. The establishment, management, and use of the Science and Technology Development Fund shall comply with current regulations.

See more details at: Circular 150/2010/TT-BTC, effective from November 11, 2010.

Nguyen Phu

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