Vietnam: Guidelines on procedures for CIT reduction in 2020

Procedures for CIT reduction are guided in the Draft Decree elaborating the implementation of the Resolution of the National Assembly of Vietnam on reduction in corporate income tax payable in 2020 by enterprises, cooperatives, public service providers and other organizations as follows:

Firstly, enterprises shall calculate the CIT reduction themselves when paying quarterly CIT and making the 2020’s CIT statement.

Secondly, when preparing the 2020 CIT finalization declaration, after determining the tax amount to be reduced according to regulations, the enterprise must record it in item 9.2 - the amount of CIT exempted or reduced is not according to the Corporate Income Tax Law of the Corporate Income Tax Finalization Declaration: “the reduced tax amount is accompanied by a note to reduce the tax amount payable in 2020 by 30% according to the provisions of Resolution No. .../2020/QH14 of the National Assembly".

Note: CIT finalization declaration form shall be made according to form No. 03/TNDN provided in Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance of Vietnam and its amending documents (if any).

Thirdly, tax authorities do not have to notify businesses about accepting tax reductions. In case during the tax reduction period, the tax authority has a basis to determine that the enterprise is not eligible for tax reduction, the tax authority shall notify the enterprise in writing of the non-reduction of taxes and the enterprise must pay the full amount of tax and late payment interest according to regulations to the state budget.

Fourthly, in case after the tax reduction period expires, the tax authority discovers through inspection that the enterprise is not eligible for tax reduction as prescribed in this Decree or the tax amount declared for reduction is greater than the tax amount to be reduced according to regulations, the enterprise must repay the tax deficiency, fines and late payment interest determined by the tax authority back into the state budget.

Fifthly, if after the tax reduction period expires, the tax authority discovers through inspection that the enterprise has received a greater reduction than the previously declared tax reduction, enterprises can make additional declarations to continue enjoying the reduced tax amount according to the level redetermined by the tax authority.

View more details at the Draft Decree elaborating the implementation of the Resolution of the National Assembly of Vietnam on reduction in corporate income tax payable in 2020 by enterprises, cooperatives, public service providers and other organizations.

Long Binh

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