Settlement of Personal Income Tax (PIT), Corporate Income Tax (CIT) in 2016 in Vietnam and Issues to Note

Corporate Income Tax Finalization in Vietnam

To determine the corporate income tax payable when finalizing the corporate income tax for 2016, the following documents should be referenced:

- Law on Corporate Income Tax 2008;

- Law Amending the Law on Corporate Income Tax 2013;

- Law Amending the Laws on Taxation 2014;

- Decree 218/2013/ND-CP guiding the implementation of the Law on Corporate Income Tax;

- Decree 91/2014/ND-CP amending the decrees on taxation;

- Decree 12/2015/ND-CP guiding the Law amending and supplementing several articles of the Laws on Taxation and amending and supplementing several articles of the decrees on taxation;

- Circular 78/2014/TT-BTC guiding the implementation of Decree 218/2013/ND-CP guiding the Law on Corporate Income Tax issued by the Minister of Finance;

- Circular 119/2014/TT-BTC amending Circulars 156/2013/TT-BTC, 111/2013/TT-BTC, 219/2013/TT-BTC, 08/2013/TT-BTC, 85/2011/TT-BTC, 39/2014/TT-BTC, and 78/2014/TT-BTC to reform and simplify administrative tax procedures issued by the Minister of Finance;

- Circular 151/2014/TT-BTC guiding the implementation of Decree 91/2014/ND-CP amending and supplementing several articles of the decrees on taxation issued by the Minister of Finance;

- Circular 96/2015/TT-BTC guiding corporate income tax at Decree 12/2015/ND-CP detailing the implementation of the Law amending and supplementing several articles of the Laws on Taxation and amending and supplementing several articles of Circulars 78/2014/TT-BTC, 119/2014/TT-BTC, and 151/2014/TT-BTC issued by the Minister of Finance.

In addition, when finalizing tax, pay attention to some contents regulated in the following documents:

- Adjustment of conditions for determining deductible expenses when determining taxable income regarding non-cash payment documents for each purchase of goods or services with a value of 20 million VND or more: Circular 173/2016/TT-BTC amending the first paragraph of Clause 3, Article 15 of Circular 219/2013/TT-BTC (as amended by Circulars 119/2014/TT-BTC, 151/2014/TT-BTC, 26/2015/TT-BTC) issued by the Minister of Finance;

- Depreciation expenses of fixed assets: Circular 45/2013/TT-BTC and Circular 147/2016/TT-BTC;

- Establishment, use, and management of the science and technology development fund: Joint Circular 12/2016/TTLT-BKHCN-BTC guiding the contents and management of the enterprise's science and technology development fund.

Tax Rate and Tax Incentives:

- The standard corporate income tax rate applicable in 2016 is 20%;

- Certain tax incentives applied as guided by the General Department of Taxation to:

+ Enterprises engaged in the processing of agricultural and aquatic products;

+ Facilities performing private investment in;

+ Investment expansion, regular investment activities;

+ Production facilities with dependent accounting at other localities enjoying corporate income tax incentives.

Corporate Income Tax Finalization Dossier 2016:

- Forms follow the prescribed templates at Circular 156/2013/TT-BTC

- Corporate income tax finalization declaration forms No. 03/TNDN, 04/TNDN, and appendices 02/TNDN, 03-5/TNDN follow the prescribed templates at Circular 151/2014/TT-BTC.

Personal Income Tax Finalization in Vietnam

When finalizing tax, reference the following documents:

- Law on Personal Income Tax 2007;

- Law Amending the Law on Personal Income Tax 2012;

- Law Amending the Laws on Taxation 2014;

- Decree 65/2013/ND-CP guiding the Law on Personal Income Tax and the Law amending and supplementing several articles of the Law on Personal Income Tax;

- Decree 91/2014/ND-CP amending the decrees on taxation;

- Decree 12/2015/ND-CP guiding the Law amending and supplementing several articles of the Laws on Taxation and amending and supplementing several articles of the decrees on taxation;

- Circular 119/2014/TT-BTC amending Circulars 156/2013/TT-BTC, 111/2013/TT-BTC, 219/2013/TT-BTC, 08/2013/TT-BTC, 85/2011/TT-BTC, 39/2014/TT-BTC, and 78/2014/TT-BTC to reform and simplify administrative tax procedures issued by the Minister of Finance;

- Circular 151/2014/TT-BTC guiding the implementation of Decree 91/2014/ND-CP amending and supplementing several articles of the decrees on taxation issued by the Minister of Finance;

- Circular 111/2013/TT-BTC guiding the Law on Personal Income Tax and Decree 65/2013/ND-CP issued by the Minister of Finance;

- Circular 92/2015/TT-BTC guiding the implementation of value-added tax and personal income tax for resident individuals with business activities; guiding the implementation of some amendments and supplements on personal income tax as stipulated in Law 71/2014/QH13 and Decree 12/2015/ND-CP detailing the implementation of the Law amending and supplementing several articles of the Laws on Taxation and amending and supplementing several articles of the decrees on taxation issued by the Minister of Finance.

Subjects for Personal Income Tax Finalization:

- Individuals with income from salaries and wages;

- Organizations paying income from salaries and wages.

Place for Submitting Tax Finalization Dossier

- For organizations paying income:

+ Organizations conducting production and business submit the tax declaration dossier to the tax authority directly managing the organization.

+ Organizations being Central agencies; agencies belonging to, under Ministries, sectors, Provincial People's Committees; provincial agencies; diplomatic missions, international organizations, representative offices of foreign organizations: submit the tax declaration dossier to the Tax Department where the organization is headquartered.- Organizations under, belonging to District People's Committees; district agencies submit the tax declaration dossier to the District Tax Department where the organization is headquartered.

- For individuals:

+ Individuals  with  income  from  salaries  and  wages  directly  declaring  tax  during  the  year submit  the  tax  finalization  dossier  to  the  Tax  Department  where  the  individual  filed  the  tax  declaration  during  the  year.

+ Individuals  with  income  from  salaries  and  wages  from  two  or  more  places  subject  to  self-tax  finalization:  submit  the  tax  finalization  dossier  as  follows:

• Individuals  who  have  claimed  personal  deductions  at  any  income-paying  organization  must  submit  the  tax  finalization  dossier  to  the  tax  authority  directly  managing  the  income-paying  organization.  If  the  individual  has  changed  workplaces  and  the  final  income-paying  organization  has  claimed  personal  deductions,  submit  the  tax  finalization  dossier  to  the  tax  authority  managing  the  final  income-paying  organization.  If  the  individual  has  changed  workplaces  and  the  final  income-paying  organization  has  not  claimed  personal  deductions,  submit  the  tax  finalization  dossier  to  the  District  Tax  Department  where  the  individual  resides  (permanent  or  temporary  residence).
• If  the  individual  has  not  claimed  personal  deductions  at  any  income-paying  organization,  submit  the  tax  finalization  dossier  to  the  District  Tax  Department  where  the  individual  resides  (permanent  or  temporary  residence).

+ If  the  individual  does  not  sign  a  labor  contract,  or  signs  a  labor  contract  for  less  than  3  months,  or  signs  a  service  provision  contract  with  income  at  one  or  multiple  places  taxed  at  10%,  finalize  the  tax  at  the  District  Tax  Department  where  the  individual  resides  (permanent  or  temporary  residence).

+ If  the  individual  during  the  year  has  income  from  salaries  and  wages  at  one  or  multiple  places  but  at  the  time  of  finalization  is  not  working  at  any  income-paying  organization,  submit  the  tax  finalization  dossier  to  the  District  Tax  Department  where  the  individual  resides  (permanent  or  temporary  residence).

- For individuals residing in multiple places subject to tax finalization at the tax authority where the individual resides, choose one residence to finalize the tax.

Individuals can authorize tax finalization or finalize personal income tax themselves. Income-paying organizations and individuals subject to tax finalization must submit the tax finalization dossier no later than the 90th day from the end of the calendar year. For specific guidance, see HERE.

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