Vietnam: Instructions for declaration and finalization of 2017 and 2018 corporate income taxes

Vietnam: Instructions for declaration and finalization of 2017 and 2018 corporate income taxes (Illustration)

Vietnam's Decree 132/2020/ND-CP clearly stipulates the following issues:

1. Vietnam's Decree 132/2020/ND-CP shall enter into force on December 20, 2020 and take effect from the corporate income tax term of 2020.

2. Vietnam's Decree 20/2017/ND-CP dated February 24, 2017 and the Decree 68/2020/ND-CP dated June 24, 2020 of the Government, regulating the tax administration for enterprises engaged in the transfer pricing, shall be repealed from the effective date of this Decree.

3. Declaration and finalization of 2017 and 2018 corporate income taxes:

- If taxpayers subject to the requirement for supplements to corporate income tax finalization returns in 2017 and 2018 under the provisions of clause 2 of Article 2 of the Government’s Decree 68/2020/ND-CP dated June 24, 2020 have not yet made additional declaration for incorporate income tax finalization returns, they may continue to do so by January 1, 2021;

- If taxpayers already receiving inspections, examinations or audits of tax authorities or competent regulatory authorities and obtaining conclusions therefrom and handling decisions for the 2017 and 2018 taxable period fall within the cases in which they are qualified for the redetermination of tax amounts payable under point c of clause 2 of Article 2 in the Decree 68/2020/ND-CP dated June 24, 2020, but have not yet submitted applications to tax authorities till the effective date of this Decree, they shall be entitled to request directly supervisory tax authorities to redetermine tax amounts payable;

- In case where taxpayers’ corporate income tax amounts or late payment amounts in 2017 and 2018 already paid to the state budget are greater than redetermined ones, the difference shall be offset against the amounts of corporate income tax accrued for the period from 2020 to end of 2024. After such period expires, tax amounts that remain after such offset shall not be further handled.

4. In case where loan interest costs are carried forward to the following taxable period upon the finalization of corporate income tax in 2019 under the Decree 68/2020/ND-CP, the time limit for carry-forward of loan interest costs shall not be longer than 5 consecutive years after the 2020’s CIT period. After expiry of such 5-year period, if such costs are not completely carried forward, the remaining portion of loan interest costs shall not be brought forward to the following taxable periods.

Thuy Tram

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