Vietnam: Notable point for CIT finalization in 2020 for businesses

Vietnam: Notable point for CIT finalization in 2020 for businesses (Artwork)

First, the deadline for submitting CIT finalization documents

According to Clause 2, Article 44 of Vietnam's Law on Tax Administration, the deadline for submitting CIT finalization documents with a tax period is the last day of the 3rd month from the end of the calendar year or fiscal year which is December 31, 2021.

For enterprises with a fiscal year other than the calendar year, the deadline for tax finalization is the last day of the third month from the end of the fiscal year.

Second, note when declaring CIT

According to Clause 2, Article 11 of Vietnam's Circular 78/2014/TT-BTC, enterprises must determine and declare sufficient information in the CIT finalization declaration according to form 03/TNDN, issued together with Circular 78/2014/TT-BTC. BTC.

Note: the industry with the highest turnover rate; the ratio of business lines with the highest turnover ratio; and the total revenue of the tax period.

In particular, enterprises must identify and declare associated transaction information. Specifically, businesses should pay attention to accurately identifying the subjects that must declare, control, and fully declare related transaction information and correctly determining the deductible loan interest expense (the 30% limit) when calculating CIT according to the provisions of Vietnam's Decree 132/2020/ND-CP to limit errors.

Third, reduce tax for businesses with revenue not exceeding 200 billion VND

According to Article 2 of Vietnam's Decree 114/2020/ND-CP stipulating a 30% reduction in the payable CIT amount of the 2020 CIT calculation period, in case an enterprise has a total revenue of 2020 not exceeding VND 200 billion.

Note: The total revenue is 2020 that is the basis for determination of eligibility for CIT reduction prescribed in Clause 1 of this Article is the total revenue of an enterprise in the fiscal year 2020, including revenue from sales of goods, processing and service provision, subsidies and extra charges to which the enterprise is entitled as prescribed by the Law on Corporate Income Tax and its guiding documents.

At the same time, the reduced CIT amount specified above shall apply to the enterprise’s CIT payable in the fiscal year 2020 minus the CIT eligible for incentives to which the enterprise is entitled according to the Law on Corporate Income Tax and its guiding documents.

Le Vy

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