How to determine the revenues subject to corporate income tax in Vietnam?

How to determine the revenues subject to corporate income tax in Vietnam?

Based on Article 8 of Decree 218/2013/ND-CP, the revenues subject to corporate income tax in Vietnam is determined as follows:

- Revenue for calculating taxable income includes the total sales revenue, service provision fees, including subsidies, surcharges, and additional charges that a business is entitled to, regardless of whether the money has been collected or not.

For businesses declaring and paying value-added tax (VAT) by the tax deduction method, the revenues subject to corporate income tax in Vietnam is the revenue excluding VAT.

For businesses declaring and paying VAT by the direct method on added value, the revenues subject to corporate income tax in Vietnam includes VAT.

- The point in time for determining revenue for calculating taxable income for sold goods is the time of transfer of ownership or use rights of the goods to the buyer.

How to determine the revenues subject to corporate income tax in Vietnam? (Image from the internet)

What are deadlines for declaring and paying corporate income tax in Vietnam?

Based on Articles 44 and 55 of the Law on Tax Administration 2019, the deadlines for declaration, payment, and finalization of corporate income tax in Vietnam  are as follows:

- The deadline for quarterly provisional corporate income tax payment: No later than the last day of the first month of the next quarter in which tax obligations arise.

- The deadline for annual tax finalization: No later than the last day of the third month from the end of the calendar year or fiscal year.

What are incomes subject to Corporate Income Tax in Vietnam?

Based on Article 3 of the Corporate Income Tax Law 2008, amended by Clause 1 Article 1 of Law No. 71/2014/QH13 on revised taxes 2014, taxable income includes income from production, business of goods, services, and other income.

Other income includes:

- Income from the transfer of capital, transfer of capital contribution rights;

- Income from the transfer of real estate, transfer of investment projects, transfer of the right to participate in investment projects, transfer of the right to explore, exploit, and process minerals;

- Income from property use rights, ownership rights, including income from intellectual property rights as prescribed by law;

- Income from the transfer, lease, liquidation of assets, including all types of valuable papers;

- Income from interest deposits, lending capital, selling foreign currency; collections from bad debts that have been written off but are now recoverable;

- Collections from unidentified payable debts;

- Income from the business of previous years omitted and other income.

* For Vietnamese enterprises investing abroad, transferring income after having paid corporate income tax abroad back to Vietnam, if Vietnam has signed a Double Taxation Avoidance Agreement with those countries, the Agreement's regulations apply; for countries where Vietnam has not signed such an Agreement, if the corporate income tax rate in the countries from which the enterprise transfers funds back is lower, the difference will be collected compared to the corporate income tax calculated under Vietnam's Corporate Income Tax Law.

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