Instructions for CIT finalization

1. What is corporate income tax?

⛳ Corporate income tax is a direct tax, levied directly on the taxable income of an enterprise, including: Income from production and trading activities of goods or services, and other incomes as prescribed under the law.

2. The objects that must pay CIT:

✔ All businesses established in accordance with the provisions of Vietnamese law, must pay tax on taxable corporate income arising anywhere, not only in the territory of Vietnam;

✔ Foreign enterprises, that have a permanent establishment (or not) in Vietnam, must pay tax on taxable corporate income arising anywhere, not only in the Vietnamese territory;

✔ Organizations established under the Law on Cooperatives;

✔ Non-business units established in accordance with Vietnamese law;

✔ Other organizations are doing business and have income.

3. The deadline for CIT finalization:  

☘ Temporary payment of quarterly CIT: the deadline is the 30th of the first month of the quarter after the CIT obligation arises;

☘ Declare CIT according to each time it is incurred: the deadline is the 10th day since the CIT obligation arises;

☘ Finalization of CIT: the deadline is the last day of the 3rd month from the end of the fiscal or calendar year;

☘ Finalization of dissolution: the deadline is the 45th day since the dissolution decision.

4. How to calculate CIT:

️⛳ Formula for calculating CIT:

CIT payable = Taxable income x CIT rate

Income tax calculators. = Taxable income - Tax-free income + Carry forward losses

Taxable incomes=  Revenue - Deductible expenses + Other income

  And:

⏭️ Taxable income includes:

▪️ Income from capital transfer, real estate transfer;

▪️ Income from property ownership, rental, or disposal;

▪️ Income from interest on bank deposits, loans, foreign currency sales, provisions;

▪️ Collecting bad debts that have been written off and are now recoverable; payable debts with unidentifiable owners;

▪️ The amount of income earned from previous years is missed or production and business activities are not located in the territory of Vietnam…

⏭️ Non-taxable income:

▪️ Income from agricultural activities (and technical services for agriculture), forestry, fishery, salt production

▪️ Income from performing scientific and technological research contracts

▪️ Income from business and production activities with the number of employees accounting for 30% or more being disabled, post-treatment people with disabilities, drug addicts, HIV-infected people

▪️ Income from vocational training activities for ethnic minorities, children in extremely difficult circumstances, people undergoing drug treatment, post-treatment addiction, HIV/AIDS infection, and other social evils;

▪️ Income from capital contribution, share purchase, a joint venture with domestic enterprises;

▪️ Funding is provided for educational, scientific, cultural, artistic, humanitarian activities, etc.

▪️ Income from completing tasks assigned by the State from Vietnam Development Bank in the field of investment credit, export credit, credit for people with difficult circumstances...

▪️ Income from technology transfer activities in priority fields for organizations and individuals in areas with extremely difficult socio-economic conditions…

⏭️ Carry forward losses:

 ▪️ Is the negative difference of taxable income, excluding losses carried forward from the previous year. After the tax settlement enterprise suffers a loss for the whole year, it is necessary to continuously transfer the loss into the taxable income of the following years, no more than 5 years from the time when the loss is incurred.

⏭️  Revenue:

▪️ The total amount of money earned from the sale of goods, processing, or providing services, including price subsidies and surcharges that the beneficiary enterprise has received, regardless of whether or not it has received the money.

⏭️ Deductible expenses:

▪️ These are actual expenses incurred in business and production activities with enterprises in the fields of performing national defense and security tasks according to state regulations and fully evidenced by invoices and papers. With invoices for each purchase of goods and services valued at VND 20 million or more, proof of payment for online transactions is required.

⏭️ Customers can find out more about CIT rates here:

5. Where to submit the CIT finalization return:

⛳ Where to submit the CIT finalization return

▪️ Enterprises shall submit CIT declaration documents to the Tax Department or Sub-department directly managing them.

▪️ If the enterprise has a dependent cost-accounting production establishment in a province or centrally run city other than its head office, it shall submit a tax return for the place where the dependent unit is born in the province or city where the head office is located.

⛳Where to pay corporate income tax

▪️ The enterprise shall pay CIT in the locality where the enterprise's head office is located.

▪️ If an enterprise has a dependent cost-accounting production establishment in a province or centrally run city other than its head office, the tax amount shall be paid in the place where it is headquartered and where the production establishment is located. The amount of CIT payable at each place is allocated based on the ratio of expenses incurred at the dependent cost-accounting production establishment to the total costs of the enterprise.

⇒ If you have any questions, please register here for TASCO's earliest advice or contact the hotline: 0975480868 (Zalo)

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