LEARNING OUTCOMES
• LO 6-1: Understand concept, characteristics and role of CIT.
• LO 6-2: Specify taxable subjects and taxpayers of current
CIT of Vietnam.
• LO 6-3: Define tax base, tax period and tax rate of current
CIT of Vietnam.
• LO 6-4: Recognize revenues, deductible expenses and
other incomes of current CIT of Vietnam.
• LO 6-5: Explain tax exemption, loss transfer and tax
incentives of current CIT of Vietnam.
• LO 6-6: Define incomes from capital transfer, security
transfer and real estate transfer.
37 trang |
Chia sẻ: Thục Anh | Ngày: 25/05/2022 | Lượt xem: 735 | Lượt tải: 1
Bạn đang xem trước 20 trang nội dung tài liệu Giáo trình Taxation - Chapter 6: Corporate Income Tax (CIT), để xem tài liệu hoàn chỉnh bạn click vào nút DOWNLOAD ở trên
industrial zones and difficult socio-economic
areas.
▪ Large manufacturing projects (excluding those
related to the manufacture of products subject to
special sales tax or those exploiting mineral
resources) with total capital of VND6,000 billion
(VND12,000 billion from 2015) or more, disbursed
within 3 years (5 years from 2015) of being
licensed can also qualify for CIT incentives if the
projects meet either of the following criteria:
➢ minimum revenue of VND10,000
billion/annum by the 4th year of operation at
the latest; or
➢ head count of more than 3,000 by the 4th
year of operation at the latest.
TAX INCENTIVES (CONT.)
• ABC
▪ New investment projects engaged in manufacturing
industrial products prioritized for development will
be entitled to CIT incentives if they meet one of the
following conditions:
➢ the products support the high technology sector;
or
➢ the products support the garment, textile,
footwear, IT, automobile assembly, mechanical
sectors are not produced domestically as at 1
January 2015, or if produced domestically, they
meet the quality standards of the EU or
equivalent.
▪ The two common preferential rates of 10% and 20%
are available for 15 years and 10 years respectively,
starting from the commencement of operating
activities. From 1 January 2015, a preferential rate
of 15% will apply in certain cases. Certain socialized
sectors (e.g. education, health) enjoy the 10% rate
for the life of the project.
▪ Taxpayers may be eligible for tax exemption and
reductions. The holidays take the form of a
complete exemption from CIT for a certain period
beginning immediately after the enterprise first
makes profits, followed by a period where tax is
charged at 50% of the applicable rate. However,
where the enterprise has not derived taxable profits
within 3 years of the commencement of operations,
the tax holiday/tax reduction will start from the
fourth year of operation.
▪ Additional tax reductions may be available for
companies engaging in manufacturing, construction
and transportation activities which employ many
female staff or ethnic minorities.
▪ Tax incentives available for investment in
encouraged sectors do not apply to other income
(except for income which directly relates to the
incentivized activities such as disposal of scrap).
INCOMES FROM CAPITAL TRANSFER
• ABC▪ An enterprise’s income from capital transfer is income earned from the transfer of part
or the whole of the capital amount the enterprise has invested in one or many other
organizations or individuals (including sale of the whole enterprise).
▪ Tax bases: CIT payable = Taxed incomes × CIT rate (20%)
Taxed
incomes
=
Transfer
price
-
Purchasing price of the
transferred capital
-
Transfer
expenses
+ Transfer price is the total actual value earned by the transferor under the transfer contract
excluding installment or deferred payment interests (if any).
+ Purchasing price of the transferred capital can be the value of the contributed capital amount
recorded in accounting books or the value of the capital amount at the time of redemption.
+ Transfer expenses are actual expenses directly related to the transfer such as expense for
carrying out legal procedures necessary for the transfer; charges and fees paid for carrying
out transfer procedures; expenses for transaction, negotiation and signing of transfer
contracts; and other expenses.
LO 6-6: Define incomes from capital transfer, security transfer and real estate transfer.
INCOMES FROM SECURITY TRANSFER
▪ An enterprise’s income from securities transfer is income earned from the transfer of
its stocks, bonds, fund certificates and securities of other kinds under regulations.
▪ Tax bases: CIT payable = Taxed incomes × CIT rate (20%)
Taxed
incomes
=
Securities
selling price
-
Purchasing price of the
transferred securities
-
Transfer
expenses
+ For listed securities, securities selling price shall be the order-matching price or agreed price
announced by the stock exchange or securities trading center; For unlisted securities,
securities selling price is the transfer price indicated in the transfer contract.
+ Purchasing price of the transferred securities can be the order-matching price or agreed price,
or the price of successful bid issued by the share-auctioning organization or the transfer price
indicated in the transfer contract.
+ Transfer expenses are expenses for carrying out legal procedures necessary for the transfer;
charges and fees paid for carrying out transfer procedures, securities depository charge,
securities entrustment charge, expenses for transaction, negotiation and signing of transfer
contracts; and other expenses.
INCOMES FROM REAL ESTATE TRANSFER
▪ Incomes from real estate transfer include:
+ income from the transfer of land use rights, or land lease right (including also
the transfer of projects associated with the transfer of land use rights or land
lease right in accordance with law);
+ income from the sublease of land of real estate enterprises in accordance with
the land law regardless of whether there is an infrastructure facility or
architectural work attached to land;
+ income from the transfer of houses or construction works attached to land,
including their appurtenances, in case the value of such appurtenances is
inseparable upon the transfer, regardless of whether land use rights or land
lease right are/is transferred;
+ and income from the transfer of house ownership or use right.
INCOMES FROM REAL ESTATE TRANSFER
▪ Tax bases: CIT payable = Taxed incomes × CIT rate (20%)
Taxable
incomes
= Revenues -
Cost of transferred
real estate
-
Deductible
expenses
Taxed incomes = Taxable incomes -
Losses from real
estate transfer
▪ Revenues:
+ Revenues from real estate transfer shall be determined based on the actual transfer price
under the real estate transfer or purchase and sale contract in accordance with law (including
surcharges and extra fees, if any).
+ If the transfer price of land use rights is lower than the land price prescribed by the provincial-
level People’s Committee, the price prescribed by the People’s Committee at the time of
signing the contract shall be applied.
+ Time of determining revenues is the time sellers hands over the real estate to purchasers.
INCOMES FROM REAL ESTATE TRANSFER (CONT.)
+ Deductible expenses for determining taxable
income from real estate transfer in a tax period
must correspond to revenues for calculating
taxable income and satisfy the conditions for
being accounted as deductible expenses or as
non-deductible expenses.
+ Cost of the transferred land, determined
according to the land use right origin.
+ Expense for land damage compensation.
+ Expense for crop damage compensation.
+ Compensation, support and resettlement
expenses and expenses for organization of
compensation, support and resettlement in
accordance with law.
+ Charges and fees related to the grant
of land use rights as provided by law.
+ Expense for soil improvement and
ground leveling.
+ Expense for the construction of
infrastructure, such as roads, power
lines, water supply and drainage
systems, post and
telecommunications facilities, etc.
+ Value of infrastructure facilities and
architectural works on land.
+ Other expenses related to the
transferred real estate.
▪ Cost of transferred real estate and deductible expenses
TAX DECLARATION AND PAYMENT
▪ Enterprises are required to make quarterly provisional CIT payments based on estimates. If
the provisional quarterly CIT payments account for less than 80% of the final CIT liability,
any shortfall in excess of 20% is subject to late payment interest (currently as high as 18%
per annum), applying from the deadline for payment of the Quarter 4 CIT liability.
▪ Final CIT returns (form 03/TNDN) are filed annually. The annual CIT return must be filed
and submitted not later than 90 days from the fiscal year end. The outstanding tax payable
must be paid at the same time.
▪ Where a taxpayer has a dependent accounting unit (e.g. branch) in a different province, a
single CIT return is required. However, manufacturing companies are required to allocate
tax payments to the various provincial tax authorities in the locations where they have
dependent manufacturing establishments. The basis for allocation is the proportion of
expenditure incurred by each manufacturing establishment over the total expenditure of
the company.
▪ The standard tax year is the calendar year. Companies are required to notify the tax
authorities in cases where they use a tax year (i.e. fiscal year) other than the calendar year.
A BIG EXAMPLE
I- SALES
1. Exported 20,000 units B, FOB price at the
border gate of Vietnam 52,000 VND/unit.
2. Sold to HHA Company 25,000 units B,
selling price excluding VAT of 50,000
VND/unit.
3. Sold to EIC Company 20,000 B, the VAT-
exclusive price of 49,000 VND/unit.
However, until December 31, EIC Company
exported only 18,000 units B.
4. Delivered to its agent 20,000 units B, the
agent sells at the fixed prices of 52,000
VND/unit exclusive of VAT; commission for
agent is 5% of the selling price exclusive of
VAT.
II- PURCHASES
5. Direct materials for production: 1,100M.
6. Fixed asset depreciation cost for
production of 440M including 40M of
financial lease fixed assets and for
administration and sales of 90M.
7. Salary expenses for production 480M
and administration and sales of 230M.
8. Paid mandatory insurances at 34.5% on
the salary of which 24% was ABC
expenses.
9. Provisions for major repair of fixed
assets used for production at 80M,
however, the actual expenses in the
year of 78M.
Accounting data of ABC Company producing only one product B in 2018 are as follows:
A BIG EXAMPLE (CONT.)
10. Paid commission to agents based on the
number of products sold.
11. Expenditures to support people in floods
of 18M.
12. Selling expenses, license fees and land
and housing tax: 24M.
13. Expenditure for construction of the
factory 200M. The project was completed
at the end of 2018 and put into use in the
beginning of 2019.
14. Other reasonable expenses including
production: 510M and administration and
sales: 260M.
Required: Determine CIT payable by ABC in
2018.
Additional data:
+ The company has adequate invoices and
vouchers for all expenses.
+ In 2018 ABC produced 100,000 units B;
beginning finished goods: 1.000 units
with the cost of 27,500 VND/unit.
Product B is not subject to excise tax.
+ ABC applied FIFO method.
+ By the end of 31 Dec 2018, the agent sold
90% of the delivered product B and
returned the remainder to Company ABC.
+ Export tax rate of 0%; CIT rate of 20%.
+ Cost of work in process at the beginning
and the end of the year is not significant.
Các file đính kèm theo tài liệu này:
- giao_trinh_taxation_chapter_6_corporate_income_tax_cit.pdf