Notes when making the final settlement of corporate income tax

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In order to create favourable conditions for enterprises, the current corporate income tax policies have many incentives. Photo: T.Linh.

According to the current Law, the time for determination of turnover for calculation of taxable income is determined as follows: For sale activities, it is the time of transfer of the right to own or use goods for the buyer.

For service provision activities, it is the time of completion of the provision of services or the completion of part of the service provision for the purchasers, except for cases specified in Clause 3, Article 5 of Circular No. 78/2014 / TT -BTC, and Clause 1, Article 6 of Circular 119/2014 / TT-BTC.

In terms of turnover for calculating taxable income, in some cases it is determined as follows: For goods and services sold by installment payment, deferred payment is the sale of goods or services with a one-off payment, excluding interest on installments and interest on deferred payment. Accordingly, goods and services used for exchange and internal consumption (excluding goods and services used for continued production and business processes of enterprises) shall be determined according to the selling prices of products, the same or similar goods or services on the market at the time of exchange (Clause 1, Article 6 of Circular 119/2014 / TT-BTC).

For asset leasing activities, the taxable turnover is the amount paid in each period under the lease contract. In the case where the payment is made in advance for many years, the turnover for calculation of taxable income shall be allocated to the number of years paid in advance, or shall be determined according to the lump-sum turnover. For construction and installation activities, the value of works is the value of the construction items or the value of the volume of works to be constructed, installed and tested.

Mr. Nguyen Quy Trung, Deputy Director of Policy Department, General Department of Taxation also noted about corporate income tax policy, especially when it was included in deductible expenses. According to Mr. Trung, the current Law stipulates that the spending in excess of VND 3 million / month / person for deduction of voluntary retirement, voluntary retirement insurance and life insurance for laborers shall not be counted. The cost is deducted when determining the income subject to corporate income tax.

Besides, in order to create favorable conditions for enterprises, the current corporate income tax policy has many incentives. Many previous costs are not deducted, but are now deducted. Specifically, the current fixed asset depreciation expense, apart from fixed asset depreciation expenses as stipulated in Circular No. 78/2014 / TT-BTC, shall be supplemented from the fixed assets of businesses serving employees and organizing vocational education activities including: Libraries, kindergartens, sports facilities and qualified furniture installed in the works serving the laborers working at the enterprise; material facilities, machines and equipment which are fixed assets used to organize professional education activities.

On the payment of property rent of individuals, the current provisions of the Law shall be included in deductible expenses, when calculating tax on the payment of property rent of individuals with complete dossiers and vouchers as follows: In the case where an enterprise rents assets of an individual, the file for the deductible expenses shall be based on the lease contract and the document on payment of the rent.

In the case where an enterprise leases an individual's property but the contract contains an agreement between the enterprise paying tax on behalf of the individual, the dossier for determining the deductible expenses shall be based on the lease contract or the lease payment voucher and tax receipts on behalf of individuals.

In the case where an enterprise leases assets of individuals but the contract does not include tax (Value Added Tax and Personal Income Tax) and the enterprise pays taxes on behalf of the individual, the expenses shall be based on total amount of the property lease including the tax paid on behalf of the individuals.

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Expenditures on salaries, wages and bonuses for laborers, policies on amendment and supplementation of a number of contents are regulated as follows: removing the restrictions on expenses for purchasing life insurance for laborers. Supplementing the provisions on cases where Vietnamese enterprises sign contracts with foreign enterprises, clearly stating that Vietnamese enterprises must bear expenses on accommodation for foreign specialists while working in Vietnam. The rent paid to experts by Vietnamese enterprises shall be included in the deductible expenses when determining the income subject to corporate income tax.