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The peak month of CIT finalization started. Photo: T.L

In terms of revenuesto calculate taxable corporate income, in accordance with the law on CIT, the revenues for calculation of taxable income is the total amount from the sale of goods, processingand servicesupply including entitledsubsidies and surcharges regardless of whether enterprises collect or not.

Enterprises need to identify revenues in the right time as defined in the Law on CIT for tax calculation and declaration in the right deadline. Specifically: For the sale of goods is the time of transfer of ownership and use rights to buyers; For the service supply is the time of completion of service supply or the partial completion of service supply to buyers; For air transport operation is the time of completion of transport service supply to buyers.

The Hanoi Tax Department noted the ways to identify the revenues in some specific cases as below:

For goods and services sold under the installment method and late payment method, the revenues are the amounts from the sale of goods and services paid at once excluding interestsfor installment payment and late payment.

For goods and services for exchange (excluding goods and services continuously used for production and business of enterprises), the revenues are defined according to the selling price of products, goods and service of same types or equivalent types in the market at the time of exchange.

For goods processing, the revenues from processing includes wages, costs for fuels, machines and auxiliary materials and other costs for goods processing

For enterprises which consign goods at consignment agents or enterprises which receive the consigned goods under the consignment agent contract to sell at the selling price including commission, the taxable income of the enterprises which consign goods is the total amount of sale of goods and the taxable income of the enterprises acting as consignment agents is the commission entitled in accordance with the consignment agent contract.

For assets lease, the income is the amount paidby the lessee for each period in accordance with the lease contract. If the lessee pays for many years in advanced, the enterprise can choose one of two methods to identify the taxable income as below: the taxable income is the amount from one year of asset lease which was determined by the prepaid amount divided by the number of prepaid years; or the total amount from asset lease of the total prepaid years.

For transport operations,the taxable income is the total revenues from carriage of passengers, goods and, baggage incurred during the tax period.

For credit operations of credit institutions and foreign bank branches, the taxable income is revenues from deposit interest, loans interest and revenues of financial lease incurred during the tax period which are accounted into the revenues under the current regulations on financial mechanisms of the credit institutions and foreign bank branches.

For construction and installation contracts: the taxable income is the value of construction work, construction work items or value of volume of construction work, installation and acceptance. For the case where there are supply contracts of materials, machines and equipment, taxable revenues are amounts earned from construction and installation including value of materials, machines and equipment.

For securities trading activity: the taxable income is the revenues from brokerage services, securities dealing, security issuance and guarantee, investment list management, financial consultancy and securities investment, investment fund management, fund certificate distribution, the market organization services and the other security services as prescribed by law.

For the case where the units share pre-taxprofits, the revenue used to define the pre-tax income is the amount of sale of goods and services under contract and for the case where the units share after-tax profits, the revenue is the amount of sale of goods and services under contract.

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Also according to the Hanoi Tax Department, during implementation of policies on CIT, they received many questions of enterprises on time of revenue determination for CIT calculation for deposit amount to ensure the implementation of service supply contracts. Under the guidance of the Hanoi Tax Department, when a company signs a contract of service supply with a customer, the company will receive the deposit from the customer to ensure contract implementation, if at the time of deposit receiving, the company has not supplied the services and the contract has been performed, the company shall not make revenue accounting to calculate the taxable corporate income. The time to determine the revenues for CIT calculation is the time of completion of service supply or partial completion of service supply to the customer.