Corporate Income Tax (CIT) guides for FIEs in Vietnam
What are the current regulations on CIT?
CIT Law 32, 2013 amended some key regulations in the CIT Law 14, 2008.
How is CIT computed and CIT rate?
CIT = Taxable Income * Tax rate
Taxable income in a period shall be determined as follows:
|TI = TT – DE + OTI||TI – Taxable income|
|TT – Taxable turnover|
|DE – Deductible expenses|
|OTI – Other Taxable Income|
The tax rate varies, but the most common one applicable to FIEs is 20% [currently].
FIEs may be entitled to preferential tax rates (i.e. 50%, 20%, or 10% of the normal rate) and tax holidays which would be stated in the Investment Certificate if certain investment conditions are satisfied (Decree 218, 2013).
Which expenses are deductible for CIT purposes?
Generally, an expense that is not non-deductible as stipulated by the Law, reasonable and incurred in the course of generating income, and supported by proper documents will be deductible.
What are the reporting compliance requirements for CIT?
It is required a provisional CIT pay on a quarterly basis and finalization at the end of the year.
Quarterly, within 30 days from the end of each quarter, enterprises estimate and pay interim CIT without submission of CIT declaration.
At year-end, enterprises must finalize the annual tax payable with the tax authorities. The tax filings must be prepared and submitted within 90 days from the end of the calendar or tax year. The tax filings include:
- Audited financial statements;
- Annual CIT finalization report; and
All the above reports must be prepared in compliance with designated forms issued by the MOF.
Law and regulations references
CIT Law 14, 2008 – Law 14/2008/QH12 dated 3 June 2008
CIT Law 32, 2013 – Law 32/2013/QH13 dated 19 June 2013 on CIT
Decree 218, 2013 – Decree 218/2013/ND-CP dated 26 December 2013 implementation of CIT regulations
Circular 151/2014/TT-BTC dated 10 October 2014 guiding the implementation of CIT regulations
Circular 156/2013/TT-BTC dated 6 November 2013 guiding the implementation of tax management law and Decree 83/2013/ND-CP dated 22 July 2013 on tax management