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blue-check “Other incomes” in 2020 shall be also entitled to a 30% reduction in EIT

Official letter No. 4858/CTHN-TTHT dated February 8th, 2021 of the Department of Taxation of Ha Noi city regarding determination of EIT reduced under Decree No. 114/2020/ND-CP
VietlawOnline

If enterprises are entitled to a 30% reduction in enterprise income tax (EIT) under Resolution No. 116/2020/QH14 and Decree No. 114/2020/ND-CP (their total revenue in 2020 does not exceed VND 200 billion), the tax reduction is also applied to amounts considered to be “other incomes” as regulated at Clause 3 Article 18 of the Law on Enterprise income tax No. 14/2008/QH12status2 (which has been amended, supplemented at Clause 12 Article 1 Law No. 32/2013/QH13 and Clause 1 Article 1 of Law No. 71/2014/QH13status2 )

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blue-check Conditions for EIT exemption, reduction for science and technology enterprises

Circular No. 03/2021/TT-BTC dated January 11th, 2021 of the Ministry of Finance providing guidelines on reduction in, exemption from enterprise income tax (EIT) for science and technology enterprises regulated at the Government's Decree No. 13/2019/ND-CP dated February 1st, 2019 on science and technology enterprises
VietlawOnline

This Circular provides for conditions for and rate of EIT exemption, reduction for science and technology enterprises. Read more

Accordingly, science and technology enterprises shall be entitled to EIT exemption, reduction only when they meet all conditions regulated at Article 2 of this Circular, in which it is required to obtain the science and technology enterprise Certificate and annual revenue from science and technology products must account for at least 30% of total revenue.

EIT shall be exempted for 4 years and reduced 50% for the next 9 years. The tax exemption, reduction duration shall be calculated consecutively from the day on which the science and technology Certificate is granted (point a, b Clause 1 Article 3).

However, it should note that during the tax exemption, reduction period, an enterprise that fails to meet the minimum ratio (30%) of revenue from science and technology products shall not be entitled to tax exemption, reduction in such year and it shall be subtracted from the duration of EIT incentives (point c Clause 1 Article 3).

If an independent according branch of a science and technology enterprise meets the conditions at Article 2 of this Circular, it shall be also eligible for EIT exemption, reduction (Clause 2 Article 1).

This Circular takes effect from March 1st, 2021.

To annul point 1 Section III of Joint Circular No. 06/2008/TTLT-BKHCN-BTC-BNVstatus2 dated June 18th, 2008; Clause 8, Clause 9 Article 1 of Joint Circular No. 17/2012/TTLT-BKHCN-BTC-BNV dated September 10th, 2012.

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blue-check 2020’s tax period according to fiscal year other than the Gregorian calendar is still entitled to tax reduction

Official letter No. 97746/CT-TTHT dated November 10th, 2020 of the Department of Taxation of Ha Noi city regarding determination of duration entitled to enterprise income tax (EIT) reduction.
VietlawOnline

The Department of Taxation of Ha Noi city assumes that enterprises applying 2020’s tax year according to fiscal year (other than the Gregorian calendar) are still entitled the tax reduction policy according to Resolution No. 116/2020/QH14 and Decree No. 114/2020/ND-CP . Read more

The condition for reduction in 2020’s EIT is that the projected total revenue in 2020 (regardless of fiscal year or the Gregorian calendar) of each enterprise is less than VND 200 billion (Article 2 of Decree No. 114/2020/ND-CP).

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blue-check Guidelines on application of the policy on 30% reduction in EIT payable in 2020

The Government’s Decree No. 114/2020/ND-CP dated September 25th, 2020 on detailing the implementation of Resolution No. 116/2020/QH14 of the National Assembly on reduction in enterprise income tax payable in 2020 by enterprises, cooperatives, non-business units and other organizations
VietlawOnline

This Decree regulates the application of the policy on 30% reduction in enterprise income tax (EIT) under Resolution No. 116/2020/QH14 of the National Assembly applicable to enterprises whose revenue in 2020 is less than VND 200 billion regardless forms of enterprises, scale Read more

Accordingly,

- The total revenue to be determined includes the whole sales amount, income from processing, charges for provision of services covering price subsidies, surcharges, extra amounts.

- For an enterprise newly established in 2020, its total revenue shall be calculated by multiplying (x) the average monthly revenue by 12.

- At the time of making quarterly EIT declaration (now, it remains quarter 3 and quarter 4), enterprises shall themselves determine their total revenue in 2020, if it does not exceed VND 200 billion, they shall temporarily pay 70% of tax payable quarterly.

- When making EIT accounting for the year 2020, if actual total revenue does not exceed VND 200 billion, it is allowable to adjust for being entitled to a 30% reduction in EIT for the whole year.

- Enterprises that are enjoying EIT incentives (if any) shall be also entitled to 30% reduction calculated on the remaining EIT payable (if any).

This Decree takes effect from the date on which Resolution No. 116/2020/QH14 takes effect (August 3rd, 2020) and inclusively applies to the EIT period of 2020.

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blue-check Regarding a 30% reduction in EIT payable in 2020

Official letter No. 77768/CT-TTHT dated August 21st, 2020 of the Department of Taxation of Ha Noi city regarding a 30% reduction in enterprise income tax (EIT) payable in 2020
VietlawOnline

According to Article 1 of Resolution No. 116/2020/QH14, enterprises whose total revenue in 2020 is less than VND 200 billion shall be entitled to a 30% reduction in EIT payable in 2020. Enterprises shall themselves determine tax amount to be reduced when they temporarily pay EIT and make EIT accounting at the end of the year. Read more

In addition, according to this Official letter, the 30% reduction in EIT payable in 2020 shall be determined in line with the tax period each enterprise applies, either the Gregorian calendar or fiscal year.

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blue-check [Merged] 2009 Law on Corporate Income Tax

Merged Document No. 14/VBHN-VPQH dated Jule 15th, 2020 of the Office of the National Assembly on Corporate Income Tax

This Circular is to merge the amendments, supplements of Law No. 32/2013/QH13 dated June 19th, 2013, Law No. 71/2014/QH13status2 dated November 26th, 2014 and Law on Investment No. 61/2020/QH14status2 dated June 17th, 2020 into the Law on Corporate Income Tax No. 14/2008/QH12status2 dated June 3rd, 2008.

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blue-check EIT payable in 2020 shall be reduced 30%

Resolution No. 116/2020/QH14 dated June 19th, 2020 of the National Assembly on reduction of enterprise income tax (EIT) payable in 2020 incurred by enterprises, cooperatives, non-business units and other organizations
VietlawOnline

The National Assembly decided to reduce 30% of EIT incurred by enterprises whose revenue in 2020 is less than VND 200 billion, regardless of small or large enterprises, domestic or foreign- invested enterprises. Read more

Enterprises shall themselves determine reduced tax amount in their quarterly tax periods of 2020 and make the tax accounting at the end of the year.

Because this Resolution takes effect from August 3rd, 2020, just EIT declaration from quarter 3/2020 shall be entitled to the 30% reduction – in other words, EIT shall be still paid 100% with regard to the EIT declaration of quarter 1 and quarter 2/2020.

This policy is only applied in 2020 exclusively.

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blue-check Regarding EIT incentives for interests on terms deposits

Official letter No. 33313/CT-TTHT dated May 11th, 2020 of the Department of Taxation of Ha Noi city regarding enterprise income tax (EIT) incentives for interests on term deposits
VietlawOnline

According to Clause 2 Article 10 of Circular No. 96/2015/TT-BTCstatus2 , with regard to an enterprise that is eligible for tax incentives in terms of geographical areas, its incomes entitled to incentives are all incomes generated in the geographical areas eligible for tax incentives, including interests on terms deposits at banks.

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blue-check Regarding EIT on post - tax profits from business cooperation

Official letter No. 1072/CT-TTHT dated January 9th, 2019 of the Department of Taxation of Ha Noi city regarding declaration and payment of enterprise income tax (EIT) on income from a business cooperation contract
VietlawOnline

According to Clause 6 Article 8 of Circular No. 78/2014/TT-BTCstatus2 , post-tax income divided from a business cooperation contract shall be exempt from EIT. Read more

However, expenditures relating to the performance of the business cooperation contract, depreciation of fixed assets of partnership activities shall not be deducted upon calculation of EIT of other business activities in a company.

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blue-check Regarding EIT incentives for agricultural enterprises applying high technologies

Official letter No. 4695/TCT-CS dated November 26th, 2018 of the General Department of Taxation regarding tax policies applicable to agricultural enterprises applying high technologies
VietlawOnline

According to Clause 1 Article 15 and Article 16 of Decree No. 218/2013/ND-CPstatus2 , agricultural enterprises applying high technologies shall be entitled to 4 - year tax exemption, 50% reduction of payable tax amount for 9 subsequent years. Read more

Incomes eligible for the incentives include incomes the activity of applying high technologies and incomes directly related to the activity of applying high technologies.

Such incentives shall be calculated from the year when the enterprise is granted the certificate of agricultural enterprises applying high technologies.

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