March 27, 2019 07:56

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Amendments in making the corporate income tax finalization in 2018

09:55 | 10/03/2019

VCN- From March 2019, enterprises in the whole country must conduct corporate income tax finalization. In order to prevent unnecessary errors and make the finalization in a timely fashion, enterprises must notice regulations on dossier, revenue as well as  deductible expenses.

luu y nhung thay doi khi thuc hien quyet toan thue thu nhap doanh nghiep nam 2018 Hanoi Tax Department put a lot of effort into tax finalization in 2018
luu y nhung thay doi khi thuc hien quyet toan thue thu nhap doanh nghiep nam 2018 Delay in the CIT finalization: Tax records of enterprises will be "marked"
luu y nhung thay doi khi thuc hien quyet toan thue thu nhap doanh nghiep nam 2018 Enterprises have proactively finalized tax report soon
luu y nhung thay doi khi thuc hien quyet toan thue thu nhap doanh nghiep nam 2018
Preparing documents for corporate income tax finalization plays an important role in the tax finalization of the enterprise. Photo: T.L

Sufficiently prepare dossier

Preparing documents for corporate income tax (CIT) finalization plays an important role in the tax finalization. Therefore, enterprises should note that the CIT finalization dossier shall be made according to the CIT finalization form No. 03/TNDN (issued together with Circular 151/2014/TT-BTC). The dossier must also include annual financial statements or financial statements at the period of the decision on the enterprise's division, consolidation, merger, conversion of the enterprise type, dissolution and termination of operation.

In addition, there is one or several appendices must be attached to the declaration (depending on the actual situation of taxpayers) such as: Appendix of production and business results according to form No.03-1A/TNDN (for taxpayers in manufacturing, trade and service sectors), form No.03-1B/TNDN (for taxpayers that are banks, credit institutions), form No.03-1C/ TNDN (for taxpayers that are securities companies and securities investment fund management companies) issued together with Circular No.156/2013/TT-BTC; Appendix of loss transfer according to form No. 03-2A/TNDN (transfer of losses from production and business activities), form No.03-2B/TNDN (transfer of losses from land use right and land lease right) issued together with the Circular No.156/2013/TT-BTC; Appendix 03-4/TNDN for CIT paid abroad is deducted in the tax period (issued together with Circular No. 156/2013/TT-BTC); Appendix 03-5/TNDN for CIT for real estate transfer activities (issued together with Circular No. 151/2014/TT-BTC).

In addition, forms No. 01, 02, 03, 04 (if any) are information about the associated linkage and associated transactions (issued together with Decree No. 20/2017/ND-CP). Details for making forms 01, 02, 03 and 04 shall comply with the guidance in Appendix I, II, III of Circular No.47/2017/TT-BTC dated 28 April 2017 of the Ministry of Finance guiding the implementation of a number of articles of Decree 20/2017/ND-CP on associated transactions.

The Tax authority also noted that if the enterprise has a foreign investment project, in addition to these dossiers, the enterprise must supplement the dossiers and documents under the guidance of the Ministry of Finance on CIT. For enterprises in associated transactions, when submitting CIT finalization reports, in addition to the required forms in the provisions of Circular No.156/2013/TT-BTC, Circular No.151/2014/TT-BTC, enterprises must submit the forms prescribed in Decree No. 20/2017/ND-CP of the Government on tax administration for enterprises in associated transactions.

Note on revenue

The time for determining revenue to calculate taxable income is determined as follows: for the goods sale activities, it is the time of transfer of ownership and use rights of goods to purchasers

For service provision activities, it is the time of completing the service provision or partially completing the service provision to the buyers, except for the cases specified in Clause 3, Article 5 of Circular 78/2014/TT-BTC , Clause 1, Article 6 of Circular 119/2014/ TT-BTC.

Revenue for calculating taxable income in some cases is determined as follows: For goods and services sold by installment or deferred payment method, it is revenue from lump-sum payment of selling goods and service excluding interest on installment or deferred payment.

For goods and services used for exchange and internal consumption (excluding goods and services used to continue the production and business process of enterprises), it is determined according to the selling prices of products, goods and services of the same or equivalent type on the market at the time of exchange (Clause 1, Article 6 of Circular 119/2014 / TT-BTC).

For asset leasing, it is the revenue that the lessee pays each period according to the lease contract. In cases where the lessee pays in advance for many years, the revenue for calculating taxable income shall be allocated for the number of years of advance payment or determined according to the lump-sum payment revenue.

For construction and installation activities, it is the value of the works, the value of the construction item or the accepted volume of construction and installation works.

Change regulations on deductible expenses

A noticeable change in the CIT finalization in 2018 is some amendments in Circular No.25/2018/TT-BTC guiding Decree No.146/2017/ND-CP on supplementing a number of regulations on deductible expenses when determining taxable income.

Specifically, according to principle, enterprises are allowed to deduct all expenses if they fully meet the conditions such as: actual expenses related to production and business activities of enterprises; expenses for vocational education activities; expenses for performing defense and security tasks of enterprises according to law provisions; Expenses according to invoices and documents as prescribed by the law. In addition, expenses according to invoice for buying goods and services valued at VND 20 million or more (the price included Value Added Tax), when paying, there must have non-cash payment invoice.

Enterprises should also pay attention to the adjustment of conditions for determining deductible expenses when determining taxable income on non-cash payment invoice for expenses according to invoice for buying goods and services valued at VND 20 million or more (Circular No.173/2016/TT-BTC of the Ministry of Finance amending and supplementing the first paragraph of clause 3 Article 15 of Circular No. 219/2013 / TT-BTC) taking effect from 15 December 2016. Accordingly, abolishing the provision that "bank payment vouchers to transfer money from the buyer's account to the seller's account must be an account registered or notified to the tax authority".

By Thuy Linh/Ngoc Loan