Chương 2 Nghị định 218/2013/NĐ-CP: Căn cứ và phương pháp tính thuế

Chapter 2.

GROUNDS AND METHOD OF TAX CALCULATION

Article 5. Grounds for tax calculation

The grounds for tax calculation are the taxable income in the period and tax rate;

The tax period shall comply with the provisions in Article 5 of the Law on corporate income tax and regulations of law on tax management;

Enterprises may choose the tax period by solar calendar year or fiscal year but must inform the tax authority before implementation;

Article 6. Determination of taxable income

1. The taxable income in the tax period is determined as follows:

2. The accessable income is determined as follows:

Enterprises having many business activities, then the accessable income from business and production activities is the total income of all business activities. Where there is a loss of business activity, the loss shall be offset from the accessable income of income-generating business activities selected by enterprises. The remaining income after offset shall apply the tax rate of corporate income tax of business activities still generating income.

Income from the transfer of real estate, transfer of investment project, transfer of right to participate in investment projects, transfer of mineral exploration, mining and processing rights must be determined separately for tax declaration. Where the transfer of right to participate in investment projects, transfer of investment projects (except for projects of mineral exploration and mining) or transfer of real estate has losses, such losses are offset against profits of the production business activities in a tax period. Where the enterprises perform the dissolution procedures selling real estate as fixed assets, the income from the transfer of real estate (if any) shall be offset against income from production and business activities of enterprises.

3. The determination of assessable income for certain business and production activities is regulated as follows:

a) Income from capital transfer (excluding income from securities transfer specified at Point b of this Clause) shall be determined by the total amount collected under the transfer contract minus (-) the purchase price of the capital transferred, minus (-) expenses directly related to the transfer.

Where enterprises transferring capital do not receive cash but assets or other material benefits (such as stocks or fund certificates) with income generated, they must be subject to the corporate income tax;

b) Income from transfer of securities is determined by the sale price minus (-) the purchase price of securities transferred, minus (-) the expense directly related to the transfer of securities.

Where enterprises issue stocks, the difference between the issue price and the face value without corporate income tax;

Where enterprises conduct the separation, splitting, consolidation or merger with stock swap done at the time of separation, splitting, consolidation or merger, if the income is generated, this income must be subject to corporate income tax.

Where enterprises transferring securities do not receive cash but assets or other material benefits (such as stocks and fund certificates) with income generated, they must be subject to the corporate income tax;

c) Income from intellectual property rights or technology transfer is determined by the total amount collected minus (-) prime cost or expenses to create intellectual property rights or technology transfer, minus (-) the cost of maintenance, upgrading and development of intellectual property rights, technology transfer and other expenses deducted;

d) Income from lease of assets is determined by the leasing income minus (-) depreciation deductions, costs of maintenance and repair of assets, costs of lease of assets for sub-leasing (if any) and other costs deducted relating to the lease of assets;

dd) Income from transfer or disposal of assets (excluding real estate) by the proceeds from the transfer or disposal of assets minus (-) the residual value of the assets recorded on the accounting books at the time of transfer or disposal and the costs deducted relating to the transfer or disposal of assets;

e) Income from the trading of foreign currency by the total proceeds from the trading of foreign currency minus (-) the prime cost of amount of foreign currency sold;

g) Differences from the revaluation of assets or transfer upon separation, splitting, consolidation, merger, dissolution, conversion of business type, conversion of owners contributing capital is the difference between the re-evaluated value of assets with the remaining value of thoses assets recorded on the accounting books before the revaluation of assets.

Increasing or decreasing differences resulting from the revaluation of fixed assets upon capital contribution, or transferred assets upon separation, splitting, consolidation, merger or transformation of enterprises, assets being the land use right value upon capital contribution to investment projects on building houses or infrastructure for sale shall be accounted as other incomes in a tax period; particularly, the difference resulting from the revaluation of land use right value used for capital contribution in which the capital contribution receiving party is not allowed to depreciate, shall be gradually accounted as other incomes for a maximum of 10 years from the year of capital contribution by assets;

h) For business cooperation contract (BCC) with division of profits after tax, the income is determined by total revenue under BCC minus (-) the total costs related to the revenue generation of BCC .

The Ministry of Finance specifically guides the determination of revenue and costs of BBC with division of profits after tax;

i) The income received from business and production activities abroad is the total revenue received before tax;

4. Income from exploration and extraction of oil and gas is determined by each oil and gas contract;

Article 7. Determination of loss and loss transfer

1. Losses incurred in a tax period is the negative (-) difference of taxable income excluding losses carried forward from the previous years shall be determined by the formula specified in Clause 1, Article 6 of this Decree.

2. Enterprises with loss shall carry their losses forward to the subsequent year and are deducted from taxable income. The time permitted for loss transfer is continuously calculated but not exceeding 5 years from the year following the year with loss incurred.

3. Loss from transfer of real estate, investment projects or right to participate in investment projects (except for project of mineral exploration and mining) after being offset with the assessable income of these activities or loss offset under the provisions of Clause 2, Article 6 of this Decree. If losses remain and enterprises suffer from losses from the transfer of mineral exploration and mining rights, they may carry their losses forward to the subsequent year into the taxable income of those activities.The time permitted for loss transfer is continuously calculated but not exceeding 5 years from the year following the year with loss incurred.

Article 8. Revenue

The revenue to calculate assessable income shall comply with the provisions in Article 8 of the Law on corporate income tax;

1. The revenue to calculate the taxable income is the total sale, processing and services supply proceeds including price subsidies, surcharges or extra enjoyed by enterprises, irrespective of whether or not the proceeds have been collected or not.

For enterprises declaring and paying value added tax by the method of tax deduction, the revenue to calculate the corporate income tax is the revenue without value added tax. For enterprises declaring and paying value added tax by the direct method on the added value, the revenue to calculate the corporate income tax includes the value added tax;

2. The time to determine the revenue to calculate the taxable income for goods to be sold outis the time to transfer the ownership or the right to use of goods to the purchasers;

The time to determine the revenue to calculate the assessable income for services is the time to finish the services supply to the purchasers or the time to issue invoice of services supply;

3. The revenue to calculate the assessable income for several cases specified as follows:

a) For goods sold by installment payment determined by the selling price paid once, not including payment of interest by installments or deferred payment;

b) The goods or services used to exchange or internally consume (excluding the goods and services used to continue the process of business and production of enterprises) are determined by the selling price of products, goods or services of the same type or similar at the time of exchange or internal consumption;

c) For goods processing activities are the proceeds from the processing activities including wages, cost of fuel, power, auxiliary materials and other costs for the processing of goods;

d) For asset leasing activities, golf course business activities or other services business services that customers have prepaid for many years as the amount the asset lessee or services purchaser has paid by each period under contract. Where the asset lessee or services purchaser has prepaid for many years, the revenue to calculate the assessable income is allocated to the number of year prepaid or determined by the lump sum revenue. Where the enterprises are enjoying the tax incentives, the determination of incentive tax should be based on the total income tax the enterprise should pay of the number of year prepaid divided (:) by the number of year prepaid;

dd) For credit activities or financial leasing activities are loan interest and revenue from financial leasing receivable generating in the tax period;

e) For the transportation is the total revenue of freight of passenger, goods or luggage generated in the tax period;

g) For electricity and clean water is the amount specified on VAT invoice;

h) For business of insurance and reinsurance is the amount of original premium receivable; agent services fees (including damage assessment, claim settlement, asking for claim from a third party, settlement of goods compensated by 100%); reinsurance costs; collection of reinsurance commission and other revenues on insurance business minus (-) the reimbursemtns or reduction of premium, reinsurance costs, reimbursements or reduction of retroceded reinsurance commissions.

In case of co-insurance, the revenue to calculate the assessable income is the proceeds of original insurance allocated n proportion to the co-insurance excluding VAT;

For insurance contract agreed to pay by each period, the revenue to calculate the assessable income is the amount receivable generated in each period;

i) For construction and installation activities is the value of works, works items or volume of construction and installation works to be accepted;

In case of construction and installation without the supply of raw materials, machinery and equipment, the taxable revenue does not include the value of raw materials, machinery and equipment;

k) For the business activities in the form of business cooperation contract without legal entity:

- Where the parties involved in the business cooperation contract divide the business result by revenue from sales of goods and services, then the revenue to calculate tax is the revenue of each party divided under contract;

- Where the parties involved in the business cooperation contract divide the business result by revenue after tax, the revenue to determine the assessable income is the proceeds from the sale of goods or services of contract;

l) For business of casino, games with prize or betting business is the proceeds from these activities including excise tax minus (-) amount paid for prize to customers;

m) For the securities business are the revenues from brokerage services, securities dealing, securities underwriting, securities investment consulting, investment fund management, issue of fund certificate and services of market organization and other securities services in accordance with law;

n) For the search, exploration and extraction of oil and gas is the total revenue from sale of oil and gas under fair transaction contract in the tax period;

o) For derivative financial services are the proceeds from the provision of derivative financial services performed during the tax period;

The Ministry of Finance specifically guides the provisions in this Article and for a number of particular cases.

Article 9. Expenditures deducted and not deducted upon determination of assessable income

1. Except for the provisions specified in Clause 2 of this Article, enterprises shall be deducted from all expenditures if meeting the following conditions:

a) The actual expenses incurred in relation to the business and production activities of enterprises include the following expenditures:

- Expenditures for implementation of duties of national defence education and security, traning, activities of militia forces and other duties of national defence and security as prescribed by law, the expenditures for operation of Party organizations and social political organizations in enterprises;

- The actual expenditures for activities on HIV / AIDS prevention at enterprises’ workplace, including expenses for training enterprises’ staff of HIV / AIDS prevention, expenses for organization of communication for HIV / AIDS prevention for employees, expenses for consultation, examination and HIV testing and expenses for supporting HIV sufferers who are enterprises’ employees;

b) Expenditures with adequate invoices and documents as prescribed by law;

For the cases: Purchase of goods which are agricultural, forestry and aqua products directly caught and sold out; buying handmade products made ​​of jute, sedge, bamboo, rattan, straw, coconut shell, internal coconut shell or materials used from agricultural products of handicraft producers directly selling, buying soil, rocks, sand, and gravel of family households and individuals exploiting by themselves directly selling, buying scrap from collectors, buying furniture and property from family households and individuals directly selling and the purchase services of family households and individuals without business must have voucher paid to the seller and list of purchase of goods or services which the enterprises’ legal representatives or authorized persons signs and assume the responsibility.

c) For individual invoice of purchase of goods and services with value from twenty million dong or more, there must be voucher of non-cash payment, except for enterprises’ expenditures for implementing the duties of national defense and security, activities of HIV/AIDS prevention at workplace, support of activities of Party or social political organizations in enterprises specified at Point a, Clause 1 of this Article; for the purchase of goods and services made with the List specified at Point b, Clause 1 of this Article;

The Ministry of Finance specifically guides the payment under contract when the time of payment is different from the time of expense record as prescribed and other expenditures without non-cash payment voucher;

2. The expenditures not deducted upon determination of assessable income shall comply with the provisions in Clause 2, Article 9 of the Law on corporate income tax and Clause 5, Article 1 of the Law amending and supplementing a number of articles of the Law on corporate income tax. A number of cases where expenditures are not deducted are specified as follows:

a) The expenditures not satisfying the conditions specified in Clause 1 of this Article, except for the value of damage due to natural disaster, epidemics, fire and other unforeseen circumstances are not compensated;

The value of losses due to natural disasters, epidemics, fires and other unforeseen circumstances without compensation is determined by the total loss value minus (-) the value the insurers or other individuals and organizations must compensate as prescribed by law;

b) The excess cost of business management allocated by the foreign enterprises to the permanent establishment in Vietnam is calculated by the following formula:

c) The expenditure exceeds as prescribed by law on provision appropriation;

d) The depreciation of fixed assets not in accordance with regulations of the Minitry of Finance includes: depreciation for car with 09 seats or less (except for automobiles used for business of passenger transport, tourism and hotel) in proportion to the prime cost exceeding 1.6 billion dong/car; depreciation of civil aircraft or yachts not used for business of transport of passengers and goods or business of tourism and hotel;

dd) The accruals on expenses inconsistently with regulations of law;

The accruals included in the expenses deducted are: accruals of periodic overhaul of fixed assets, of operations with revenue accounted but the obligations must be performed under contract including asset leasing prepaid for many years but the lessor has accounted the whole into the revenue of money collecting year and other accruals as prescribed by the Ministry of Finance;

e) Payments of interest from loans corresponding to the missing charter capital, under the capital contribution schedule stated in the enterprise’s charter capital; interest from loan has been recoded into the value of assets; interest from loans to implement contracts for exploration and extraction of oil and gas;

g) Expenditure for advertising, marketing, promotion, brokerage commission (excluding insurance commission as prescribed by law on insurance business, commission for sales agent at right price, commission paid to the distributor of multi-level marketing enterprises); expenditures for reception, meeting, conference; expenditures for support of costs directly related to the business and production activities exceeding 15% total expenditure deducted.

The total expenditure deducted excluding the expenditures specified above; for commercial operation excluding

Expenditures subject to expense control at this Point include donation or offer to customers;

h) The expenses permitted for recovery exceed the rate specified in oil and gas contract approved. Where the oil and gas contract does not provide for expense recovery rate, the expense exceeding more than 35% shall not be included in the expenses deducted. The expenses not included in the recovered expenses include:

- The expenditures specified in Clause 2, Article 9 of the Law on corporate income tax and Point 2, Clause 5, Article 1 of the Law amending and supplementing a number of articles of the Law on corporate income tax;

- Costs incurred prior to the effect of the oil and gas contract, unless otherwise agreed in oil and gas contract or by decision of the Prime Minister;

- Other types of petroleum commissions and expenditure are not included in the recovery expenses under contract;

- Interest expenses for the investment in search, exploration, development of mire and oil and gas extraction;

- Fines and compensation for damage;

i) The input value added tax deducted and the input value added tax of value of car with 9 seats or less exceeding 1.6 billion dong shall not be deducted . The corporate income tax and taxes, fees, charges and other revenues are not included in the expenses as prescribed by the Ministry of Finance;

k) The expenditures not corresponding to the taxable income, except for some special cases under the guidance of the Ministry of Finance;

l) Foreign exchange differences from revaluation of monetary items with foreign currency origin at the end of tax period, except for the foreign exchange differences from revaluation of debts payable with with foreign currency origin at the end of tax period and the foreign exchange differences during the basic construction investment to form the fixed assets of enterprises newly established but theses assets have not been put into business and production shall comply with guidance of the Ministry of Finance;

For debts receivables, loan with foreign currency generated in the period, the foreign exchange difference included in the expenses deducted is the difference between the exchange rate at the time of debt recovery or loan recovery with the exchange rate at the time of recording the debts receivable or initial loan;

m) Salaries and wages of private business owners , owners of one-member limited liability companies ( owned by an individual ) , remuneration paid to a founding member of enterprise but these are not directly involved in administration of production and business; salaries , wages and other expenses accounted to be paid to workers but in fact not paid or without invoice or voucher as prescribed by law; expenditures for bonuses or buying life insurance for employees without specified eligibility for enjoyment in one of the following documents: labor contract, collective labor agreement; financial Regulation of Company , Corporation or Group; reward Regulation specified by Chairman of the Board, General Director and Director based on the financial regulations of Company or Corporation; expenditures for salaries, wages and allowances payable to employees but the expired time limit for submission of documents for annual tax settlement actually not paid yet unless enterprises have appropriate provision fund to supplement the salary fund of the subsequent year to ensure the payment of salary is not interrupted or used for other purposes. The annual rate of provision is decided by enterprises but not exceeding 17% of salary fund implemented (as the total salary actually paid of that settlement year to the time limit for submission of settlement document as prescribed, excluding the amount of appropriation of salary provision fund of previous year spent in the tax settlement year). Where in previous year, the enterprises have appropriated their salary provision fund but after 06 months, from the end day of financial year, the enterprises have not used or have used up their salary provision fund, the enterprises must record the reduction of costs of the following year;

n) Grants, except for grants for education, health care, scientific research, disaster recovery, building of unity houses, gratitude houses and houses for the poor, the subjects enjoyed preferential treatment policy as prescribed by law, the grants under the State program for localities in areas having extremely difficiculty socio-economic conditions;

Organizations receiving the grants for scientific research specified at this Point is technological and scientific organizations established and operating under the Science and Technology Law performing their scientific and technological duties as prescribed by law on science and technology;

o) Expenditures in excess of 01 million VND / month / person for: Deduction for voluntary pension fund, purchase of voluntary pension insurance, life insurance for employees; the excess of rate specified by law on social insurance or the health insurance appropriated for funds of social security (social insurance, compulsory supplementary pension insurance), medical insurance fund and unemployment insurance fund for employees);

Expenditures appropriated for the voluntary pension fund, social security fund, purchase of voluntary pension insurance, life insurance for employees are included in the expenses deducted in addition to failure to exceed the rate specified in this Clause, the conditions for enjoyment and rate of enjoyment in one of the following documents: labor contract, collective labor agreement; financial Regulation of company, corporation or group; reward Regulation specified by Chairman of the Board, General Director and Director based on the financial regulations of Company or Corporation

p) Expenditures of business activities: banking, insurance, lottery, secutiries, and stock and some specific business activities as prescribed by the Ministry of Finance;

q) Cash for late payment of tax under the provisions of the Law on Tax Administration;

r) Expenditures directly related to the issue of stock (except for stocks classified as liabilities payable) and dividend of stocks (except for dividend of stock classified as liabilities payable), trading of fund stocks and other expenditures directly related to the increase or reduction of equity of enterprise;

The Ministry of Finance specifically guides the expenses deducted or not deducted under the provisions of this Article;

Article 10. Tax rate

The tax rate of corporate income tax shall comply with the provisions in Clause 6, Article 1 of the Law amending and supplementing a number of articles of the Law on corporate income tax;

1. The tax rate of corporate income tax is 22%, except for case where the enterprise is subject to the tax rate of 20% and the tax rate from 32% to 50% specified in Clause 2 and 3 of this Article and subject entitled to incentives of tax rate specified in Article 15 and 16 of this Decree;

From January 01, 2016, the persons subject to the tax rate of 22% specified in this Clause shall be subject to the tax rate of 20%.

2. Enterprises established and operating under the law of Vietnam, including cooperatives, non-business units operating the production and business of goods and services with the total annual revenue not exceeding 20 billion dong are entitled to the tax rate of 20%;

The total annual revenue as a basis for determination of enterprise subject to the tax rate of 20% specified in this Clause is the enterprise’s total revenue of sale of goods and services supply of the preceding year.

3. The tax rate of corporate income tax for the activities of search, exploration and extraction of oil and gas and other rare natural resources in Vietnam from 32% to 50%. For the search, exploration and extraction of oil and gas, based on the location and conditions for extraction and mine reserve, the Prime Minister shall decide on the tax rate consistently with each project and business establishment at the request of the Minister of Finance. For the platinum, gold, silver, tin, wolfram, antimony, precious stones, rare earth mines, the tax rate is 50%. Where the mines having an assigned area 70% or more in the areas with extremely difficult socio-economic conditions in the list of areas entitled to the incentives of coporate income tax issued together with this Decree, these areas shall be subject to the tax rate of corporate income tax rate of 40%.

Article 11. Method of tax calculation

1. The income tax enterprises shall pay in the tax period is equal to the taxable income multiplied (x) at the tax rate. Where the enterprises have paid their income tax for income generated abroad, they shall be deducted from the amount of tax paid but not exceeding the maximum amount of tax paid by the enterprises as prescribed of the Law on corporate income tax;

2. The income tax to be paid by the enterprises for transfer of real estate is equal to the income from the transfer of real estate multiplied (x) at the tax rate of 22%. From January 01, 2016, this tax rate is 20%;

3. For enterprises specified at Point c and d, Clause 2, Article 2 of the Law on corporate income tax, the income tax payable by enterprises is a percentage (%) of the revenue from sale of goods and services in Vietnam. To be specific:

a) Services: 50%, as for services of management of restaurant, hotel and casino: 10%; in case of supply of services associated with goods, then the goods shall be calculated at the rate of 1% and 2% in case of failure to separate the value of goods with the value of services;

b) Providing and supplying goods in Vietnam in the form of in-country import/export or under international commercial terms (Incoterms): 1%

c) Royalty: 10%;

d) Lease of aircraft (including aircraft engines and spare parts) and vessel: 2%;

dd) Lease of drilling rigs, machinery, equipment, means of transport (except for provision of Point d of this Clause): 5%;

e) Loan interest: 5%;

g) Transfer of securities, reinsurance to abroad: 0.1%;

h) Derivative financial services: 2%

i) Construction, transportation and other activities: 2%;

4. For oil and gas extraction activities with regulations on accounting of revenue and expenses in foreign currency in contract, the taxable income and the amount of tax to be paid is determined in foreign currency’

5. Non-business units and other organizations that are not enterprises established and operating under the regulations of Vietnam’s law having their activities of goods and services with income subject to the corporate income tax and the income has been accounted by these units but the expenses and income of business activities are not determined, then the coporate income tax is declared and calculated by the rate% on the revenue of goods and services, specifically as follows:

a) For services (including interest from deposit and from loan): 5%. As for education, health, art performance, the tax rate specified at Point c of this Clause shall apply;

b) For goods business: 1%

c) For other activities: 2%

Article 12. Place of tax payment

1. Enterprises shall pay their tax at locality where their head offices are located. Where the enterprises have their production establishment of dependent accounting in provinces and centrally run cities different from locality where their their head offices are located, the amount of tax calculated shall be paid at the place of head office and place of production establishment;

The amount of income tax the enterprise shall pay in the provinces and centrally run cities where their production establishment of dependent accounting are located is determined by the amount of tax the enterprises shall pay in a period multipled (x) by the rate between the expenses incurred production establishment of dependent accounting with the enterprises’ total expenses.

The payment of tax specified in this Clause does not apply to works, works items or construction establishment of dependent accounting;

The decentralization, management and use of revenue on corporate income tax shall comply with the provisions of the Law on the State Budget.

2. The dependent accounting units or overall sector accounting enterprises having their income in addition to the main business activities shall pay tax in provinces or cities where there are those business activities;

3. The Ministry of Finance guides the place to pay tax specified in this Article;