Chương I Thông tư 151/2014/TT-BTC: Thuế thu nhập doanh nghiệp

Chapter I

CORPORATE INCOME TAX

Article 1. Point 2.2.e and Point 2.31 Clause 2 Article 6 of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance on providing guidance on implementation of Decree No. 218/2013/ND-CP dated December 26, 2013 of the Government on providing guidance of implementation of the Law on Corporate income (hereinafter referred to as Circular No. 78/2014/TT-BTC) shall be amended as follows:

“e) Depreciation for cars with fewer than 9 seats (except for cars used for passenger transport, tourism, or hotel operations; cars used for display and test drive by car dealers) in proportion to the portion of cost in excess of 1.6 billion dong per car; depreciation of fixed assets such as civil aircraft or yachts not used for transport of passengers or goods, tourism, or hotel operations.

Passenger cars with fewer than 9 seats used for passenger transport, tourism, or hotel operations are any cars registered under the names of enterprises which, in their business registration certificates, have registered one of these business lines: passenger transport, travel or hotel business, and have been licensed for doing business as prescribed in legal documents on transport, travel or hotel business.

Civil airplanes and yachts not used for cargo, passenger and tourist transport business are those of enterprises having registered and recorded the depreciation of fixed assets but not registered the passenger transport, travel or hotel business in their business registration certificates.

In case an enterprise transfers or liquidates cars with fewer than 9 seats, the residual value of such car equals (=) the actual cost of the fixed assets minus (-) the accumulated depreciation of the fixed assets according to regulations on management, use, and depreciation of fixed assets by the time of the car transfer or liquidation.

Example 8: Company A buys a car with fewer than 9 seats at a cost of VND 6 billion. It shall liquidate the car after making 1-year depreciation. The depreciation amount is VND 1 billion according to regulations on management, use, and depreciation of fixed assets (the depreciation period is 6 years according to regulations on fixed asset depreciation) The depreciation amount to be included in deductible expenses under tax policies is VND 1.6 billion/6 years = VND 267 million. Company A liquidates the car for VND 5 billion.

The income from the car liquidation = VND 5 billion - (VND 6 billion - VND 1 billion) = VND 0”

Expenditures that are not relevant to assessable revenue, excluding the expenses below:

- The actual expenditures on HIV/AIDS prevention at workplace, including expenditure on provision of training in HIV/AIDS prevention for employees, expenditure on raising employees’ awareness of HIV/AIDS prevention, fees for HIV consultation, examination and testing, and expenditure on supporting employees who are HIV sufferers.

- Expenditures on performance of duties pertaining to security and defense education, training, activities of militia forces and other defense and security duties as prescribed;

- The actual expenditures on operations of Party Communist Party organizations and social-political organizations in the businesses.

- Direct expenditures on the employees’ welfare: expenditures on employees’ family occasion; expenditures on holiday allowance or treatment support; expenditures on professional training; expenditures on supporting employees’ families affected by natural disasters, hostilities, accidents, illness; expenditures on providing reward for employees’ children due to their educational achievements; expenditures on allowances for traveling during holidays of the employees and other welfare expenditures.  

 The total expenditures incurred in the tax year must not exceed actual average 1 month’s salary.

The actual average 1 month’s salary equals (=) wage-fund released within a year divided (:) by 12 months. Wage-fund established within a year shall be prescribed in 2.5.c Clause 2 Article 6 of Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance.

Example: Company A has actual wage-fund released in 2014 by VND 12 billion, the average 1 month’s salary of company A incurred in the tax year 2014 shall be determined as follows: (VND 12.000.000.000 : 12 months) = VND 1.000.000.000

- Other special expenditures of each field shall apply guidance of the Ministry of Finance”.

Article 2. Clause 14 Article 7 of Circular No. 78/2014/TT-BTC shall be amended as follows:

Differences from the revaluation of assets as prescribed to contribute capital or transfer assets upon division, splitting, consolidation, merger or conversion (except for equitization or restructuring of the enterprises whose charter capital is wholly held by the state) shall be specifically determined as follows:

a) Increase or decrease resulting from the revaluation of assets is the difference between the re-evaluated value and the residual book value of assets and shall be included once in other incomes (for increase) or deducted from other incomes (for decrease) in a tax period for determining taxable incomes of businesses having their assets re-evaluated;

b) Increase or decrease resulting from the revaluation of land use rights (hereinafter referred to as land) for: capital contribution (in which the land transferee may gradually aggregate this value with deductible expenses), transfer upon division, splitting, consolidation, merger or conversion; or for capital contribution to investment projects to build houses and infrastructure facilities for sale shall be included once in other incomes (for increase) or deducted from other incomes (for decrease) in a tax period for determining taxable incomes of the land transferor;

Particularly, the increase resulting from the revaluation of land for the creation of fixed assets used in production and business activities which must not be depreciated or gradually aggregated with deductible expenses may be gradually included in other incomes of the land transferor for up to 10 years from the year in which the land is contributed as capital.  The land transferor shall notify the number of years they will aggregate the increase with other incomes when making the declaration of corporate income tax of the starting year of declaration of this income (the year in which the land to be contributed as capital are re-evaluated).

In case after capital contribution, businesses continue to transfer capital in the form of land (including also the case of capital contribution ahead of the 10-year time limit), the income from the transfer of capital in the form of land shall be calculated and declared for tax payment as income from real estate transfer.

The difference resulting from the revaluation of land includes: the difference between the re-evaluated value and book value of land if land use term is indefinite, or the difference between the re-evaluated value and value of land that remains after aggregation with income if land use term is limited.

c) Businesses that receive assets contributed as capital or assets transferred upon division, splitting, consolidation, merger or conversion of the company may depreciate such assets or gradually aggregate them with expenses according to the revaluation price (unless the value of land use rights is ineligible for depreciation or aggregation with expenses under regulations).”

Article 3. Clause 3 Article 8 of Circular No. 78/2014/TT-BTC shall be amended as follows:

“3. The income derived from the execution of the contract for scientific research and technological development shall be eligible for tax exemption until expiration of that contract but not more than 3 years from the day on which the revenue is earned;

The income derived from the sale of products that are results of new technologies applied in Vietnam for the first time shall be eligible for tax exemption but not more than 5 years from the day on which the revenue is earned;

The income derived from the sale of experimental products during the experimental production period shall be applied to relevant laws. 

a) The income derived from the execution of the contract for scientific research and technological development eligible for tax exemption must satisfy the following requirement:

- The scientific research activity registration is certified;

- Such scientific research and technological development contract is certified by a competent state management agency in charge of science.

b) The income derived from the sale of products that are results of new technologies applied in Vietnam for the first time is eligible for tax exemption if such technologies are certified by a science authority”.

Article 4. Clause 9 Article 8 of Circular No. 78/2014/TT-BTC shall be amended as follows:

"9. Income of the Vietnam Development Bank derived from credit extension serving investment in development, or credit extension serving export assigned by the State; income of Bank for Social Policies derived from credit extension to the poor and other subjects enjoyed preferential treatment policy; income of Vietnam Asset Management Company; income of government grants derived from revenue-generating activities assigned by the State : Vietnam social insurance fund, Deposit insurance corporation, Health insurance fund, Apprenticeship enhancement fund, Overseas employment support fund of the Ministry of Labor, Famer support fund, Vietnam legal aid fund, Public-utility telecommunications fund, Local development investment fund, Vietnam environmental protection fund, Credit guarantee fund for small and medium-sized businesses, Cooperative development aid fund, Poor women support fund, Fund for Protection of citizens and legal entities abroad, Housing development fund, Fund for small and medium-sized corporate development, Fund for National scientific and technological development, National technological innovation fund; incomes of non-profit Fund for Land development and other funds of the State prescribed or established and operated by the Government or Prime Minister are deriving from operations assigned by the State.”

In case the units earn incomes derived from operations other than revenue-generating operations assigned by the State, they must calculate and pay tax as prescribed”.

Article 5. Point e and g are added to Clause 5 Article 18 of Circular No. 78/2014/TT-BTC as follows:

“e) With regard to a licensed investment project, if the investment capital, stage, and rate of progress are registered in the initial investment dossier sent to investment licensing agency provided that the subprojects conducted on schedule, the subprojects shall be treated as a subproject of the first investment project granted the first license (except for force majeure events, objective difficulties in the site clearance, administrative procedures of regulatory agencies, disasters, conflagration or other difficulties or force majeure events). As a result, such subprojects shall be eligible for tax incentives for the rest of incentive period from the day on which the subprojects earn the income eligible for tax incentives.

If the investment project is licensed before January 1, 2014 and its investment stages are conducted as registered, such subprojects shall be eligible for tax incentives for the rest of incentive period from January 1, 2014.

In case the incomes of subprojects of first investment projects are eligible for corporate income tax incentives before January 1, 2014 as prescribed in legislative documents issued before January 1, 2014, the tax incentives shall remain unchanged.

During the execution of subprojects, if the investment authority (prescribed in the Law on investment No. 59/2005/QH11 dated November 29, 2005 and guiding documents) grants an extension of the project deadline and the project progress meets the extended deadline, the investor shall be eligible for tax incentives as prescribed.

g) If an investment project is provided with tax incentives and new investments in machinery and equipment are regularly made during the period 2009 - 2013, the additional income earned from such investments shall be eligible for the same tax incentives for rest of incentive period from tax period 2014.”

Article 6. Clause 3 Article 20 of Circular No. 78/2014/TT-BTC shall be amended as follows:

“3. The incomes from performing new investment projects prescribed in Clause 4, Article 19 of Decree No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance and income of the business from performing new investment projects in industrial parks (except for industrial parks located in socially and economically advantaged areas) shall be eligible for tax exemption for 2 years and 50% tax reduction for the next 4 years.

The socially and economically advantaged areas prescribed in this Clause are urban districts of special class cities or the class I cities affiliated to the central and the class I cities affiliated to provinces, not including urban districts of the aforesaid cities converted from districts from January 1, 2009; where an industrial park is located in both advantaged and disadvantaged areas, the determination of tax incentive for such industrial park depends on the actual location of the investment project.

The determination of special class cities, or class I cities prescribed in this Clause shall comply with regulations of Decree No. 42/2009/ND-CP dated May 7, 2009 of the Government on classification of cities and guiding documents of this Decree (if any)”.

Article 7. Clause 8 Article 23 of Circular No. 78/2014/TT-BTC shall be amended as follows:

“8. If the period of tax incentives is still unexpired due to the export ratio but the business is no longer eligible for tax incentives for textile and garment products from January 11, 2007 and other products from January 01, 2012 because of commitments to WTO, it may decide whether to apply preferential tax rates and tax exemption period successively or concurrently for the remaining time to textile and garment products from 2007 and to other products from 2012 depending on the business’ fulfillment of requirements (apart from export ratio and use of domestic raw materials) in accordance with the legislative documents on corporate income tax which is effective from the day on which the business is issued with the establishment license to the effective date of the Decree No. 24/2007/ND-CP dated February 14, 2007 of the Government providing guidance on implementation of Law on corporate income tax, or in accordance with regulations of legislative documents on corporate income tax at the time in which tax incentives are adjusted due to the commitments to WTO.

If the adjustments in this Circular are more advantageous than the adjustments in the previous legislative documents although the business chose the plan prescribed in such documents (whether the businesses has undergone an inspection or not). The businesses shall make amendments as prescribed in the Law on Tax administration and guiding documents on implementation of tax administration and their wrong declaration due to amendments shall not face penalties for violations against the laws on taxation. In case the tax paid by the business is larger than the payable tax according to the amendments, the tax payer may decide whether to offset it against the tax payable of next tax period or claim a tax refund as prescribed. In case the businesses made adjustments in accordance with WTO commitment for textile or garment products as prescribed in the previous legislative documents, if they incur penalties for violations against taxes, calculation of late payment interest and they have paid fines and late payment interest, they are not required to make any adjustments”.