Question:
Our company had approximately 30 billion VND in revenue in the fiscal year 2020 (below 200 billion VND). We anticipate generating taxable corporate income of 1 billion VND this year, which means the corporate income tax (CIT) at the regular rate of 20% would amount to 200 million VND. We also have accumulated losses from the previous year that haven’t been carried forward, totaling 800 million VND. According to Decree 114/2020/NĐ-CP, our company is eligible for a 30% reduction in corporate income tax. Therefore, we would like to know whether the 30% reduction is applied to the CIT amount generated in 2020 (i.e., 200 million VND) or to the CIT amount after carrying forward the losses, which would be (1 billion – 800 million) x 20% = 40 million VND?
Answer:
Based on Article 2 of Decree No. 114/2020/NĐ-CP dated September 25, 2020, of the Government, which provides detailed guidance on the implementation of Resolution No. 116/2020/QH14 of the National Assembly regarding the reduction of CIT payable in 2020 for enterprises, cooperatives, business households, and other organizations.
Based on Article 1 of Circular No. 96/2015/TT-BTC dated June 22, 2015, of the Ministry of Finance, which guides the implementation of CIT laws, amending and supplementing Article 3.1 of Circular No. 78/2014/TT-BTC dated June 18, 2014, of the Ministry of Finance, providing guidance on the implementation of Decree No. 218/2013/NĐ-CP dated December 26, 2013, of the Government, which stipulates and guides the implementation of the Law on CIT (referred to as Circular No. 78/2014/TT-BTC), regarding CIT that must be paid:
In the case of calculating CIT for the fiscal year 2020, if the company has revenue of less than 200 billion VND, the company is entitled to a 30% reduction of the CIT payable for the fiscal year 2020.
In the case of previous years when the company incurred losses that were carried forward as prescribed, before calculating the CIT payable and applying the 30% reduction for the fiscal year 2020, the company must deduct the losses from the previous year as regulated.
Question:
We are a company with our main office located in Binh Thanh District, Ho Chi Minh City. In order to expand our business network, we have rented two properties, one in District 9, Ho Chi Minh City, and another one in Binh Duong Province, to establish two additional business locations. We would like to know how we should register and report the use of electronic invoices for these two business locations. How should we declare and settle taxes for these two business locations?
Answer:
Based on the guidance provided in Point c and Point d, Clause 1, Article 11 of Circular No. 156/2013/TT-BTC dated November 6, 2013, of the Ministry of Finance, which provides guidance on tax administration laws, as well as the Law amending and supplementing some provisions of tax administration laws and Decree No. 83/2013/NĐ-CP dated July 22, 2013, of the Government;
Based on the guidance provided in Clause 3, Article 3 of Circular No. 119/2014/TT-BTC dated August 25, 2014, of the Ministry of Finance, amending Clause 4, Article 12 of Circular No. 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance, which provides guidance on the implementation of the Value Added Tax Law, and Decree No. 209/2013/NĐ-CP dated December 18, 2013, of the Government, detailing and guiding the implementation of some articles of the Value Added Tax Law;
Based on the guidance provided in Article 5 of Circular No. 39/2014/TT-BTC dated March 31, 2014, of the Ministry of Finance, which provides guidance on the implementation of Decree No. 51/2010/NĐ-CP dated May 14, 2010, and Decree No. 04/2014/NĐ-CP dated January 17, 2014, of the Government, regarding invoices for the sale of goods and provision of services; as well as Clause 3, Article 1 of Circular No. 37/2017/TT-BTC dated April 27, 2017, of the Ministry of Finance, amending and supplementing Clause 4, Article 9 of Circular No. 39/2014/TT-BTC;
Based on the guidance provided in Article 5 of Circular No. 95/2016/TT-BTC dated June 28, 2016, of the Ministry of Finance, regarding tax registration;
Based on Decision No. 2845/QĐ-BTC dated December 30, 2016, of the Ministry of Finance, regarding the assignment of tax management responsibilities.
Referring to document No. 3200/TCT-KK dated August 12, 2019, from the General Department of Taxation regarding tax management for business locations located in a different province than the head office. In the case where the business location is in a different province than the head office, the business location shall declare and pay Value Added Tax (VAT) at the tax authority directly managing the business location, while the company shall centrally declare and settle Corporate Income Tax (CIT) at its head office.
