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GENERAL DEPARTMENT
OF TAXATION
HANOI CITY DEPARTMENT OF TAXATION
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SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
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No.: 85106/CT-TTHT
Re: Corporate income tax on bank deposit
interests
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Hanoi, September
22, 2020
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To: The
Representative Office of Hiroshima Bank, Ltd. in Hanoi City
(Address: Suite 901, Pacific Place, 83B Ly Thuong Kiet Street, Tran Hung Dao
Ward, Hoan Kiem District, Hanoi City - TIN: 0108865143)
In response to the Official Dispatch No. 02/2020/CV
dated August 04, 2020 of the Representative Office of Hiroshima Bank, Ltd. in
Hanoi City regarding corporate income tax (CIT) on interests on bank deposits,
Hanoi City Department of Taxation hereby gives guidelines as follows:
- Pursuant to the Circular No. 78/2014/TT-BTC dated
June 18, 2014 of the Ministry of Finance of Vietnam providing guidelines for
implementation of the Government’s Decree No. 218/2013/ND-CP dated December 26,
2013 prescribing and guiding the implementation of the Law on Corporate Income
Tax;
+ Clause 5 Article 3 stipulates the tax calculation
method as follows:
“5. In case public service providers, other
organizations that are not enterprises duly established and operating under the
Law of Vietnam, and enterprises paying VAT using direct method earn incomes
from goods and services subject to CIT and can determine their revenues but
cannot determine costs and incomes from business activities, they shall declare
and pay CIT at the following fixed rates of revenues from the sale of goods and
supply of services. To be specific:
+ For services (including interests on deposits
and loans): 5%.
Regarding education, healthcare, art
performance: 2%.
+ For goods trading: 1%.
...
...
...
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…”
+ Clause 1 Article 4 stipulates determination of
assessable incomes as follows:
“1. Assessable income incurred in a tax period
equals (=) taxable income minus (-) tax-free income and losses carried forward
from previous years.
Assessable income is calculated adopting the
following formula:
Assessable
income
=
Taxable income
-
Tax-free income
...
...
...
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Losses carried
forward from previous years
…”
+ Clause 1 Article 11 stipulates CIT rate as
follows:
“1. From January 01, 2014, the CIT rate is 22%,
except for the cases specified in Clause 2 and Clause 3 of this Article and the
cases in which preferential rates are applied.
…
From January 01, 2016, the CIT rate of 20% shall
apply to enterprises that are applying the CIT rate of 22%.”
- Pursuant to the Circular No. 96/2015/TT-BTC dated
June 22, 2015 of the Ministry of Finance of Vietnam providing guidelines for
corporate income tax (CIT):
+ Clause 1 Article 1 amending Clause 1 Article 3 of
the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance
of Vietnam providing guidelines for implementation of the Government’s Decree
No. 218/2013/ND-CP dated December 26, 2013 prescribing and guiding the
implementation of the Law on Corporate Income Tax (hereinafter referred to as
“Circular No. 78/2014/TT-BTC”) stipulates as follows:
“1. ...
...
...
...
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CIT payable
=
Assessable
income
-
Contributions
to science and technology fund (if any)
x
CIT rate
…”
+ Article 2 provides amendments to Clause 2 Article
4 of the Circular No. 78/2014/TT-BTC as follows:
...
...
...
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…
Taxable income in a tax period is calculated as
follows:
Taxable income
=
Revenue
-
Deductible
expenses
+
Other incomes
...
...
...
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- If revenue, expenses and income from business
activities can be determined, CIT payable shall be calculated according to the
provisions of Clause 2 Article 1, Article 2 of the Circular No. 96/2015/TT-BTC
dated June 22, 2015 and Clause 1 Article 4, Article 11 of the Circular No.
78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance of Vietnam.
- If revenue can be determined but expenses and
income from business activities cannot be determined, CIT on deposit interests
shall be declared and paid according to a fixed rate of 5% of revenue as
prescribed in Clause 5 Article 3 of the Circular No. 78/2014/TT-BTC dated June
18, 2014 of the Ministry of Finance of Vietnam.
The Representative Office of Hiroshima Bank, Ltd.
in Hanoi City is requested to study the abovementioned regulations and consider
current situations to declare and pay tax in accordance with regulations of
law.
If there are any other difficulties that arise
during the implementation of tax policies, you can refer to our guiding
documents available on website http://hanoi.gdt.gov.vn or directly contact the
Tax Inspection Division No. 2 for specific guidelines.
The Representative Office of Hiroshima Bank, Ltd.
in Hanoi City is requested to comply with guidelines herein./.
PP.
DIRECTOR
DEPUTY DIRECTOR
Nguyen Tien Truong