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THE
MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence Freedom Happiness
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No.
03/2009/TT-BTC
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Hanoi,
January 13th, 2009
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CIRCULAR
ON
REDUCTION AND DEFERMENT OF CORPORATE INCOME TAX PURSUANT TO RESOLUTION
30/2008/NQ-CP OF THE GOVERNMENT DATED 11 DECEMBER 2008 ON URGENT SOLUTIONS FOR
ALLEVIATING THE ECONOMIC DOWNTURN BY PRESERVING ECONOMIC GROWTH AND ENSURING
THE WELFARE OF SOCIETY
Pursuant to the Law on Corporate Income Tax
and its implementing guidelines;
Pursuant to the Law on Management of Tax and its implementing
guidelines;
Pursuant to Resolution 21/2008/QH12
of the National Assembly Legislature XII on the estimated State Budget for year 2009;
Pursuant to Decree 118/2008/ND-CP of the Government dated 27 November 2008
on functions, duties, powers
and organizational structure of the Ministry of Finance;
Pursuant to Resolution 30/2008/NQ-CP of the Government dated 11 December 2008 on urgent solutions
for alleviating the economic
downturn by preserving economic growth
and ensuring the welfare of
society;
The Ministry of Finance
hereby provides the following guidelines on reduction and deferment of corporate
income tax ["CIT"] for enterprises meeting
difficulties in year 2009:
Part I
GENERAL PROVISIONS
1. The amount of CIT payable
by small and medium sized-enterprises
for the fourth quarter
of year 2008 and for year 2009 shall be reduced by thirty per cent (30%) in accordance with the guidelines in
Part II of this Circular.
An enterprise must satisfy either of the following criteria to qualify
as a small or medium-sized enterprise:
- Charter capital stipulated in its business registration certificate or investment certificate effective prior to 1 January 2009 does not exceed 10 billion dong; similarly for an enterprise newly established
after 1 January 2009, charter
capital stipulated in its initial
business registration certificate or investment certificate
must not exceed 10 billion dong.
Example 1: The initial
business registration
certificate of Enterprise
A was issued on 1 July 2007 and
records charter capital at 11 billion
dong, and the business registration certificate amended for the first time on 30 June 2008 records
charter capital of 10 billion dong.
Accordingly Enterprise A qualifies as a small or medium-sized enterprise and shall be entitled to the CIT reduction pursuant to this Circular. If the amended business registration certificate
had recorded charter capital at 15 billion dong, then Enterprise A would not qualify as a small
or medium-sized enterprise
(unless it satisfied the condition
on employees stipulated in the next
paragraph) for entitlement to the reduction of CIT and the extension of time for payment
of CIT pursuant to this Circular.
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In
the case of an enterprise with turnover, which was newly established on or after 1 October
2008, the number of staff paid salary in the initial month (a month being a full 30 days) must not be more than 300.
Average
number of employees during the fourth quarter of year 2008
=
Number of employees paid salary for the month of October
2008
+
Average
number of employees as a result
of increases and reductions
during the fourth quarter
of year 2008
The
average number of employees as a result of increases and reductions during the fourth quarter
of year 2008 shall be determined in accordance with the weighted
average of the number of months; and
the initial month or last month working for the enterprise
shall be counted as a month.
Example 2: Enterprise B had 302 employees on
its list of salaried staff for the month
of October 2008. In November 2008 it recruited
2 more employees, and 10 employees retired in December 2008. Accordingly the average number of employees as a result of increases and
reductions in the fourth quarter of
year 2008 shall be determined
as follows:
(2 people x 2 months - 10 people x 1 month)/3 months = (-) 2 employees.
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Example 3: Enterprise C
is newly established
and its initial business registration certificate was issued in October 2008. The first date on
which Enterprise C had turnover
was 10 December 2008. There are 295 employees on the salary list for January 2009.
Accordingly Enterprise C qualifies as a small or medium-sized enterprise and is entitled
to the CIT reduction and the extension of time for payment of CIT pursuant to this Circular.
2. An extension of time for payment
of CIT pursuant to Part III this Circular shall apply to small and
medium-sized enterprises as defined in clause I above, and also to enterprises producing or
processing agricultural, forestry
or seafood products, textiles
and garments, footwear, and electronic components.
3. The CIT reduction and extension of time for payment
stipulated in this Circular shall apply to enterprises already
implementing the accounting regime on invoices and source
documents, and which have registered to pay tax in
accordance with their declarations.
Part II
REDUCTION OF CORPORATE INCOME TAX
1. The amount of CIT payable
by small and medium sized-enterprises
for the fourth quarter
of year 2008 and for year 2009 shall
be reduced by thirty per cent
(30%), specifically as follows:
(a) The CIT reduction for the fourth quarter of year 2008 shall equal 30% of the amount
of CIT payable for that quarter.
Enterprises shall fix the amount of CIT payable for the fourth quarter of year 2008 as follows:
- If revenue, expenses
and taxable income of the fourth quarter of year
2008 are determinable,
then the amount of CIT payable for such quarter shall be fixed
on the
basis of the taxable income for that quarter as accountable by the enterprise in its books of accounts.
- If revenue, expenses and taxable income of the fourth quarter of year 2008 are not able
to be determined, then the amount of CIT payable for that quarter shall be fixed as follows:
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=
Amount of CIT
payable for year 2008
4
(b) The CIT reduction for year 2009 shall equal 30%
of the amount of CIT payable for that year.
Enterprises shall themselves
calculate
the amount of their 30% tax reduction
when they declare the amount of CIT provisionally payable for
the fourth quarter of year 2008 and
for each quarter of year 2009;
and shall themselves determine the
amount of their reduction entitlement when they conduct accounting finalization for years 2008 and 2009.
In
the case of any enterprise currently entitled to CIT incentives, then the figure to be reduced
by 30% shall be the remaining CIT figure after deducting the amount of preferential CIT pursuant to the law on corporate income tax.
Example 4: Enterprise X has taxable income of 500 million
dong in the tax assessment period being
year 2009. Enterprise X
is currently entitled
to the preferential tax rate of 15% and a
50% reduction of the amount of tax payable.
Accordingly the remaining
CIT figure shall be
determined as follows:
- Amount of CIT payable at the tax rate of 15% is 500 million dong x 15% = 75 million
dong.
- Amount of CIT payable after the 50% reduction
is 75 million dong x 50% = 37.5 million dong.
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- Remaining amount of CIT payable
is 37.5
million dong - 11.25 million
dong = 26.25 million dong.
2. Enterprises shall conduct procedures for implementing the above by declaring and paying tax and by
conducting CIT tax finalization on the current standard forms.
(a) Provisional self-declaration for the fourth quarter of year
2008 and for each quarter of year
2009 shall be made as follows:
Enterprises shall write the following two additional lines before
the undertaking at the end of
the current standard form for
provisional CIT declarations:
- CIT reduced in accordance
with Resolution 30 = (Tax payable in the tax assessment period
x 30%).
- Remaining CIT payable in the tax assessment period = (CIT payable in the period x 70%).
Enterprises which
select the method for determining
the amount of CIT entitled to this
reduction by accounting for their revenue, expenses and taxable income for the fourth quarter
of year 2008 must lodge an additional report on their business results for the fourth quarter of
year 2008 together with their tax
declaration.
(b) Self-declaration of tax
finalization for year 2008:
Enterprises shall write the following two additional lines before
the undertaking at the end of
the current standard form for
tax finalization declarations:
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- CIT reduced in accordance with Resolution 30 = (CIT for the fourth quarter of year 2008 x 30%).
- Remaining CIT payable
for year 2008 = (CIT payable for year 2008 less CIT reducible pursuant
to Resolution 30).
- In cases where the amount of CIT in the fourth quarter of year 2008 is not accountable by the enterprise in its books of accounts:
+ CIT reduced in accordance with
Resolution 30 = (CIT payable for year 2008 x 30% / 4).
+ Remaining CIT payable for year 2008
= (CIT payable for year 2008 x
92.5%).
(c) Self-declaration of tax
finalization for year 2009:
Enterprises shall write the following two additional lines before
the undertaking at the end of
the current standard form for
tax finalization declarations:
- CIT reduced in accordance with
Resolution 30 = (CIT payable for year 2009 x 30%).
- Remaining CIT payable for year 2009 = (CIT payable for year 2009 x 70%).
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DEFERMENT OF TIME FOR PAYMENT OF CIT
1. The amount of CIT for which payment
is deferred shall be determined as follows:
(a) In the case of small and medium-sized enterprises, it shall be the amount of provisional CIT for
each quarter of year 2009 after
making the reduction stipulated in this Circular.
(b) In the case of enterprises producing or processing agricultural, forestry or seafood products, textiles and garments, footwear, and electronic components, it shall be the amount of provisional CIT
for each quarter of year 2009 in respect of the income from these activities.
If
an enterprise is unable to determine the amount of provisional CIT on any of the above-named activities as distinct from the amount of provisional CIT payable on other activities, then the amount
of provisional CIT from operations
of manufacturing and processing
for which payment shall be deferred shall be calculated as a percentage being total turnover from the former activities
over total turnover of the
enterprise in year 2008.
2. Payment shall be deferred for nine
(9) months as from the last day of the period for payment pursuant
to the Law on Management
of Tax, and specifically
as follows:
- Payment of the amount of provisional CIT assessable for the first quarter of year 2009 shall be
deferred until 29 January
2010 at the latest.
- Payment of the amount of provisional CIT assessable for the
second quarter of year
2009 shall be deferred until
29 April 2010 at the latest.
- Payment of the amount of provisional CIT assessable for the third quarter of year 2009 shall
be deferred until 30 July 2010 at
the latest.
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3. Enterprises shall implement
the following procedures
for deferment of tax payment: they shall
prepare CIT provisional payment declarations for each quarter
in accordance with the current
regulations, and before the line containing the undertaking in the tax declaration they shall record the
date on which they propose to make
the deferred payment.
4. During the period of deferment,
enterprises shall not be deemed to have committed the breach of delaying tax payment, and shall not
be subject to any administrative penalty
for late payment in respective of the amount of tax for which payment is deferred.
Part IV
ORGANIZATION OF IMPLEMENTATION
1. This Circular shall be of full force and effect after
forty-five (45) days from the date of its signing.
2. Any problems arising during implementation should be promptly reported to the Ministry of Finance for additional guidelines.
FOR
THE MINISTER OF FINANCE
DEPUTY MINISTER
Do Hoang Anh Tuan