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According to the current regulations, corporate income tax no longer requires quarterly tax returns. Instead, businesses only need to estimate the amount and submit it as provisional tax. At the end of the year, they will file the final tax return for corporate income tax.
1. Methods for calculating provisional quarterly and annual corporate income tax:
Formula:
Corporate Income Tax to be Paid = Taxable Income x Corporate Income Tax Rate
In case a business establishes a fund for science and technology development, the calculation is as follows: Corporate Income Tax to be Paid = Taxable Income - Science and Technology Fund Allocation x Tax Rate.
Where: Method of determining taxable income:
Formula: Taxable Income = Taxable Income Subject to Tax - Exempt Income + Carried Forward Losses
A. Taxable Income Subject to Tax:
Taxable income subject to tax is the total income from business activities of goods, production of goods, services, and other taxable incomes.
B. Exempt Income:
Exempt incomes of enterprises include:
+ Income from farming, forestry, aquaculture, seafood processing, income of agricultural cooperatives, areas with difficult economic conditions.
+ Income from providing direct technical services for agriculture.
+ Income from activities of signing contracts for scientific and technological research and development.
+ Income from business activities of enterprises employing disabled workers, individuals after drug rehabilitation, individuals infected with HIV...
+ Income from vocational training activities for ethnic minorities, children in difficult circumstances, social evils, and drug addicts.
+ Income from capital contribution, share purchase, joint ventures, and partnerships with domestic enterprises.
+ Income from the first-time transfer of emission reduction certificates granted to enterprises.
+ Income from fulfilling tasks assigned by the state to the Vietnam Development Bank in credit investment activities, export credit, income from credit activities for the poor...
+ Income from technology transfer in priority areas by individuals and organizations in economically and socially disadvantaged areas.
+ Income from subleasing office spaces during the experimental implementation period as regulated by the law on civil execution of judgments.
C. Losses carried forward in the calculation of corporate income tax
Losses carried forward are applied when business activities are incurring losses, and these losses are deducted from the taxable income of business activities with income chosen by the enterprise.
+ Where taxable income is determined as follows:
Taxable income = Revenue - Deductible expenses + Other incomes
Revenue for taxable income calculation includes all sales revenue, processing revenue, service provision revenue, including subsidies, surcharges, and incidental charges received by the enterprise regardless of whether the money has been received or not.
There are two scenarios:
+ When businesses declare VAT by deduction method, revenue is without VAT
+ When businesses declare VAT by direct method, revenue includes VAT
2. Corporate income tax rates
+ For enterprises applying before January 1, 2016, the tax rate is 20% for those with total revenue of the previous year adjacent to 20 billion VND. And 22% applies to enterprises not subject to the 20% tax rate.
+ For enterprises from January 1, 2016 onwards applying tax rates of 20% to 22%, they will switch to applying a tax rate of 20%.
3. Calculation of corporate income tax for enterprises declaring directly:
Enterprises will pay VAT by the direct method, while non-corporate organizational units are exempt from VAT
In cases where businesses have taxable income determined by revenue but cannot determine costs, they shall declare and pay CIT based on a certain percentage of specific sales revenue:
+ For services, including interest on deposits and loans, the rate is 5%
+ For trading goods: 1%
+ For other activities: 2%
For every individual, calculating income tax is crucial to comply with state regulations. Calculating personal income tax can be prone to errors if not detailed enough. If you're unsure how to calculate personal income tax, follow the articles on Taimien Phi's Thuthuat to gain a better understanding.
Here are the specifics on how to calculate corporate income tax through various specific forms that businesses can use to determine their tax liability in accordance with tax laws. After calculation, the next step is tax declaration. To expedite tax declaration, HTKK software will assist businesses. HTKK is a tool issued by the Tax Department to help individuals and businesses file taxes online.
