On June 12th 2019, Hanoi Tax Department issued Official Letter No. 44996 / CT-TTHT. Whereby:
In case, the Company has registered with the Tax Authorities to apply the straight-line method to depreciate Fixed Assets for machinery and equipment in the year. In the following years, if the Company operates with high economic efficiency, they can apply the accelerated Depreciation according to the provisions of Item a, Article 13 of Circular No. 45/2013 / TT-BTC dated April 25th 2013 of the Ministry of Finance (For each Fixed Asset, it may only change the depreciation duration once). When the Company applies the accelerated Depreciation, it must ensure that it is in profitable status. The accelerated depreciation rate is not more than 2 times the depreciation rate determined by the straight-line method which are eligible for the deductible expenses when determining CIT if they meet the provisions of Article 4 of Circular No. 96/2015/TT -BTC.
For fixed assets which have been notified to the direct Tax Authority in accordance with regulations without the change of depreciation method, the Company shall not have to notify the tax authorities.
