On July 14th ,2020, the General Department of Taxation issued Official Letter No. 2835/TCT-TTKT. Thereby, the retroactive processing for a number of provisions in Decree No. 68/2020/ND-CP for the tax period in 2017, 2018 and 2019 shall be carried out as follows:
Tax finalization period in 2019
- For the enterprises that have declared their tax finalization in 2019 according to their tax period deadline which is before March 31st ,2020, they shall make additional declarations for CIT finalization as prescribed, amended and supplemented in Decree No. 68/2020/ND-CP.
- For the enterprises that have not reached their tax finalization’s deadline in 2019, they shall implement the tax finalization as prescribed, amended and supplemented in Decree No. 68/2020/ND-CP.
CIT finalization period in 2017, 2018
- Increase the limited loan interest cost from 20% to 30%;
- Apply the calculation method of the net loan interest cost (the loan interest excludes deposit interests and lending interests);
- Not apply the retroactivity for amended and supplemented provisions in point (b) (costs forwarding) and (c) (extending the exempted entities) in Decree No. 68/2020/ND-CP for 2017, 2018.
- Offsetting the paid taxable CIT in 2017 and 2018 shall be carried out as follows:
For cases that have not been inspected, examined:
Taxpayers shall offset the difference between the amount of CIT and the corresponding late payment amount against the payable CIT amount in 2020. If the payable CIT amount in 2020 is enough to offset in full for the difference, the remaining difference amount shall be offset for the payable CIT in the next 05 years from 2020. Over the above period, the remaining amount shall not be settled.
For cases that have been inspected, examined and conclusions, settlement decision has been issued :
The taxpayer shall request its supervisory tax authority to re-determine the payable CIT amount. Based on the taxpayer’s request and relevant documents, including documents of the enterprise and documents and records of the Inspection party, tax authority that re-determine the payable CIT amount, the corresponding late payment amount for offsetting the difference to the CIT in 2020.
If it is necessary, the tax authority shall collaborate with the Inspection party to examine, review and determine data of taxpayers at the tax authority headquarter.
Same as the cases that have not been inspected, examined. If the payable CIT amount in 2020 is enough to offset in full for the difference, the remaining difference amount shall be offset for the payable CIT in the next 05 years from 2020. Over the above period, the remaining amount shall not be settled.
Location, method of the implementation
The payable tax amount re-determination shall be carried out at the tax authority headquarter, the tax inspection, examination shall not be carried out at the taxpayer headquarter; no adjustment will be made for the conclusions and inspection, examination decisions in 2017 and 2018.
For cases that have already been imposed with an administrative penalty against a violation in the tax field, the fines imposed for administrative violations in the tax field shall not be adjusted.
