GUIDANCE ON REDUCTION 30% OF ENTERPRISE INCOME TAX IN 2020

Pursuant Decree No. 114/2020/ND-CP issued by the Government on September 25, 2020 and coming into effect from August 03, 2020:

– Accordingly, CIT payable in the fiscal year 2020 by an enterprise whose total revenue in 2020 does not exceed VND200 billion shall be reduced by 30%.

– The total revenue is 2020 that is the basis for determination of eligibility for CIT reduction is the total revenue of an enterprise in the fiscal year 2020, including:

(i) Revenue from sales of goods, processing and service provision, subsidies and extra charges to which the enterprise is entitled as prescribed.

(ii) In case an enterprise’s expected total turnover in the enterprise income tax period of 2020 is not exceed VND 200 billion, such enterprise shall determine its quarterly temporary payment equivalent to 70% of the quarterly payable enterprise income tax amount.

(iii) At the end of the enterprise income tax period of 2020, if the enterprise’s total revenue in 2020 does not exceed VND200 billion, such enterprise shall make a declaration of reduction of enterprise income tax for 2020 when settling enterprise income tax as prescribed.

(iv) The CIT reduction of the fiscal year 2020 shall apply to the total revenue of the enterprise, including the amounts specified in Clause 3 Article 18 of the Law on Corporate Income Tax.

– The fiscal year will be the calendar year. Fiscal years of enterprises that do not apply calendar years shall be determined in accordance with the Law on Corporate Income Tax and its guiding documents.

Best regards,