GUIDING THE OFFSETTING OF CORPORATE INCOME TAX FOR THE ENTERPRISE ENGAGED IN RELATED-PARTY TRANSACTIONS

Pursuant to Official Dispatch No. 2835/TCT-TTKT issued by Ministry of Finance on July 09, 2020 and coming into effect from August 23, 2020.

– Accordingly, for the offsetting of corporate income tax periods paid in 2017 and 2018 of the enterprise engaged in related-party transactions shall be allowed to apply the provision of Decree No.68/2020 as follows:

When re-determination of the CIT amount payable under the new interest cost specified in the Decree No. 68/2020, if the total amount of CIT payable is reduced, a corresponding amount of late payment interests shall be also reduced (if any), specifically:

(i) Where the tax authority or competent authority has not carried out inspection:

• Taxpayers shall offset the difference between the amount of CIT and late payment interest in proportion to the amount of CIT in 2020;
• The remaining amount after the difference has been offset against the CIT amount payable in 2020 shall be offset against the CIT amounts payable in the next years but not more than 05 years from the year 2020;
• Over this period, the remaining amount shall not be settled.

(ii) Where the tax authority or competent authority has carried out inspection and issued inspection conclusions or decision:

• The taxpayer shall request its supervisory tax authority to re-determine the CIT amount payable;
• After having the final result, the offsetting the difference shall be performed as above.

Best regards,