Regarding the provisions of Decree 126/2020/ND-CP on "The total temporarily paid amount of corporate income tax (CIT) for the first 3 quarters in the tax year must not be less than 75% of CIT payables under annual finalization", it is practically difficult for businesses whose revenue focused on the year end or who have unpredictable revenues to identify temporarily CIT payment, especially in the context that businesses are increasing production to recovery the business in the new normal.
In October 2021, a representative of the General Department of Taxation raised the above problems at a press conference and announced that the Ministry of Finance was considering and would have an official document to amend and supplement this regulation to facilitate businesses. The document was expected to be issued in October 2021. However, during the next 2 months, the Ministry of Finance did not issued any documents or take any actions.
Recently, after receiving requests from the Ho Chi Minh City National Assembly Delegation and businesses, on December 7, 2021, the Ministry of Finance issued Official Letter 13983/BTC-TCT to respond to the delegates’ requests.
In this Official letter, the Ministry of Finance guides as follows:
During the third quarter in 2021, there were 23 provinces and cities under social distancing. Therefore, most businesses had to temporarily suspend their production and business, and did not generate revenue or income, resulting in no temporary payment of CIT.
Moving to the fourth quarter in 2021, the Government has implemented many measures to prevent and control the Covid-19 epidemic so businesses gradually recover operations. It is expected that CIT will mainly focus on the last quarter of the year. Therefore, the Ministry of Finance had a written report to the Prime Minister asking for permission to amend some articles of Decree No. 126/2020/ND-CP, including the provision for temporary payment for the first 3 quarters of the year mentioned above.
Based on the direction of the Prime Minister, the Ministry of Finance will draft a Decree amendment document and send to Ministries and branches for comments and submission to the Government for promulgation.
Thus, businesses can be partly assured that there will be instructions and amendments to the above regulations soon.
RSM will keep you posted regarding the issuance of the official document by the Ministry of Finance.
Should you have any concerns during the process of implementing the regulations, please contact us.
Comments