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In 2020, in Vietnam in particular and globally in general, the complicated developments of the covid -19 epidemic have caused many huge losses in health, economy,... in the world. Therefore, Vietnamese State agencies have promptly joined hands and supported to create all conditions for businesses/companies to enjoy corporate income tax incentives and tax extensions or fee exemption regulations. subjects for the new year of establishment.

Who is the subject of the reduction?

Pursuant to Resolution No. 116/2020/QH14 of the National Assembly passed on June 19, 2020, Decree No. 114/2020/ND-CP of the Government passed on September 25, 2020.< /p>

• The enterprise is established according to the provisions of Vietnamese law.
• The organization is established under the Cooperative Law.
• The public service unit is established according to the provisions of Vietnamese law.
• Other organizations established under the provisions of Vietnamese law with production and business activities with income.

How much can corporate income tax be reduced?

• 30% reduction in corporate income tax payable for the 2020 corporate income tax period for businesses with total revenue in 2020 not exceeding VND 200 billion.
• The total revenue in 2020 as the basis for determining the subjects eligible for tax reduction according to the provisions of Clause 1 of this Article is the total revenue in the 2020 corporate income tax period of the enterprise, including all money sales, processing fees, and service provision fees, including price subsidies, surcharges, and extras that businesses are entitled to according to the provisions of the Law on Corporate Income Tax and its guiding documents.
  In case of newly established enterprises, enterprises converting business type, converting form of ownership, consolidation, merger, division, separation, dissolution, bankruptcy during the 2020 corporate income tax period, operating for less than 12 months, the total revenue in 2020 is determined by the total actual revenue in the 2020 corporate income tax period divided (:) by the number of months the enterprise actually operated production and business in the period. Calculate corporate income tax in 2020 multiply (x) by 12 months. In case a newly established enterprise, enterprise changes business type, changes form of ownership, consolidates, merges, divides, splits, dissolves, or goes bankrupt during the month, the operating period is counted as a full month. .
• In case an enterprise expects total revenue in the 2020 corporate income tax period to not exceed VND 200 billion, the enterprise shall determine a quarterly temporary payment equal to 70% of the quarterly corporate income tax payable.
• At the end of the 2020 corporate income tax period, in case the enterprise's total revenue in 2020 does not exceed 200 billion VND, the enterprise shall declare a reduction in corporate income tax for 2020 when finalizing taxes. corporate income according to regulations.
  The reduced corporate income tax amount of the 2020 corporate income tax period is calculated on the entire income of the enterprise, including the income specified in Clause 3, Article 18 of the Law on Corporate Income Tax.
  The reduced corporate income tax amount specified in this Decree is calculated on the corporate income tax amount payable in the 2020 corporate income tax period, after deducting the corporate income tax amount that the enterprise are enjoying incentives according to the provisions of the Law on Corporate Income Tax and its guiding documents.
• The corporate income tax period is determined according to the calendar year. In case the enterprise applies a fiscal year different from the calendar year, the corporate income tax period is determined according to the fiscal year to which the regulations apply. in the Law on Corporate Income Tax and its guiding documents.
• In case the first tax period of a newly established enterprise is 2019 or the last tax period of an enterprise converting business type, converting form of ownership, consolidation or merger If a division, split, dissolution, or bankruptcy in 2021 is shorter than 3 months, it will be added to the 2020 corporate income tax period to form a corporate income tax period. Determining total revenue and reduced tax amount in this case only applies to the 2020 corporate income tax period (12 months).