Vietnam CIT and PIT Finalization for the 2023 Tax Period
Compliance with CIT and PIT finalization regulations is crucial for companies and individuals in Vietnam. We discuss reporting requirements and relevant deadlines in this article. For support with your corporate tax and audit obligations in Vietnam, you can reach our professional service advisors at vietnam@dezshira.com.
The timeframe spanning from January 1 to March 31 in a calendar year is commonly known as the “high season” among accounting and audit professionals in Vietnam. This period is characterized by the preparation and submission of finalization returns for Corporate Income Tax (CIT) and Personal Income Tax (PIT).
Official Letter 1000/CTBDU-TTHT: General advisory
Rates and deadlines
Organizations must strictly adhere to the specified deadlines for declaring and paying license fees. Failure to comply may result in penalties or legal consequences. It is imperative for businesses to accurately calculate and fulfill their financial obligations within the stipulated timeframes.VAT declarations
Clarity is provided in the advisory regarding the frequency of VAT declarations, whether monthly or quarterly. Businesses should ensure they understand and fulfill their obligations accordingly to avoid any discrepancies or penalties.PIT declarations
Organizations are responsible for declaring Personal Income Tax from salaries and wages. It is essential to accurately report and fulfill PIT obligations in compliance with the regulations outlined by the tax authorities.Non-agricultural land use tax
The advisory specifies the deadline for declaring and paying non-agricultural land use tax. Businesses must meet this deadline to avoid any penalties or legal consequences.Natural resources tax
Clear information is provided on the declaration and finalization deadlines for natural resources tax.Fixed asset depreciation
Guidance is provided on registering the method for fixed asset depreciation.Tax agent staff
Responsibilities are outlined for tax agent staff regarding reporting and updating knowledge related to tax matters. It is crucial for businesses to ensure their tax agent staff are well-informed and capable of fulfilling their duties effectively.Electronic invoices and deduction documents
Important considerations are highlighted for businesses using electronic invoicing and tax deduction documents. Compliance with electronic invoicing requirements and proper documentation is essential to avoid penalties and ensure accurate tax reporting.Tax policy expiry
An overview is provided of tax policies set to expire in 2024, including the VAT reduction policy from 2023, tax payment extension policy from 2023, and registration fee reduction policy for cars. Businesses should prepare for the expiration of these policies and adjust their tax planning strategies accordingly.New tax policies
Details are provided on new tax policies taking effect in 2024, including the global minimum tax (additional CIT/top-up tax), environmental protection tax reduction policy for gasoline and oil, and VAT reduction policy specified in Decree 94/2023/ND-CP. Businesses should familiarize themselves with these new policies and adapt their tax compliance practices accordingly.
CIT finalization guidelines: Official Letter 1016/CTBDU-TTHT
Provisional payments
Enterprises are required to make provisional payments of CIT throughout the fiscal year. The total provisional CIT paid for the four quarters must not fall below 80 percent of the CIT amount payable according to the annual settlement. Failure to meet this threshold will result in late payment penalties.Submission deadline
Enterprises must submit their CIT finalization declaration for the fiscal year 2023 no later than the last day of the 3rd month following the end of the calendar year or fiscal year.Required documents
The CIT finalization dossier should include the following documents:- Corporate income tax settlement declaration form according to Form No. 03/TNDN issued together with Circular No. 80/2021/TT-BTC by the Ministry of Finance.
- Audit Report and Annual Financial Report: Annual financial statements or financial statements until the termination of activities or conversion of business type or restructuring of the enterprise according to the provisions of laws of accounting and audit.
- Appendices (number may vary based on the actual circumstances of the taxpayer):
- Appendix of production and business results: Form No. 03-1A/TNDN, Form No. 03-1B/TNDN, Form No. 03-1C/TNDN.
- Appendix of loss transfer: Form No. 03-2/TNDN.
- Appendices linked to preferential CIT/tax incentives: Form No. 03-3A/TNDN; Form No. 03-3B/TNDN; Form No. 03-3C/TNDN; Form No. 03-3D/TNDN.
- Appendix of foreign CIT paid: Form No. 03-4/TNDN.
- Appendix of tax on real estate transfer activities: Form No. 03-5/TNDN.
- Appendix of tax on real estate brokerage activities: Form No. 03-8D/TNDN.
- Appendix allocating tax amounts payable to production establishments: Form No. 03-8/TNDN.
- Other appendices as prescribed.
Related-party transactions
Enterprises involved in related-party transactions must include additional documents as prescribed in Appendices I, II, III, IV, issued with Decree 132/2020/ND-CP.PIT finalization guidelines: Official Letter 1017/CTBDU-TTHT
Subjects required to settle tax
- Companies:
- Individuals:
- If they have an additional tax amount payable after finalization of VND 50,000 or less.
- If there is an overpaid tax amount after finalization, but no tax refund or tax offset is required.
- If their current income does not exceed VND 10 million per month and they have 10 percent tax deducted at source.
Submission deadline
For companies, the latest submission date is the last day of the 3rd month following the end of the calendar year. For individuals, the deadline is no later than the last day of the 4th month after the end of the calendar year.Form of Tax Finalization Declaration
- Personal income tax settlement form according to Form No. 05/QTT-TNCN issued together with Circular No. 80/2021/TT-BTC.
- Appendix to List No. 05-1/BK-QTT-TNCN; Appendix to List No. 05-2/BK-QTT-TNCN; Appendix to List No. 05-3/BK-QTT-TNCN issued together with Circular No. 80/2021/TT-BTC.
Stay informed to be compliant
It is imperative for enterprises in Vietnam to stay informed about the latest tax regulations and comply with their tax obligations to avoid penalties and legal consequences. By understanding and adhering to Vietnam’s official tax guidelines, organizations can ensure timely and accurate tax reporting, thereby contributing to their overall financial compliance and sustainability.For further assistance or clarification regarding specific tax matters, businesses are encouraged to consult with professional tax advisors. Our professional service advisors in Vietnam, including the tax and audit team, can be contacted at vietnam@dezshira.com.
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