Agricultural and aquatic product processing is exempt from corporate income tax.

(Baonghean) - With the determination to promote tax administrative procedure reform, continue to remove difficulties, create favorable conditions for taxpayers, contribute to encouraging enterprises to produce and trade, on the basis of the provisions of the Law and current decrees, on June 22, 2015, the Ministry of Finance issued Circular No. 96/2015/TT-BTC (hereinafter referred to as Circular 96) providing guidance on corporate income tax. How the new points of this Circular affect the lives of enterprises is a matter of interest to many readers.

According to Deputy Director General of the General Department of Taxation Phi Van Tuan, immediately after Circular 96 was issued, the General Department of Taxation issued Official Dispatch No. 2512/TCT-CS dated June 24, 2015 to tax departments of provinces and cities to promptly disseminate, notify tax officials and propagate to taxpayers the new contents of Circular No. 96. With 30 new contents, divided into many groups of issues, it can be said that Circular 96 has had a profound impact on most small and medium enterprises nationwide.

Reduce administrative procedures for businesses

To reduce the number of hours for tax payment, improve national competitiveness; simplify administrative procedures for taxpayers to easily implement, and at the same time, amend regulations on tax declaration to comply with accounting standards, thereby making declaration and accounting simpler and easier, Circular 96 has removed unnecessary regulations when performing tax procedures and removed regulations on calculating according to the control level for some deductible expenses when determining taxable income. Specifically: The Circular adjusts the difference in regulations between accounting revenue and taxable revenue for services. Accordingly, the time to determine revenue for calculating corporate income tax for service provision activities is amended compared to the previous Circular No. 78 in the direction of creating favorable conditions for enterprises in unifying the time to determine revenue for calculating corporate income tax for service activities in accordance with the accounting regime.

Processing bamboo in Que Son commune (Que Phong). Photo: Cong Sang

According to Deputy Director of the Policy Department - General Department of Taxation Nguyen Quy Trung, previously, Circular No. 78 stipulated two times to determine revenue for calculating corporate income tax for service provision activities: the time of completing the provision of services to the buyer; or the time of issuing service provision invoices. Now, according to Circular No. 96, it stipulates one time to determine revenue to calculate taxable income for service provision activities: the time of completing the provision of services or completing part of the provision of services to the buyer. The second new point is that the Tax sector has amended the regulations on records and procedures for assets and goods lost due to natural disasters, epidemics, fires, and goods damaged due to changes in the natural biochemical process will be included in deductible expenses in the direction of using common records of relevant agencies. At the same time, the regulation that enterprises must send documents to the tax authority directly managing them to explain about lost or damaged goods will be abolished, and they only need to keep the records at the enterprise and present them to the tax authority when requested - Deputy Director of the Department Nguyen Quy Trung said.

In addition, along with the abolition of the regulation that enterprises must establish and manage the consumption norms of raw materials, materials, fuel, energy, goods and store them at the enterprise; the abolition of the control level for allowances for employees on business trips; the abolition of some regulations on non-deductible expenses when determining taxable income that rarely occur or have no practical significance; the abolition of the regulation that enterprises must make a list of electricity and water bills, Circular 96 also simplifies some records and documents when declaring and paying corporate income tax. Specifically: simplifying records and documents when declaring and paying taxes of Vietnamese enterprises investing abroad for income from investment projects abroad.

Previously, the dossier for declaring and paying taxes of enterprises with investment projects abroad included 5 documents. Now, according to the provisions of Circular 96, this dossier only includes 2 documents: a copy of the foreign income tax declaration certified by the taxpayer and a copy of the foreign tax payment document certified by the taxpayer or the original confirmation by the foreign tax authority of the tax amount paid or a copy of a document of equivalent value certified by the taxpayer. With the above amendments, 30 hours will be reduced for taxpayers in declaring and calculating corporate income tax - Deputy General Director Phi Van Tuan calculated.

Solve problemsin practice

In addition to the goal of reducing administrative procedures for enterprises, some main contents have been amended and supplemented in the circular to help enterprises understand the policy clearly and transparently. Firstly: regarding the time of declaring income from overseas investment projects for Vietnamese enterprises investing abroad, in case the enterprise transfers part of the income from overseas investment projects back to the country, the income from overseas investment projects will be declared in the corporate income tax settlement of the year in which the income is transferred back to the country. Regarding deductible expenses when determining taxable income, Circular 96 removes the control level for expenses for employees' clothing in kind, for expenses for employees on business trips, for expenses for purchasing life insurance for employees, especially for advertising, marketing, promotion, reception, and celebration expenses. At the same time, supplement the deductible expenses for funding expenses under the State's program, including funding from enterprises for the construction of new bridges for people in areas with special socio-economic difficulties according to the project approved by competent authorities - Deputy Director Nguyen Quy Trung further analyzed.

Not only that, the new regulation also adds deductible expenses for accommodation costs for foreign experts during their working time in Vietnam, and adds deductible expenses for interest payments on loans to invest in other enterprises. Regarding loss transfer when dividing or separating enterprises, the new regulation allows losses incurred before dividing or separating into other enterprises and during the loss transfer period to be allocated to enterprises after the division or separation according to the ratio of the divided or separated equity capital.

Many corporate income tax incentives

In response to the requirement to strengthen the removal of difficulties for production and business, and at the same time to ensure consistent implementation of tax policies, create favorable conditions for taxpayers, and contribute to promoting production and business of enterprises, Circular 96 is amended and supplemented in the direction of expanding and supplementing the subjects eligible for preferential tax rates, providing specific instructions on how to calculate tax for tax incentives due to meeting local conditions and providing additional instructions on tax incentive transition...

Regarding tax-exempt income, the addition of income from agricultural and aquatic product processing activities of cooperatives and enterprises in particularly difficult areas has helped to encourage investment resources to develop agriculture and rural areas, contributing to improving the lives of farmers. At the same time, the income from revenue-generating activities due to the implementation of the State-assigned tasks of the Capital Support Fund for the self-employed poor has been supplemented. In addition, the income supplement of the Bailiff Office (excluding income from activities other than bailiff activities) during the pilot implementation period according to the provisions of the law on civil judgment enforcement has also received the support of enterprises and employees.

Regarding preferential tax rates, the addition of a 10% tax rate for the entire operating period for income from agricultural and aquatic product processing activities of enterprises in difficult areas; the portion of enterprise income from socialized activities in the field of judicial appraisal; the addition of income subject to a 15% tax rate for the entire operating period for income of enterprises in the fields of cultivation, animal husbandry, and processing in the agricultural and aquatic sectors not located in difficult or especially difficult areas is also highly supported by enterprises. In addition, the addition of subjects entitled to a 10% tax rate incentive for a period of 15 years for the income of enterprises from implementing large-scale production projects; investment projects in the production sector (except for projects on goods subject to special consumption tax and mineral exploitation projects) with a minimum investment capital of twelve thousand billion VND; New investment projects producing products in the list of priority supporting industrial products for development that meet one of the prescribed criteria... also help enterprises operating in these fields to overcome many difficulties in their operations.

Regarding the application of corporate income tax incentives, in addition to the regulations on enterprises meeting the conditions on location for investment projects in the field of transportation business; meeting the conditions on location with income arising outside the location of the investment project..., new investment projects enjoying corporate income tax incentives are also amended and supplemented with some contents. Regarding the transfer of incentives, the Tax sector provides specific guidance on the transfer of incentives for enterprises with expansion investment projects, enterprises with production expansion investment projects under construction, enterprises implementing investment projects in industrial parks, investing in areas not yet in tax incentive areas, they can also be converted into tax incentive areas.

Thus, it can be said that Circular 96 has had a profound impact on most small and medium enterprises nationwide, especially those located in difficult areas, and has contributed greatly to the socio-economic development of the locality - Deputy General Director Phi Van Tuan affirmed.

Red River