Handling the underpaid/overpaid CIT amount as applying the 30% reduction under Resolution 116/2020/QH14
According to the Decree No. 114/2020/ND-CP dated Sep 25th, 2020 by the Vietnam Government, the settlement of underpaid/ overpaid CIT amount as applying the 30% reduction under the Resolution No. 116/2020/QH14 by the National Assembly shall be in accordance with the Law on Tax Administration and guiding documents.
In case of finalizing and inspecting/ examining CIT, the underpayment or overpayment could be treated as below:
| Case | Underpayment of CIT | Overpayment of CIT |
| CIT Finalization | To pay the arrears and late payment interest
in accordance with the current regulation. |
The excess amount shall be handled in accordance with current regulation. |
| Inspection, tax audit | To pay the arrears and late payment interest
in accordance with the current regulation. The 30% reduction specified in this Decree shall apply to the increase in CIT. |
In detail, there has specific regulation providing treatment to case of overpayment:
Pursuant to Article 33, Clause 1.a, Circular 156/2013/TT-BTC dated Nov 6th, 2013 by the Ministry of Finance, it is regulated that:
1. An amount of tax, late payment penalties, or fines is considered overpaid when:
“a) The tax, late payment interest, and fines paid by the taxpayer is higher than the amounts payable within 10 years from the day on which the amounts are paid to government budget. If terminal declarations must be made, the taxpayer may only determine overpaid tax when the paid tax is higher than the tax payable according to the terminal declaration.”
Accordingly, the CIT liability is considered overpaid when:
- The tax amount paid by Taxpayers higher than payable tax amounts for each type of tax liability with the same sub-item within 10 years from the day on which the amounts are paid to government budget.
- If terminal declarations must be made, the taxpayer may only determine overpaid tax when the paid tax is higher than the tax payable according to the terminal declaration.
2. Solution when overpaying provisional CIT Liability
Pursuant to Article 33, Clause 2, Circular 156/2013 / TT-BTC regulation about The taxpayer is entitled to settle the overpaid tax, late payment penalties, and fines in the following order:
“a) Offset the overpaid amount against the outstanding tax, late payment interest, or fines of the same tax according to Clause 1 Article 29 of this Circular (except for the case in Point b Clause 1 of this Article).
b) Offset the overpaid amount against the outstanding tax, late payment interest, or fines of the same tax according to Clause 1 Article 29 of this Circular (except for the case in Point b Clause 1 of this Article). If no liability is incurred after 06 months from the overpayment, instructions in Point c of this Clause shall be followed.
c) After following the instructions in Point a and Point b of this Clause, if the overpaid amount is not cleared, the taxpayer shall send a submit a claim for tax refund to the local tax authority in accordance with Chapter VII of this Circular.”
Accordingly, if the taxpayer has an overpaid tax amount, the tax offset or refund can be made as follows:
– Automatically offset against the payable amount of the next tax payment of each type of tax with the same economic content (sub-items) specified in the State budget index
– Overpaid CIT shall be refunded in the following cases:
+ If over 06 months from the time the overpaid tax arises but no further payable tax arises.
+ The taxpayer has overpaid tax, late payment interest, and fines, but still has tax, late payment interest, and fines.
– A tax refund dossier includes the following documents:
+ The application for tax refund, the procedures for refunding tax and offsetting refunded tax against government revenues are specified in form No. 01 / ĐNHT enclosed with Circular 156/2013 / TT-BTC.
To get into details for specific cases, please feel free to contact us as at:
Unit 602A, Tower A, Handi Resco Office Building
521 Kim Ma Street, Ba Dinh District, Hanoi
+ 84 24 3974 4181/ 4182
+ 84 24 3974 3090