How to avoid late Corporate Income Tax payment?

Overpayment of corporate income tax (CIT) occurs frequently in many enterprises. So what is the procedure for offsetting overpaid CIT, overpaid late payment fees, and overpaid fines? Enterprises should take note to protect their interests and make accurate declarations to avoid late Corporate Income Tax payment.

1. Deadline for payment of corporate income tax

According to the provisions of the Law on Taxation, enterprises and units are required to pay taxes within the prescribed time limit. Specifically, based on the provisions of Article 55, Law on Tax Administration 2019, the deadline for payment of corporate income tax is as follows:

  • Deadline for payment of provisional corporate income tax by quarter: payment no later than the 30th day of the first month of the following quarter.
  • Deadline for payment of provisional corporate income tax by year: payment no later than March 30 of the following year.
  • Deadline for payment of final corporate income tax: payment no later than March 31 of the following year.

Note:

  • In the case of newly established enterprises and units, the deadline for payment of provisional corporate income tax for the first quarter is 10 days from the date of commencement of business.
  • In the case of enterprises and units declaring tax by the direct method, the deadline for payment of provisional corporate income tax for the quarter is the 30th day of the month following the quarter in which the tax obligation arises.

For Corporate Income Tax declaration by the deduction method, the deadline for provisional quarterly Corporate Income Tax payment is the 30th day of the month following the quarter in which the tax liability arises and March 30 of the following year for the annual CIT calculation period.

Deadline for provisional quarterly Corporate Income Tax payment

In case of late Corporate Income Tax payment, enterprises will be subject to administrative penalties according to the provisions of Decree 125/2020/ND-CP. Enterprises must pay taxes on time to avoid penalties, the maximum penalty is up to 2% of the late tax amount for each day of late payment.

2. Cases of offsetting Corporate Income Tax payment

Cases of offsetting excess CIT and excess late payment fees, excess fines are based on Clause 1, Article 25, Circular 80/2021/TT-BTC dated September 29, 2021. Accordingly, the cases that are eligible for Corporate Income Tax payment offset include:

  • Taxpayers with excess corporate income tax paid compared to the amount payable.
  • Taxpayers with excess late payment of corporate income tax, excess corporate income tax penalty.

Cases of excess corporate income tax payment as prescribed in Clause 1, Article 60 of the Law on Tax Administration shall be offset or refunded.

The excess corporate income tax amount that is offset against the amount payable in the same sub-item of the next period must satisfy the following conditions:

  • The excess corporate income tax amount must be in the same sub-item as the amount payable in the same sub-item.
  • The excess corporate income tax amount must still be within the payment deadline.
  • The excess corporate income tax amount must still be within the validity period of the payment receipt.

Tips to offset Corporate Income Tax payment

3. How is Corporate Income Tax declaration revenue determined?

Pursuant to Article 8 of Decree 218/2013/ND-CP, taxable revenue for corporate income tax is clearly stipulated as follows:

– Revenue for calculating taxable income is the total amount of sales, processing fees, service provision fees including subsidies, surcharges, and additional fees that the enterprise is entitled to, regardless of whether the money has been collected or not.

  • For enterprises declaring and paying value added tax according to the tax deduction method, taxable revenue for corporate income tax is revenue without value added tax.
  • For enterprises declaring and paying value added tax according to the direct method on added value, taxable revenue for corporate income tax includes value added tax.

– The time to determine revenue for calculating taxable income for goods sold is the time of transferring ownership and right to use the goods to the buyer.

The time to determine revenue to calculate taxable income for services is the time of completion of service provision to the buyer or the time of issuing service provision invoices.

– Revenue to calculate taxable income for some specific cases, see details in Clause 3, Article 8, Decree 218/2013/ND-CP and Clause 3, Article 5, Circular 78/2014/TT-BTC.

Above are the basic regulations on Corporate Income Tax declaration that accountants and businesses need to understand clearly in the production and business process. If you have any questions, please call the hotline for advice about Corporate Income Tax payment. In addition, to understand more about what tax is, readers can refer to other articles of S4B Vietnam!

>>>Read more: The basic difference between tax examination and tax inspection

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