Official Letter 71/TCT-CS 2025 on Corporate Income Tax Policy

Official Letter 71/TCT-CS 2025 on Corporate Income Tax Policy

Legislation

Official Letter 71/TCT-CS 2025 on Corporate Income Tax Policy

MINISTRY OF FINANCE
GENERAL DEPARTMENT OF TAXATION

__________

No.: 71/TCT-CS

Subject: Corporate Income Tax Policy

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
______________________

Hanoi, January 7, 2025

 

 

To: The Tax Department of Binh Phuoc Province

The General Department of Taxation has received Official Letter No. 3022/CTBPH-HKDCN dated September 6, 2024, from the Tax Department of Binh Phuoc Province regarding issues related to the corporate income tax (CIT) declaration for real estate transfers on a per-transaction basis in the case of Levahomes Joint Stock Company. The General Department of Taxation provides the following comments:

  • According to Points d, e, Paragraph 4, and Point b, Paragraph 6, Article 8 of Decree No. 126/2020/ND-CP dated October 19, 2020, by the Government (amended and supplemented by Clause 3, Article 1 of Decree No. 91/2022/ND-CP dated October 30, 2022):

Article 8. Taxes declared monthly, quarterly, annually, per-transaction tax obligations, and tax finalization:

  1. Taxes and other state budget revenues declared on a per-transaction basis, including:

    …
    d) Value-added tax (VAT) and corporate income tax (CIT) not arising regularly for taxpayers applying the direct method on the value-added basis as per the VAT law and revenue-based rates as per the CIT law; except in cases where taxpayers have multiple transactions within the same month, in which case, they may declare monthly.

    e) Corporate income tax on real estate transfers by taxpayers applying the revenue-based method as per the CIT law.

    …

  2. Taxes and fees filed for annual settlement or liquidation upon the dissolution, bankruptcy, termination of operations, termination of contracts, or corporate restructuring... Specifically:

    b) Corporate income tax (except CIT from foreign contractors' capital transfers; CIT declared under the revenue-based method for per-transaction or monthly obligations as per Point d, Paragraph 4 of this Article). Taxpayers must determine their quarterly provisional CIT payments (including any CIT allocation to provincial areas where dependent units or business locations, or transferred real estate are located, different from the taxpayer’s registered headquarters) and can deduct the amount already paid when finalizing their annual tax return.

  • According to Clause 2, Article 6 of Circular No. 88/2016/TTLT/BTC-BTNMT dated June 22, 2016, by the Ministry of Finance and the Ministry of Natural Resources and Environment:

Article 6. Documents to determine financial obligations when registering additional assets attached to land; changing land use forms; extending land use rights; transferring, inheriting, or donating land use rights and attached assets:

...2. The registration of the property transfer tax (original). The registration form for non-agricultural land use tax (if any), and the registration form for income from real estate transfers (except when the transferor is a real estate business) as per tax law (original, if applicable).

According to Points d, e, Paragraph 4, and Point b, Paragraph 6, Article 8 of Decree No. 126/2020/ND-CP dated October 19, 2020, by the Government regulating tax declarations on a monthly, quarterly, annual, per-transaction basis, and tax finalization: if the company declares CIT based on the revenue method and engages in real estate transfers, the company does not need to submit the CIT return for real estate transfers per transaction (Form 02/TNDN) but only needs to file the annual CIT finalization return (Form 03/TNDN) and make quarterly provisional CIT payments (if a taxpayer applies the revenue-based method for CIT, the CIT return for real estate transfers per transaction must be filed).

As per the guidance in Circular No. 88/2016/TTLT/BTC-BTNMT, "the income tax return for real estate transfers" is not a mandatory document when determining financial obligations related to real estate transfers.

Therefore, the regulations on CIT filing in Decree No. 126/2020/ND-CP do not affect the documents for determining financial obligations for taxpayers as per the guidelines in Circular No. 88/2016/TTLT/BTC-BTNMT.

The General Department of Taxation responds to inform the Tax Department accordingly.

 

Recipients:

  • As above;
  • Deputy General Director Dang Ngoc Minh (for reporting);
  • Relevant Divisions/Units: KK, PC;
  • TCT Website;
  • File: VT, CS (b).

On behalf of the General Director of Taxation

Deputy Director of the Policy Department

 

 

 

Manh Thi Tuyet Mai

See details here.