I. TAX POLICY
1. If the company cannot separate the losses of each activity, the enterprise shall transfer the losses to the income of the activity enjoying corporate income tax incentives first, and then if there are still losses, transfer them to the income of the activity not enjoying corporate income tax incentives
Official Letter No. 5781/TCT-CS of the General Department of Taxation
The General Department of Taxation received Document No. CCG/CV20230621 dated June 21, 2023 of Cocreation Grass Corporation Vietnam Co., Ltd. (the Company) regarding the corporate income tax (CIT) policy on offsetting and transferring losses. Regarding this issue, the General Department of Taxation has the following opinion:
Clause 9, Article 18 of Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance guiding the implementation of Decree No. 218/2013/ND-CP dated December 26, 2013 of the Government stipulating and guiding the implementation of the Law on Corporate Income Tax stipulates:
“9. In the case that in the same tax period, an enterprise has business activities that are entitled to tax incentives and suffer losses, business activities that are not entitled to tax incentives, other income from business activities (excluding income from real estate transfer activities, investment project transfer; income from transfer of rights to participate in investment projects, transfer of rights to explore, exploit and process minerals according to the provisions of law) have income (or vice versa), the enterprise shall offset against the taxable income of income-generating activities selected by the enterprise. The remaining income after offset shall be subject to the corporate income tax rate at the tax rate of the income-generating activity.
In case the enterprise is incurring losses in previous tax periods (if it is still within the loss carryover period), the enterprise must carry forward the losses corresponding to the income-generating activities. If the enterprise cannot separate the losses of each activity, the enterprise shall carry forward the losses to the income of the activity that is entitled to corporate income tax incentives first, and then if there are still losses, it shall carry forward the losses to the income of the activity that is not entitled to corporate income tax incentives (excluding income from real estate transfer activities, investment project transfer activities; income from transfer of rights to participate in investment projects, transfer of rights to explore and exploit minerals according to the provisions of law).”
2. The company is not allowed to make additional tax declarations for the missing documents of the tax refund period for which a value-added tax refund decision has been issued
Official Letter No. 5847/TCT-KK of the General Department of Taxation responding to the problem of declaring missing documents for payment of VAT on imported goods.
The General Department of Taxation received Official Letter No. 1118/CTTTH-KK dated July 21, 2023 of the Thua Thien Hue Provincial Tax Department on declaring missing documents for payment of VAT on imported goods. Regarding this issue, the General Department of Taxation has the following comments:
Based on Point d, Clause 6, Article 1 of Law No. 31/2013/QH13 amending and supplementing a number of articles of the Law on Value-Added Tax No. 13/2008/QH12 regulating the deduction of input value-added tax;
Pursuant to Clause 3, Article 47 of the Law on Tax Administration No. 38/2019/QH14 on supplementary declaration of tax declaration dossiers;
Pursuant to Point b, Clause 4, Article 7 of Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government regulating tax declaration dossiers.
Pursuant to the above provisions, in the case of Huy Anh Phong Dien Rubber One Member Co., Ltd. (hereinafter referred to as “the Company”) in 2019, there was a payment document at the import stage but it was not declared on the VAT declaration. After that, the Company submitted a tax refund application for the tax period from January 2018 to March 2021; the tax authority conducted a pre-refund inspection and issued a tax refund decision, the Company is not allowed to supplement the tax declaration dossier. The Company shall comply with the provisions of Point d, Clause 6, Article 1 of Tax Law No. 31/2013/QH13 and Clause 3, Article 47 of Tax Administration Law No. 38/2019/QH14.
3. After the tax authority or competent authority has issued a conclusion or decision on tax handling after an inspection or examination at the taxpayer’s headquarters, if the taxpayer discovers errors in the tax declaration, if the additional declaration reduces the amount of tax payable, it shall comply with the regulations on handling tax complaints
Official letter No. 3691/TCT-CS of the General Department of Taxation
– Clause 3, Article 47 of Law No. 38/2019/QH14 dated June 13, 2019 of the National Assembly on Tax Administration stipulates the additional declaration of tax declarations as follows:
“3. After the tax authority or competent authority has issued a conclusion or decision on tax handling after an inspection or examination at the taxpayer’s headquarters, the supplementary declaration of tax declaration dossiers is regulated as follows:
b) In case the taxpayer discovers that the tax declaration dossier contains errors or omissions, if the supplementary declaration reduces the amount of tax payable or increases the amount of deductible tax, increases the amount of tax exempted, reduced or refunded, then the provisions on handling tax complaints shall apply….”
– Clause 13, Article 1 of Law No. 55/2019/QH14 dated November 26, 2019 of the National Assembly on amending and supplementing a number of articles of the Law on State Audit stipulates:
“13. Amend and supplement Article 69 as follows:
“Article 69. Complaints and settlement of complaints in state audit activities
1. Complaints and settlement of complaints in state audit activities shall be carried out in accordance with the provisions of this Law and other provisions of the Law on Complaints that are not contrary to the provisions of this Law.
4. The time limit for complaints is 30 days from the date the complainant receives the audit report, notice of audit results, notice of conclusions and recommendations of the State Audit…”
– Article 9 of Law No. 02/2011/QH13 dated November 11, 2011 of the National Assembly on complaints stipulates the time limit for complaints as follows:
“Article 9. Time limit for complaints
The time limit for complaints is 90 days from the date of receiving the administrative decision or knowing the administrative decision, administrative act….”
Based on the above provisions, in principle, after the tax authority or competent authority has issued a conclusion or decision on tax handling after an inspection or examination at the taxpayer’s headquarters, in case the taxpayer discovers errors in the tax declaration, if the additional declaration reduces the amount of tax payable, it shall be implemented in accordance with the regulations on handling tax complaints.
4. Organizations and individuals paying income to resident individuals who do not sign labor contracts with a total income payment of less than VND 2 million each time, such individuals are not required to deduct personal income tax before receiving income
Pursuant to Point i, Clause 1, Article 25 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance stipulates:
“Article 25. Tax deduction and tax deduction documents
1. Tax deduction
Tax deduction is the act of organizations and individuals paying income to deduct the amount of tax payable from the taxpayer’s income before paying the income, specifically as follows:
… i) Tax deduction in some other cases
Organizations and individuals paying wages, remuneration, and other payments to resident individuals who do not sign labor contracts (according to the instructions in Point c, d, Clause 2, Article 2 of this Circular) or sign labor contracts For individuals with income of less than three (03) months with a total income payment of VND 2 million (2,000,000)/time or more, tax must be deducted at a rate of 10% on the income before payment to the individual.
In case an individual has only one income subject to tax deduction at the above rate but the estimated total taxable income of the individual after deducting family circumstances is not enough to pay tax, the individual with income must make a commitment (according to the form issued with the tax management guidance document) to the income paying organization so that the income paying organization can temporarily not deduct personal income tax.
Based on the commitment of the income recipient, the income paying organization does not deduct tax. At the end of the tax year, the income paying organization must still compile the list and income of individuals who have not reached the tax deduction level (in the form issued with the tax management guidance document) and submit it to the tax authority. Individuals making commitments must be responsible for their commitments. In case of fraud, they will be handled according to the provisions of the Law on Tax Administration. Individuals making commitments according to the instructions in this point must register for tax and have a tax code at the time of commitment”
Based on the above provisions, in case an organization or individual pays income to a resident individual who does not sign a labor contract with a total income payment of less than VND 2 million each time, that individual is not subject to personal income tax deduction before receiving income.
At the end of the tax year, the income-paying organization shall compile a list and income of individuals who have not reached the tax deduction level as prescribed in Point i, Clause 1, Article 25 of Circular No. 111/2013/TT-BTC in the Appendix of the Detailed List according to Form No. 05-2/BK-QTT-TNCN issued with Appendix II of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Minister of Finance and submit it to the tax authority as prescribed. Source: Chinhphu.vn
5. Criteria for quarterly tax declaration for value added tax and personal income tax
Official Letter No. 2393/TCT-DNNCN of the General Department of Taxation on personal income tax declaration
– Clause 1, Article 9 of Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government stipulates:
“Article 9. Criteria for quarterly tax declaration for value added tax and personal income tax
1. Criteria for quarterly tax declaration
a) Quarterly value added tax declaration applies to:
a.1) Taxpayers subject to monthly value added tax declaration as prescribed in Point a, Clause 1, Article 8 of this Decree, if their total revenue from sales of goods and provision of services in the previous year is VND 50 billion or less, are allowed to declare value added tax quarterly. Revenue from sales of goods and provision of services is determined as the total revenue on the value added tax declarations of the tax periods in the calendar year.
b) Quarterly declaration of personal income tax is as follows:
b.1) Taxpayers who are subject to monthly declaration of personal income tax as prescribed in Point a, Clause 1, Article 8 of this Decree, if eligible to declare value added tax quarterly, may choose to declare personal income tax quarterly.
Based on the above provisions, in cases where state administrative agencies, public administrative agencies, party agencies, unions, socio-political organizations, etc. generate income from salaries and wages but do not generate revenue from the sale of goods and services, they are subject to quarterly declaration of personal income tax.
II. SOCIAL INSURANCE
1. Lost social insurance book, how to reissue it?
Vietnam Social Insurance answers this question as follows:
According to the provisions of Section a, Clause 1.1, Point 1, Article 27 of Consolidated Document No. 2525/VBHN-BHXH dated August 15, 2023 of Vietnam Social Insurance on the promulgation of a document consolidating the collection process of social insurance, health insurance, unemployment insurance, and occupational accident and disease insurance, the dossier in case the participant requests to reissue the social insurance book due to loss or damage includes: Application form for participation, adjustment of social insurance and health insurance information (Form TK1-TS).
Therefore, we request that you prepare an Application form for participation, adjustment of social insurance and health insurance information (Form TK1-TS) and submit it to the social insurance agency to be reissued the social insurance book. Source: Chinhphu.vn