On June 18, 2014, the Ministry of Finance issued the Circular No. 78/2014/TT-BTC guiding the implementation of the Government’s Decree No. 218/2013/ND-CP of December 26, 2013, detailing and guiding the implementation of the Law on Enterprise Income Tax (EIT).
In accordance with this Circular, from January 01, 2014, the enterprise income tax is at the rate of 22% and from January 1, 2016, this enterprise income tax shall be 20%. Income from the transfer of real estate or investment projects; income from the transfer of the right to participate in investment projects or the right to explore, exploit and process minerals; except incomes of enterprises from implementing investment projects on construction of social houses for sale, lease or lease-purchase which enjoy the enterprise income tax rate of 10%.
Also in accordance with this Circular, In a tax period the Ministry of Finance allow an enterprise engaged in the transfer of real estate, investment projects or the right to participate in investment projects (excluding mineral exploration and exploitation projects) suffers a loss, it may offset this loss against the profit from its production and business activities.
For the losses from the transfer of real estate, transfer of investment projects or transfer of the right to participate in investment projects (excluding mineral exploration and exploitation projects) of 2013 and previous years which are still in the loss-carry forward duration, enterprises shall carry them forward to incomes from the transfer of real estate, investment projects or the right to participate in investment projects; if they cannot fully carry forward these losses, they may carry forward such losses to incomes from production and business activities (including also other incomes) of 2014 and subsequent years.
Enterprises established in accordance with the Vietnamese law (including cooperatives and non-business units) engaged in goods production or service provision activities and having an annual total turnover not exceeding VND 20 billion may be subject to the tax rate of 20%. An enterprise that has just been established for less than 12 months in a calendar year shall make declaration for temporary calculation of enterprise income tax at the rate of 22% except the cases eligible for the tax incentives. At the end of the fiscal year, if its average monthly turnover in the year does not exceed VND 1.67 billion, it shall finalize the payable enterprise income tax amount of the fiscal year at the tax rate of 20%.
For non-business units, other non-enterprise organizations established and operating under Vietnamese law, and enterprises paying value-added tax by the direct method which trade in goods or provide services liable to enterprise income tax and can determine the turnover from but cannot determine the costs of and incomes from these business activities, they shall declare and pay enterprise income tax at the percentage of the turnover from the sale of goods or services as 5% for services including interests from deposits and loans; 2% for education, health and art performance activities; 1% for goods trading and 2% for other activities.
This Circular takes effect on August 02, 2014.
