Jan. 11 – At the end of the year, in addition to completing corporate income tax (CIT) finalization, enterprises must complete personal income tax (PIT) on behalf of their employees.
Following the finalization process at the end of the fiscal year, or when terminating the investment project in Vietnam, foreign investors are allowed to remit profits abroad.
Corporate Income Tax
Although corporate income tax (CIT) is declared and paid quarterly, enterprises must still conduct CIT finalization at the end of the year.
The standard tax year is the duration of one calendar year. If a different year is applied, the enterprise must inform the local tax agency.
If no tax liability arises during this period, or the enterprise is eligible for incentives and/ or tax deductions, the enterprise must still complete tax filings with the competent tax authorities in accordance with the prescribed time limit (unless tax-generated activities are terminated or the enterprise has ceased business operations and no tax responsibilities have arisen).
Taxable income includes any income from production, trading activities, services and other income, whether or not that income has been generated within Vietnam. The enterprises with production/trading activities and/or services that generate a taxable income qualify as taxpayers.
Taxpayers must calculate the payable tax, unless in special cases where the tax agency has fixed or determined the tax amount in accordance to the laws on tax management. Taxpayers are required to prepare an annual CIT return which must include a section for making adjustments between accounting profits and taxable profits. The total amount of CIT should be finalized after the addition or deduction of any elements that cannot be declared in the quarterly declaration, such as takeover of unexpected expenses or profits, and reporting losses of previous years.
If the taxpayer has depending branches in different provinces, it should submit only one CIT finalization dossier. However, manufacturing enterprises must allocate the payable tax amount to the tax agencies in provinces where the branches are located depending on the expenditure portion of each branch of the enterprise.
