INCOME TAXABLE INCOME IN 2020

Circular 96/2015 / TT-BTC regulates the taxable income subject to CIT. So what are those taxable income? Below is the TASCO Tax Agent article we provide the answer to the above question.

LATEST INCOME TAXABLE INCOME

What does taxable income include? Current regulations on income subject to CIT, other income subject to CIT are current.

How to determine the income subject to CIT:

Pursuant to Article 2 of Circular 96/2015 / TT-BTC stipulates the determination of taxable income as follows:

Taxable income in a tax period includes income from goods and service production and business activities and other income.

Taxable income in a tax period is determined as follows:

Taxed income = (Revenue - Deductible expenses) + Other income

The method of determining the above items is as follows:

1. Turnover for EIT calculation:

Income from goods and service production and business activities:

= Turnover of production and business activities of goods and services - Deductible expenses.

Related articles: Revenue subject to CIT and time to determine CIT

2. Deductible expenses:

Provisions in Article 4 of Circular 96/2015 / TT-BTC amending and supplementing Article 6 of Circular No. 78/2014 / TT-BTC (amended and supplemented in Clause 2, Article 6 of Circular No. 119/2014 / TT -BTC and Article 1 of Circular No. 151/2014 / TT-BTC).

3. Other income subject to CIT:

Pursuant to Article 5 of Circular 96/2015 / TT-BTC, Article 7 of Circular No. 78/2014 / TT-BTC and Article 2 of Circular 151/2014 / TT-BTC stipulates other taxable incomes as follows:

1. Incomes from capital or securities transfer under the guidance in Chapter IV of Circular 78.

Incomes from real estate transfer as guided in Chapter V of Circular 78.

3.Incomes from transfer of investment projects; transfer the right to participate in an investment project; transfer the right to explore, exploit and process minerals in accordance with the law

4.Incomes from property ownership and use rights, including royalties in any form of payment for property ownership or use rights; income on intellectual property rights; income from technology transfer as provided for by law.

Income from royalties of intellectual property or technology transfer is determined by the total proceeds minus (-) the cost price or the costs of creating intellectual property rights or technology transferred, minus (- expenses for maintaining, upgrading and developing intellectual property rights, technology transferred, and other deductible expenses.

5.Incomes from property leasing in any form.

- Income from asset lease is determined by the revenue from asset lease minus (-) expenses: depreciation, maintenance, repair, maintenance, asset lease. for sublease (if any) and other deductible expenses related to the lease of property.

6.Incomes from property transfer, liquidation (except real estate), other valuable papers.

This income is determined by (=) revenue earned from the transfer or liquidation of assets minus (-) residual value of assets transferred or liquidated at the time of transfer or liquidation. and deductible expenses related to the transfer or liquidation of assets

7. Income from deposit interest, loan interest includes deferred interest, installment interest, credit guarantee fee and other fees in loan contract.

- If the income from deposit or loan interests is higher than the loan interest payments as prescribed, after clearing, the remaining difference will be included in other income when determining the payable income. tax.

- In case the arising interest from deposit or loan interest is lower than the loan interest payments as prescribed, after clearing, the remaining difference will be deducted from the main business income when determine taxable income.

8. Income from the sale of foreign currency: equal to the total proceeds from the sale of foreign currency minus

(-) the total purchase price of the amount of foreign currency sold.

9. Income from exchange rate difference is determined as follows:

In the tax year, the enterprise has exchange difference arising in the period and exchange difference due to reassessment of foreign currency liabilities at the end of the fiscal year:

- The exchange rate difference arising in the period directly related to the turnover and expenses of the main production and business activities of the enterprise shall be included in the expenses or income of the main production and business activities of the enterprise. .

The exchange rate difference arising in the period is not directly related to the revenue or expenses of the main production and business activities of the enterprise.If there is a loss, the exchange rate difference will be included in financial expenses, if incurred. Interest rate difference is included in other income when determining taxable income.

- Interest rate differences due to reassessment of liabilities payable in foreign currencies at the end of the fiscal year shall be offset against exchange rate difference losses due to reassessment of liabilities payable in foreign currencies at the end of the fiscal year.

After clearing the exchange rate difference profit or loss directly related to the revenue, the expenses of the main production and business activities of the enterprise shall be included in the income or expenses of the main production and business activities of the enterprise. Karma.

Exchange rate difference gains or losses that are not directly related to the revenue or expenses of the main production and business activities of the enterprise shall be included in other income or financial expenses when determining taxable income.

For debts receivable and loans denominated in foreign currencies arising in the period, the exchange rate difference is included in deductible expenses or income as the difference between the exchange rate at the time of debt collection. or recover the loan at the rate at the time the receivable or loan was initially recognized.

The above exchange rate differences do not include exchange rate differences due to reassessment of the year-end balance: cash, deposits, money in transit, foreign currency receivables.

10. Bad debts written off now recovered.

11. Payable debts of unidentifiable creditors.

12. Income from production and business activities of the previous years is overlooked discovered.

13) In case the enterprise has revenues of fines, compensation due to breach of the contract by the partner or the bonuses due to good performance of the contractual commitments, higher than the payment of fines, compensation due to contract violation (these fines are not in the fines for administrative violations in accordance with the law on handling of administrative violations), after clearing, the remaining difference shall be included in other income. .

- In case the enterprise has the income of fines, compensation due to breach of the contract by the partner or the bonuses due to good performance of the contractual commitments, the amount of money is lower than the payment of fines or compensation due to contract violation (these fines are not in the fines for administrative violations in accordance with the law on handling of administrative violations), after clearing, the remaining difference will be deducted from the income. other.

- If the unit does not generate other income, it may be deducted from the income from production and business activities.

The above revenues from fines and compensation do not include the fines and compensation that decrease the value of the work in the investment period.

14.Difference due to reassessment of assets in accordance with the provisions of law for capital contribution, asset transfer upon division, separation, consolidation, merger or conversion of enterprise type (except for equitization, reorganization and renewal of enterprises with 100% state capital), specifically determined as follows:

a) Increase or decrease difference due to reassessment of assets is the difference between the revaluation value and the residual value of assets recorded in accounting books and lump-sum calculation to other income (for difference increase) or decrease other income (for reduced difference) in the tax period when determining taxable income of corporate income tax at the enterprise having revalued assets.

b) The difference increases or decreases due to reassessment of land use right value to: contribute capital (to which the enterprise receiving the value of land use rights shall be gradually allocated the land value to deductible expenses), transferred when dividing , splitting, consolidating, merging, transforming type of business, contributing capital to investment projects to build houses and infrastructure for sale, for lump-sum calculation into other income (for increased difference) or deduction of revenue other income (for reduced difference) in the tax period when determining taxable income of enterprise income at enterprises having reassessed land use rights.

Particularly, the increase in difference due to reassessment of land use right value to contribute capital to enterprises to form fixed assets for production and business, enterprises receiving the value of land use rights are not amortized and must not be amortized. amortizing land value into deductible expenses, this difference shall be gradually calculated into other income of enterprises having revalued land use rights within a maximum period of 10 years starting from the year of right value land use is contributed as capital. Enterprises must notify the number of years they will allocate to other income when submitting dossiers of CIT finalization of the year they start to declare this income (the year when land use right value is reassessed. capital contribution).

In case the enterprise continues to transfer the contributed capital with the value of the land use right after contributing capital (including the case of transferring contributed capital 10 years before the time limit), the income from the transfer of contributed capital is equal to the value of land use rights to calculate and declare and pay tax according to real estate transfer income.

The difference due to reassessment of land use rights includes: For long-term land use rights, it is the difference between the reassessment value and the land use right value recorded in the accounting books; For land use rights with definite term, it is the difference between the revalued value and the unallocated residual value of land use rights.

c) Enterprises receiving assets contributed as capital or assets transferred upon division, separation, consolidation, merger or transformation of enterprises may depreciate or amortize them gradually to expenses at the revaluation price (minus in case the value of land use rights are not amortized or allocated to expenses as prescribed).

15. Presents and gifts in cash or in kind; income received in cash, in kind from donor sources; Incomes received from marketing assistance, cost support, payment discounts, promotional bonuses and other grants, the value of in-kind is determined by the value of the in-kind. equal to the value of equivalent goods or services at the time of receipt.

16. Amounts, assets, and other material benefits received by the enterprise from organizations and individuals under the agreement or in a contract in accordance with civil law, and shall be handed over the old land location by the enterprise. relocation of the production and business establishment after deducting related expenses such as relocation costs (transportation and installation costs), residual value of fixed assets and other costs (if any).

Particularly for the money, assets and material benefits received by enterprises according to the State's policies, approved by the competent State agencies for relocation of production establishments, they shall be managed and used according to regulations. relevant laws.

17. Accrued expenses which are not used or are not used up according to the appropriation term but the enterprise does not account for cost reduction; reimbursement of construction work warranty reserves.

18. Incomes related to the consumption of goods and services which are not included in revenue such as: award for fast ship release, bonuses for serving in the catering industry, hotel after deducting expenses fees to generate that income.

19. Income from consumption of scrap and rejects, after deducting the cost of recovery and consumption, is determined as follows:

- In case an enterprise generates income from the sale of scrap and defective products generated during the production of products enjoying CIT incentives, this income is eligible for tax incentives. enter a business.

- In case the enterprise generates income from the sale of scrap and defective products generated during the production of products not entitled to corporate income tax incentives, this income shall be included in other income. .

20. For the refund of import tax or export tax of goods actually exported or imported arising immediately in the year of settlement of enterprise income tax, expenses shall be deducted in that settlement year.

In case the import or export tax refund of goods actually exported or imported arises in the previous years of settlement of enterprise income tax, it shall be included in other income of the settlement year in which the income is generated.

This income is directly related to the production and business sectors that are enjoying CIT incentives. This income is entitled to corporate income tax incentives.

If this income is not directly related to the production and business sector and is entitled to CIT incentives, this income is included in other income.

21. Incomes from domestic capital contribution of shares, joint ventures or economic associations shall be divided from income prior to payment of corporate income tax.

22. In case the enterprise accepts new capital contributors according to the provisions of law, the amount of capital contributed by the new capital contributor is higher than the value of that member's contributed capital out of the total charter capital of The enterprise is handled as follows:

If this higher difference is determined to be owned by the enterprise and added to the business capital, it will not be included in taxable income to calculate the corporate income tax of the enterprise receiving the capital contribution.

If this higher difference is divided among the former capital contributors, the difference is the income of the former capital contributors.

23. Other income as provided for by law.

See also: Circular 78/2014 / TT-BTC guiding the implementation of Decree 218/2013 / ND-CP on corporate income tax.

Circular 151/2014 / TT-BTC guiding the implementation of Decree No. 91/2014 / ND-CP.

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