Regulations on temporary payment of CIT for 4 quarters not less than 80% of the year

Decree 91, which was issued by the Government and took effect on 30.10, abolished the regulation that the amount of corporate income tax temporarily paid in the first three quarters of the year must not be less than 75% of the annual finalized tax amount. Join TASCO to learn more about the new regulation on temporary payment of CIT for four quarters, not less than 80% of the year.

🔅 On the evening of October 30, the General Department of Taxation said that the Government had issued Decree No. 91 amending and supplementing a number of articles of Decree No. 126 in 2020 detailing a number of articles of the Law on Tax Administration. An important content that has been particularly expected by the business community for more than a year is the revised provision on the rate of corporate income tax payment.

🔅 Pursuant to Decree 91, the total amount of temporarily paid corporate income tax for four quarters must not be less than 80% of the payable corporate income tax according to the annual finalization.

🔅 Example: In 2022, an enterprise has the following quarterly CIT temporarily payable:

✔ First quarter: 15 million VND

✔ Second quarter: 7 million VND

✔ Third quarter: 5 million VND

✔ Fourth quarter: 13 million VND

⇒ Total CIT payable by enterprises in 2022 is 15 + 7 + 5 + 13 = 40 million.

⇒ Therefore, the total amount of temporarily paid CIT for the four quarters must not be less than 32 million.

🔅  If the deadline for the temporary payment of corporate income tax for four quarters is January 30 of the following year, the tax amount temporarily paid for four quarters is less than 80% of the annual settlement amount, the enterprises will have to pay late payment interest on the underpaid tax amount.

🔅  Note:

➣As of October 30, 2022, for taxpayers whose tax amount temporarily paid for the first 3 quarters of the tax year 2021 is not lower than 75% of the payable amount according to the annual finalization, then the provisions on the rate of temporary payment for four quarters in Clauses 3, 4 and 5, Article 1 of Decree No. 91/2022/ND-CP shall not apply (must not be less than 80% of the payable amount according to the annual finalization).

➣ For example: In 2021, the enterprise temporarily pays CIT as follows:

✔ Profit in 2020 (no loss to carry over to next year)

✔ Quarter I/2021: Profit 12 million VND

✔ Quarter II/2021: Profit 10 million VND

✔ Quarter III/2021: Profit 5 million VND

✔ Quarter IV/2021: Profit 3 million VND

⇒ The amount of tax temporarily paid in the first 3 quarters of the tax period is 12 + 10 + 5 = 27 million

⇒ Tax payable according to the annual finalization is 12 + 10 + 5 + 3 = 30 million

⇒ Thus, the temporarily paid tax amount for the first 3 quarters of the tax period is 27 million, which is more than 75% of the tax payable according to the final settlement.

⇒ Therefore, this enterprise is not allowed to apply the provision that the rate of temporary payment of CIT for four quarters is not lower than 80% of the year.

🔅  As of October 30, 2021, enterprises whose temporary tax payment for the first three quarters of 2021 is lower than 75% of the year's payable tax amount may apply the four-quarter temporary payment rate not lower than 80% of the payable income tax amount of the year, if not increase the amount of late payment.

🔅  For example: In 2021, the enterprise temporarily pays CIT as follows:

✔ Quarter I/2021: Profit 12 million VND

✔ Quarter II/2021: Profit 10 million VND

✔ Quarter III/2021: Profit 5 million VND

✔ Quarter IV/2021: Profit 13 million VND

⇒ The amount of tax temporarily paid in the first 3 quarters of the tax period is 12 + 10 + 5 = 27 million

⇒ Tax payable according to the annual finalization is 12 + 10 + 5 + 13 = 40 million

⇒ Thus, the temporarily paid tax in the first 3 quarters of the tax period is 27 million, which is 75% lower than the payable tax amount according to the final settlement.

⇒ Therefore, this enterprise is allowed to apply the provision that the rate of temporary payment of CIT for four quarters is not lower than 80% of the year.

⇒ If you have any questions, please register here for TASCO's earliest advice or contact hotline: 0975480868 (Zalo)

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