MoF to revise regulations on temporary payments of Corporate Income Tax
The Ministry of Finance proposes to supplement and amend Decree 126/2020/ND-CP. Photo: H.D |
The HCM City National Assembly Delegation have said Decree 126/2020 stipulates that, "total corporate income tax temporarily paid of the three quarters of the tax year must not be lower than 75% of the payable amount, according to the annual tax finalization”.
In fact, some industries often achieve targets at the end of the year. However, revenue and profits of the fourth quarter cannot be predicted. If the tax payment is implemented in advance, businesses will face cash flow problems. Therefore, a document guiding Decree 126/2020 should be issued to facilitate businesses and avoid the shortcomings of the former regulations. 80% of the annual settlement must be paid in the fourth quarter.
For this matter, the MoF said, “after the decree took effect, there have been some opinions similar to those of the HCM City National Assembly Delegation. To create favorable conditions for businesses amid the turbulent development of the Covid-19 pandemic, the Government has issued Decree 52/2021, extending the payment deadline for VAT and Corporate income tax in 2021. Accordingly, businesses enjoyed an extension on the deadline for temporary payments of corporate income tax for the first and second quarter of 2021.
In the second and the third quarter of 2021, 23 provinces and cities applied social distancing measures. Many businesses in major economic areas had to suspend operations, which meant they did not raise temporarily payable Corporate Income Tax. In the fourth quarter of 2021, the Government took measures to prevent and control the public health crisis, allowing businesses to gradually resume operations. It is expected that the revenue from corporate income tax will increase in the last quarter of the year.
To support businesses, the MoF has asked the Prime Minister for permission to amend a number of articles of Decree 126/2020, including the regulations on temporary payments of Corporate Income Tax in the first three quarters of the year.
The Ministry has drafted a Decree amending and supplementing Decree 126/2020 and has sent it to ministries and government agencies for comments and to the Government for promulgation.
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