IMPLEMENTATION OF CORPORATE INCOME TAX OBLIGATIONS OF TOKYO CONSULTING CO , LTD

CIT is a direct tax, levied on the taxable income of the enterprise including income from the production and trading of goods, services, and other income as prescribed by law.. According

DECLARATION

I would like to assure you that this is my own research, the figures and results stated in the graduation thesis are honest from the actual situation of the internship unit

Thesis’s author

Pham Thi Minh Chau

THANK YOU

During my studies at the Academy of Finance and graduate thesis research, I received a lot of support from school, family, agencies, and friends

In order to complete the graduation essay, in addition to the serious investment of myself, I also received a lot of support and help from everyone

By the way, I would like to thank you: teachers at the Academy of Finance have imparted useful knowledge to me, especially Prof Dr Ly Phuong Duyen has guided my graduation thesis, and the manager and the staff at TOKYO CONSULTING CO., LTD helped me during my internship at the company

as well as provided the necessary documents for me to complete the thesis

My teachers, family and friends encouraged me in the process of the thesis

I appreciate the support, help, and encouragement from teachers, family and friends I'd like to thank you very much!

Thesis’s author Pham Thi Minh Chau

TABLE OF CONTENTS

DECLARATION i

THANK YOU ii

TABLE OF CONTENTS iii

LIST OF FIGURES vi

LIST OF TABLES vii

INTRODUCTION 1

1 Background 1

2 The purpose of the research thesis 3

3 Objects and scope of research 3

4 Research methods 3

5 The general structure of the topic 4

CHAPTER 1: BASIC THEORIES ABOUT THE IMPLEMENTATION OF CORPORATE INCOME TAX OBLIGATIONS AT ENTERPRISES 5

1.1 Overview of CIT 5

1.1.1 Definition characteristics of CIT 5

1.1.2 The role of CIT 6

1.1.3 Current regulations on CIT applicable to enterprises 7

1.2 CIT compliance obligations of enterprises 18

1.2.1 Overview of the enterprises 18

1.2.2 Obligations to comply with a corporate income tax of enterprises 21

1.3 Factors affecting the performance of CIT obligations 30

1.3.1 Public service quality 30

1.3.2 Level of corruption 30

1.3.3 Penalties for tax offenses 31

1.3.4 Tax administration 31

1.3.5 Tax legislation system and equity perspective 31

1.3.6 Compliance cost 31

1.4 The purpose to strengthen the implementation of CIT obligations 32

CHAPTER 2: AN EVALUATE THE IMPLEMENTATION OF CORPORATE INCOME TAX OBLIGATIONS AT TOKYO CONSULTING CO., LTD 34

2.1 Overview of Tokyo Consulting Co., Ltd 34

2.1.1 The process of information and development of business 34

2.1.2 Organization of the company's business activities 35

2.1.3 Characteristics of the company's the production and business activities 38

2.2 The status of the implementation of CIT obligations at Tokyo Consulting Co., Ltd 38

2.2.1 The status of registration 38

2.2.2 About the CIT declaration 39

2.2.3 CIT payment 43

2.2.4 CIT finalization 45

2.2.5 Accounting and use of voucher invoices 49

2.3 Achievements and limitations of enterprises in the implementation of CIT obligations 50

2.3.1 Results achieved 50

2.3.2 Limitations 52

2.3.3 Reasons 53

CHAPTER 3: SOLUTIONS TO IMPROVE THE IMPLEMENTATION OF CORPORATE INCOME TAX OBLIGATIONS AT TOKYO CONSULTING CO., LTD 55

3.1 Future business development trends 55

3.2 Some solutions 56 3.2.1 Specific solutions 56 3.2.2 Recommendations to complete the implementation of taxes at the company 57 CONCLUSION 59 REFERENCE 60

LIST OF FIGURES

LIST OF TABLES

Figure 2.1: Diagram of the company's management apparatus 36

Figure 2.2: Diagram of the company's accounting apparatus 37

Table 2.1: The situation of declaring the basis for calculation of CIT in 2019 40

Table 2.2: The situation of the CIT calculation in 2020 41

Table 2.3: Results of temporary CIT payment 44

Table 2.4: CIT calculation results of Tokyo Consulting Co., Ltd 46

Table 2.5: Results of CIT settlement 48

Table 2.6: Invoice usage situation 50

INTRODUCTION

1 Background

Taxation is a major and important source of revenue for the State budget, through this revenue the Government spends on public works and implementing social security To meet the needs of the country's integration development, the tax policy system has been gradually reformed and completed Since the implementation of the policy of innovation on, economic integration The State always creates legal corridors to promote production and business for different economic sectors in order to stabilize and develop people's lives and increase revenues for the state budget Therefore, paying taxes according to law is the right and obligation of individuals and organizations

In Vietnam, most businesses pay three main taxes: VAT, CIT, and PIT After completing the procedures for registration of the establishment of the company, the Department of Planning and Investment granted the business license and tax code, the enterprise must conduct the initial tax declaration dossier with the tax authority and pay the above taxes

CIT is a direct tax, levied on the taxable income of the enterprise including income from the production and trading of goods, services, and other income as prescribed by law However, tax is a direct revenue that is not refundable, so the self-awareness of the way the enterprise paying CIT is very difficult leading to a backlog, of tax debt Moreover, in recent years, the economic situation has been difficult due to the instability of the political and economic situation in the world along with difficulties from previous years that have not been thoroughly resolved such as the pressure on the economy's ability to absorb capital is not high; the pressure of bad debts is still heavy; domestic goods consumed slow; the management capacity and

competitiveness of the enterprise are low; therefore, businesses and business individuals also face many difficulties in business and financial activities, unable to fulfill their tax obligations, also leading to outstanding tax debts According to statistics from the Ministry of Planning and Investment of Vietnam, in 2020, the whole country has 134.9 thousand newly registered enterprises with a total registered capital of more than 2,235.6 trillion VND and a total number of registered employees of 1,043 thousand employees, a decrease of 2.3% of enterprises, an increase of 29.2% in registered capital , and a decrease of 16.9% in the number of employees over the previous year The average registered capital of a newly established enterprise in

2020 reached VND 16.6 billion, up 32.3% over the previous year If including 3,341.9 trillion dongs of additionally registered capital of 39.5 thousand enterprises registered to increase capital, the total additional registered capital in the economy this year is nearly 5,577.6 trillion dongs,

an increase of 39.3% over the previous year In addition, there were 44.1 thousand enterprises returning to operation, an increase of 11.9% compared

to 2019, bringing the total number of newly-established enterprises and enterprises returning to operation in 2020 to 179 thousand businesses, up 0.8% over the previous year On average, every month there are 14.9 thousand businesses newly established and returned to operation This shows that the dynamic business environment that Vietnam owns along with the open mechanism for business registration has created great conditions for small and medium enterprises to go into production and business Accordingly, in order to serve the study of the status of CIT obligations of small and medium-sized enterprises, during my internship at

the company, I chose the topic: "Implementation of corporate income tax

obligations of Tokyo Consulting Co., Ltd." as my graduation thesis

2 The purpose of the research thesis

The general objective of the thesis is to understand the obligations of CIT payment of the unit undergoing internships, learn the process and business, and provide solutions to solve the difficulties of the company in the process of fulfilling tax obligations These solutions will be proposed based

on the analysis and evaluation of the status of the implementation of CIT obligations of Tokyo Consulting Co., d in the period of 2019 - 2021

Specific objectives:

1 Clarify the nature of CIT

2 Systematize a number of theoretical and practical issues on the implementation of CIT obligations

3 Analyzing and evaluating the status of CIT obligations of Tokyo Consulting Co., Ltd in the period of 2019 - 2021, pointing out the successes, causes, and limitations and clarifying the factors affecting the performance of CIT obligations in Tokyo Consulting Co., Ltd in the past time

4 Proposing a number of solutions to strengthen the management and

implementation of CIT obligations in the coming time

3 Objects and scope of research

The subject of the study is the situation of the implementation of CIT obligations at Tokyo Consulting Co., Ltd

- Scope of content: Performance of CIT obligations to Tokyo Consulting Co., Ltd

- Scope of time: focus on researching figures from 2019 - 2021

- Research methods from reality: study data from the company collected, investigative research methods, observations Include:

+ Statistical - comparison method: using statistics from reports from the company's Finance - Accounting department, as a document for the evaluation of the results of operations, the situation of tax obligations at Tokyo Consulting Co., Ltd from which to make comments

+ Method of analysis - synthesis: From the information collected, conducting content analysis and evaluating the results achieved, the pros, cons and causes in the performance of CIT obligations at Tokyo Consulting Co., Ltd

5 The general structure of the topic

The thesis on the topic "The situation of implementation of CIT obligations of Tokyo Consulting Co., Ltd " consists of 3 chapters:

Chapter 1: Basic theories about the implementation of Corporate Income Tax Obligations at enterprises

Chapter 2: An evaluate the implementation of Corporate Income Tax Obligations at Tokyo Consulting Co., Ltd

Chapter 3: Solutions to improve the implementation of Corporate Income Tax Obligations at Tokyo Consulting Co., Ltd

With limited theoretical and practical knowledge and not much time to practice at the facility, in the process of researching inevitably defects, I look forward to receiving the advice and instructions of teachers, officials, civil

servants, tax officials, and friends to improve the article

CHAPTER 1 BASIC THEORIES ABOUT THE IMPLEMENTATION OF

CORPORATE INCOME TAX OBLIGATIONS AT ENTERPRISES

The Government often uses CIT to implement the economic and social objectives set out, so the elements of CIT such as: Incomes subject to income tax (scope of adjustment), deductible expenses, other income, tax rates, forms of exemption, CIT reduction partly reflects the state's policies in each given period

b Characteristics of corporate income tax

Firstly, CIT is a direct tax, so it carries all the advantages and

disadvantages of this tax, the payer of corporate income tax is businesses, investors of different economic sectors, and also tax beneficiaries

Second, CIT depends on the results of business activities of businesses

or investors Corporate income tax is determined on the basis of taxable income, so only when businesses and profitable business investors must pay corporate income tax

Third, the tax must be deducted before personal income tax

Fourth, CIT usually does not use progressive tax rates but uses flat tax rates Different tax rates may apply to different groups of subjects or certain

types of income depending on the current tax policy objectives

1.1.2 The role of CIT

- Corporate income tax is an important source of revenue for the State Budget

The scope of corporate income tax is very wide, including individuals, business groups, individual households, and economic organizations that produce and trade in profitable goods and services Meanwhile, the market economy of our country is growing and stable, economic growth is maintained and increasingly advanced; the subjects of production and business activities, and services, increasingly bringing more and more profits are able to mobilize financial resources for the State Budget through more and more abundant corporate income tax

- Corporate income tax is an important tool for the State to perform the function of redistribution of income, ensuring social justice

In terms of the economy in our country, all economic sectors have the right to freedom of business and equality on the basis of law Enterprises with

a highly skilled workforce and strong financial capacity, such enterprises will have the advantage and have the opportunity to receive high income; in

contrast to businesses with financial capacity, a limited workforce will receive low income, even no income In order to limit such disadvantages, the State uses corporate income tax as a tool to regulate the income of high-income entities, ensuring that the contribution requirements of business entities to the State budget are fair and reasonable

- Corporate income tax is an important tool to contribute to encouraging and promoting production and business development in the direction of the State's comprehensive planning, strategy, and development; is one of the important tools of the State in performing the function of regulating socio-economic activities in each given period of economic development

The State gives preferential treatment and incentives to investors and does business in sectors, sectors and regions, and regions in which the State has a strategy to prioritize development in certain periods

Corporate income tax is a tax that plays an important role in Vietnam's tax law system, in order to effectively promote the role of corporate income tax, we need to consider it in many aspects, including learning from foreign processing experiences

1.1.3 Current regulations on CIT applicable to enterprises

The basic content of CIT is regulated according to the following legal documents:

- The Law on Corporate Income Tax 14/2008/QH12 was promulgated on June 12, 2008 of the 12th National Assembly of the 3rd session and took effect from January 1, 2009 This Law replaces the Law on Corporate Income Tax No 09/2003/QH11

- Law No 32/2013/QH13 of the Law amending and supplementing a number of articles of the Law on Corporate Income Tax dated June 19, 2013, effective from January 1, 2014;

- Law No 71/2014/QH13 of the National Assembly: The Law amending and supplementing a number of articles of tax laws was promulgated on November 26, 2014 and took effect from January 1, 2015

And some decrees and circulars detail and guide implementation

1 Taxpayers

CIT taxpayers are organizations producing and trading goods and services with taxable income as prescribed, including:

- The enterprise was established in accordance with the laws of Vietnam

- Enterprises established in accordance with foreign laws with permanent establishments or no permanent establishments in Vietnam;

- Public non-business units, other than public production and trading of goods and services with taxable income;

- Organizations established and operating in accordance with Vietnamese law, business individuals who are taxpayers according to the method of deduction at source in case of purchasing services (including purchasing services associated with goods, purchasing goods supplied, distributed in the form of on-site import and export or under international trade terms) on the basis of conformity co-signing with foreign enterprises;

- Organizations established and operating under the Law on Cooperatives;

- Other organizations with production and business activities with taxable income

Taxable income = Assessable income - Exempt income - Losses carry forward

(1) Assessable income :

Taxable income in the tax calculation period is determined as follows:

Assessable income = Revenue - Deducted expenses + Other incomes

Taxable income includes: Income from production and business activities of goods and services; and other income

Taxable income from production and business activities:

- Enterprises established in accordance with Vietnamese law: taxable income arising in Vietnam and taxable income arising outside Vietnam;

- Foreign enterprises with permanent establishments in Vietnam: Taxable income incurred in Vietnam (related to or not related to the operation of permanent establishments) and taxable incomes arising outside Vietnam related to the operation of permanent establishments

- Taxable income arising in Vietnam of foreign enterprises (having permanent establishments or no permanent establishments in Vietnam) does not include income from services performed outside the territory of Vietnam such as: Repairing means of transport, machinery and equipment abroad; Advertising, marketing, investment promotion and trade promotion abroad; Brokers selling goods abroad; Training abroad; Divide the international post and telecommunication service charges to the foreign side

a Revenues calculated for assessable income:

Revenue for calculating taxable income is the full amount of goods; processing money, and service provision money including subsidies, surcharges, and drift surcharges that the enterprise is entitled to regardless of whether the money has been collected or not collected

b Cost: Includes deductible expenses and non-deductible expenses

- Deductible expenses: These are expenditures that simultaneously satisfy 3 conditions and are not included in the list of expenditures not deducted in accordance with law:

+ Actual expenditures incurred related to production and business activities of enterprises;

+ Expenditures with full invoices and valid and legal documents in accordance with law;

+ Expenses, if there are invoices for the purchase of goods and services each time with a value of VND 20 million or more (the price includes VAT) when making payment, must have non-cash payment documents Non-cash payment documents comply with the provisions of the legal documents on value-added tax

- Expenses are not deducted:

+ Depreciation of fixed assets in contravention of the law

+ The cost of raw materials, materials, fuel, energy, and goods partially exceeding reasonable consumption, loss, or damage has been compensated by organizations and individuals

+ Expenses of enterprises purchasing goods and services without invoices, are allowed to make a list of purchases of goods and services purchased but do not make a list enclosed with payment documents to establishments, sellers, providing services

+ Improper expenditure on costumes for employees

+ Expenditures that do not meet all conditions, except for the value of losses caused by natural disasters, epidemics, and other force majeure cases that are not compensated

+ Fines for administrative violations

+ Expenses are offset by other sources of funding

+ The portion of business management expenses allocated by foreign enterprises to permanent establishments in Vietnam exceeds the level calculated according to the method of allocation prescribed by Vietnamese law

+ The overspending portion in accordance with the provisions of the law

on provisions on provisions

+ The portion of interest payment of production and business loans of non-credit institutions or economic organizations exceeds 150% of the basic interest rate announced by the State Bank of Vietnam at the time of borrowing;

+ Pre-deductibles into expenses not in accordance with the provisions

of law;

+ Salaries and remunerations of private business owners; remuneration paid to the founders of enterprises not directly involved in the management of production and business; wages, remunerations, and other accounting expenses to pay employees but in fact do not pay or do not have invoices and documents as prescribed by law;

+ The portion of interest payment of the loan amount corresponds to the missing charter capital;

+ The portion of input value-added tax has been deducted, value-added tax paid according to the method of deduction, corporate income tax;

+ The portion of advertising, marketing, promotion, brokerage commissions, reception, inauguration, conference, marketing support, and

supporting costs directly related to production and business activities exceeds 15% of the total deductible expenditures The total deductible expenditures do not include the expenditures specified in this Point; for commercial activities, the total deductible expenditure does not include the purchase price of the goods sold;

+ Grants, except for grants for education, health, scientific research, disaster recovery, as great solidarity houses, benefactors, houses for policy subjects as prescribed by law, grants under the State's program for localities in areas with particularly difficult socio-economic conditions;

+ The portion of a voluntary retirement fund or social security fund, purchase of voluntary retirement insurance for employees in excess of the prescribed level as prescribed by law;

+ Expenditures of business activities: banking, insurance, lotteries, securities and some other specific business activities as prescribed by the Minister of Finance

c Other income

Other income is the taxable income in the taxable period in which this income is not in the industries, occupations, and business sectors included in the enterprise business registration, including:

+ Income from the capital transfer, securities

+ Income from real estate transfer

+ Income from the transfer of investment projects, from the transfer of the right to participate in investment projects, the right to explore, exploit and process minerals as prescribed by law; income from real estate transfer;

+ Income from the right to use and ownership of property including income from intellectual property rights, income from technology transfer as prescribed by law;

+ Income from the transfer, lease, liquidation of assets (except real estate), including other valuable papers;

+ Income from deposit interest, loan interest, and foreign currency sale including Deposit interest at credit institutions, loan interest in all forms as prescribed by law including late payment interest, installment interest, credit guarantee fee, and other fees in the loan contract; income from selling foreign currency; exchange rate difference due to reassessment of liabilities of foreign currency origin at the end of the fiscal year; exchange rate differences incurred during the period;

+ The pre-deductibles into expenses but not used or used up do not expire according to the set-up term but the enterprise does not account for cost reduction adjustments;

+ Collecting hard-to-claim debts that have wiped out accountants now claim; + Collecting liabilities that do not identify creditors;

+ The income from the business of previous years was omitted by the enterprise;

+ Gifts, gifts in kind, in money; income received from marketing support, cost support, bar discounts, promotional bonuses, and other supports + The difference between the collection of fines and compensations due

to violations of economic contracts or bonuses due to the good performance

of contractual commitments (excluding fines and compensations recorded to

reduce the value of works in the investment period) minus (-) the number of fines or compensation payments due to the breach of contracts as prescribed

by law;

+ Differences due to revaluation of assets as prescribed by law to contribute capital, transfer when dividing, separating, merging, consolidating, and transforming the type of enterprises

+ Income received from SSC activities outside Vietnam;

+ Other incomes as prescribed by law

d Exempt income

- Income from the implementation of technical services directly serving agriculture (income from irrigation and irrigation services; plowing, tilling the land, dredging canals, internal ditches; pest control services for crops and livestock; agricultural product harvesting services)

- Income from the implementation of scientific research contracts and technology development, products are in the experimental production stage, and products made from new technologies are first applied in Vietnam

- The non-dividend income of the socialization establishment in the field

of education - training, health, and other socialization fields left to invest in the development of such establishments in accordance with the specialized law on education - training, health, and other areas of socialization; the share

of income forming non-divided assets of cooperatives shall be established and operated in accordance with the Law on Cooperatives

- Income from vocational training activities exclusively for ethnic minorities, disabled people, children with special difficulties, objects of social evils

- Income is divided from capital contribution activities, joint ventures, links with domestic enterprises, after having paid corporate income tax as prescribed

- The grant is received for use in education, scientific research, culture, arts, charity, humanitarian, and other social activities in Vietnam

- Income from the transfer of emission reduction certificates (CERs) of enterprises that are certified to reduce emissions

- Income from the production and trading of goods and services of the enterprise has from 30% of the average number of employees in the year or more who are people with disabilities, post-detoxification people, people infected with the virus that causes human acquired immunodeficiency syndrome (HIV/AIDS) and have an average number of workers in the year of twenty or more people, does not include businesses operating in the field of finance and real estate business

- Income from technology transfer in the priority field of transfer to organizations and individuals in areas with particularly difficult socio-economic conditions

- Income from the performance of state-assigned tasks assigned by the Vietnam Development Bank in development investment credit activities, export credit; income from credit activities for the poor and other policy subjects of the Bank for Social Policy; income of state financial funds and other State funds operating not for profit purposes as prescribed by law; income of organizations in which the State owns 100% of charter capital established by the Government to handle bad debts of Vietnamese credit institutions

(2) The losses are transferred

The enterprise with the loss is transferred to the following year; these losses are deducted from taxable income The period of transferable losses shall not exceed five years, from the next year the loss arises

Enterprises with losses from real estate transfer, transfer of investment projects, transfer of rights to participate in investment projects after clearing if there are still losses and enterprises with losses from the transfer of exploration and mining rights are transferred losses to the following year into the taxable income of such activities The period of transfer of losses shall not exceed 5 years, from the next year the loss arises

* CIT rate

The general income tax rate for businesses from January 1, 2016, is 20% The CIT rate for the search, exploration, and exploitation of oil, gas and other rare resources in Vietnam is from 32% to 50% suitable for each project, each business establishment

1 Forms of tax incentives

2 Tax rate incentives

Since January 1, 2016, the corporate income tax rate is 20% However, there are preferential cases where the corporate income tax rate is only 10% and 17%; specifically as follows:

- Apply a tax rate of 10% for a period of 15 years in cases where:

- Apply a tax rate of 10% in the following cases:

- Apply a tax rate of 17% (from January 1, 2016) for a period of 10 years in the following cases:

- Apply a tax rate of 17% (from January 1, 2016) to people's credit funds and microfinance institutions

* The 17% tax rate will not apply to:

+ Income from capital transfer or transfer of capital contribution rights; income from real estate transfer, except social housing; income from the transfer of investment projects, the transfer of the right to participate in investment projects, the transfer of the right to exploration and exploitation of minerals; income from production and business activities outside Vietnam; + Income from search, exploration, exploitation of oil, gas, and other rare resources, and income from mining activities;

+ Income from service business is subject to special excise tax as prescribed by the Law on Excise Tax

3 Tax-free incentives

- Tax exemption for 4 years, 50% reduction of the amount of tax payable

in the next 9 years

- Tax exemption for 4 years, 50% reduction of the amount of tax payable

in the next 5 years on the income of enterprises from the implementation of new investment projects in the field of socialization in areas not in the list of areas with difficult or especially difficult socio-economic conditions

- Tax exemption for 2 years and 50% reduction of the amount of tax payable in the next 4 years on income from the implementation of new investment projects as prescribed and income of enterprises from the implementation of new investment projects in industrial parks (except for industrial parks located in the area with favorable socio-economic conditions)

- Enterprises with investment projects to develop investment projects operating in the field and areas of corporate income tax incentives in accordance with regulations on expanding production scale, improving capacity, and renovating production technology

The period of tax exemption and reduction shall be calculated from the five completed expansion investment projects put into production and business with income; in case there is no taxable income in the first three years, from the first year of revenue from the expanded investment project, the tax exemption and reduction period shall be calculated from the fourth year

1.2 CIT compliance obligations of enterprises

1.2.1 Overview of the enterprises

1.2.1.1 Concept of enterprises

An enterprise is an economic organization with its own name, having assets, having a stable trading headquarters, being registered for business in accordance with law for the purpose of carrying out business activities

1.2.1.2 Characteristics, classification of enterprises:

* Characteristics of the enterprises:

- Have regular business activities or service provisions The majority of

businesses are set up for the purpose of trading, buying, and selling goods that make a profit or providing services or both to serve the interests of consumers However, there are also some specific businesses, established and operating not for profit purposes These enterprises are mostly public-utility enterprises or social enterprises, established by the State and owned by the State, carrying out activities for the benefit of the community and society, such as enterprises in electricity, water, and public sanitation,

- Organized enterprises: Organization is shown in that the established

enterprise always has a human resources structure, has an operating organizational apparatus, has a trading or registration headquarters, and has its own assets to manage Therefore, the laws of many countries, including

Vietnam, stipulate the status of "legal entities" of most types of enterprises, except private enterprises that are associated with a business individual

- Legal enterprises: Enterprises that want to be recognized as a legal entity, participate in business activities, and take responsibility for their assets, must register legally, be recognized, be recognized, protected by law, and are bound by relevant legal regulations The legitimacy is expressed not only in the fact that the enterprise applies for registration and is licensed to establish and operate, so that the state recognizes the formation or existence

of the enterprise, but also in the fact that, when participating in social relations, the enterprise is also an independent entity and is responsible for its activities, with your own property This requires the business to be responsible for its financial obligations to pay off debts when it goes bankrupt

or dissolves

* Classification: Types of businesses under the law of enterprise today:

- Private enterprise: is an economic organization registered as prescribed

and conducts business activities A private enterprise owned by an individual, with assets, has a trading headquarters The private business owner is the representative under the Law and has full discretion overall business activities

of the company Normally, a private business owner will directly manage and run all the activities of the company, but this owner can still hire someone else to do this job on his behalf A private enterprise is an infinitely responsible company and has no legal status

- Limited liability company: the type of enterprise with legal status

recognized by law (Enterprise Law) The owner of the company and the company are two separate legal entities Before the law, the company has legal status from the date of issuance of the business registration certificate,

the owner of the company is multiplied by the rights and obligations corresponding to the ownership of the company

- One-member limited liability company: A one-member limited liability

company is a special form of limited liability company In accordance with Vietnamese law, a one-member limited liability company is an enterprise owned by an organization or an individual; the owner is responsible for the debts and other property obligations of the enterprise within the scope of the charter capital of the enterprise The owner of the company has the right to transfer all or part of the company's charter capital to other organizations and individuals A one-member limited liability company has legal status from the date of issuance of the business registration certificate A one-member limited liability company is not entitled to issue shares

- Joint Stock Company: A joint-stock company is a type of company in

which charter capital is divided into several equal parts called shares that are established and exist independently The joint-stock company must have a General Meeting of Shareholders, the Board of Directors, and the Director (General Director), for a joint-stock company with more than eleven shareholders must have a Supervisory Board Shareholders are solely responsible for the company's debts and other asset obligations within the amount of capital contributed to the company, have the freedom to transfer their shares to others, the minimum number of shareholders is three and there

is no limit to the maximum number Joint-stock companies have the right to issue securities in accordance with the law on securities

- Partnership: is a company in which at least two partnership members

must be the joint owners of the company, in addition to partnership members who may have contributed capital The contributing member is only responsible for the company's debts within the amount of capital contributed

to the company The partnership has legal status, the members have the right

to manage the company and conduct business activities on behalf of the company, together with taking responsibility and obligations of the company Members contributing capital are divided profit according to the ratio in the provisions of the company's charter, and the partnership members have equal interests when deciding on company management issues

1.2.1.3 The role of the enterprises

Fast-growing enterprises first bring high efficiency in solving jobs, raising incomes, and improving the quality of social life At the same time, business growth and development are decisive factors in the high growth and stability of the economy In particular, the strong development of enterprises has created a significant revenue source for the State Budget through the implementation of tax obligations

1.2.2 Obligations to comply with a corporate income tax of enterprises

1.2.2.1 Definition

Tax compliance of taxpayers means that taxpayers fully comply with tax obligations in accordance with the law, including activities of registration, declaration, reporting, and payment of taxes

1.2.2.2 Obligations to comply with CIT in the mechanism of self-assessment

- The mechanism of self-assessment of taxes is a tax administration mechanism in which taxpayers self-consciously based on the results of production and business in their declarations and based on the provisions of law determine their own tax obligations, declare and pay taxes to the SBV, take responsibility before law for the truthfulness and accuracy of the declaration on the basis of supervision inspection by competent agencies

+ The application of the mechanism of self-assessment of taxes in the current situation is very necessary and highly effective in tax administration reform, modernization of tax administration, promoting autonomy and self-awareness of implementing tax laws of tax-paying organizations and individuals The application of this mechanism will help reduce the pressure

on tax administration agencies not to carry out tax calculations or collect taxes but will give tax authorities more time to strengthen the inspection and supervision in time to detect errors and fraud in the tax payment process + In addition, the application of this mechanism has increased the rights

of organizations and individuals to pay taxes, be proactive in declaring, calculating, and paying taxes, increasing opportunities to protect their own interests At the same time, helps taxpayers see the objectivity in declaring and calculating taxes, not blaming tax authorities or the state for miscalculation of revenues The move to this mechanism is in line with the trend of reforming administrative management of the State in the direction of democracy, respecting and promoting self-awareness and self-responsibility before the law of the people

+ The mechanism of self-declaration, self-calculation, and self-payment

of taxes helps to create conditions for rearranging the intensive management apparatus according to the functions and specialization of each tax officer Thus, the implementation of tax management under this mechanism is necessary, objective, and in line with the trend of the times, especially in the period when our country is promoting administrative reforms

a, CIT registration

Tax registration is the first step for taxpayers to fulfill their tax obligations According to Article 30, taxpayers registering taxes together with

enterprise registration, cooperative registration, business registration, and tax registration dossiers are dossiers of enterprise registration, cooperative registration, and business registration as prescribed by law

b, CIT declaration

As of November 15, 2014, according to Article 17 of Circular No 151/2014/TT-BTC dated October 10, 2014, of the Ministry of Finance: Every quarter, enterprises do not have to submit quarterly provisional CIT declarations Based on the results of production and business, the enterprise shall temporarily pay the amount of CIT for the quarter No later than the 30th day of the next quarter the quarter incurs tax liability

- Responsibilities for submitting CIT declaration dossiers to tax

+ In case taxpayers have affiliated units but account for dependencies, such affiliated units do not have to submit CIT declaration dossiers; when submitting CIT declaration dossiers, taxpayers shall declare concentrated at the head office of the whole part arising at the affiliated unit

+ For economic groups and corporations with dependent accounting member units if they have accounted for taxable revenues, expenses, and incomes, the member units must declare the payment of CIT to the tax authorities directly managing the member units

+ In case the member unit has a business activity other than the general

business activities of the group, the corporation, and the separate accounting for income from such other business activities, the member unit shall declare CIT with the tax authority directly managing the member unit

+ Taxpayers shall submit CIT declaration dossiers on income from land use right transfer activities, and transfer land lease rights to local management tax departments where land transfers

- CIT declaration is the type of temporary declaration calculated

according to the quarter of settlement up to the time of termination of business activities, termination of contracts, conversion of forms of enterprise ownership, reorganization of enterprises and contracts:

+ Declaration of provisional CIT calculated according to each transfer of land use rights, transfer of land lease rights applicable to business organizations that do not arise regularly the transfer of land use rights or transfer of land lease rights

+ CIT declaration is calculated according to the ratio of income to revenue

on a monthly basis or according to the time of income generation of infrequent business people

+ Declaration of CIT deducted from monthly agent commissions

- Declaration of provisional CIT calculated quarterly:

+ Enterprises self-declare according to income into actual expenses incurred in the quarter for production and business as prescribed

+ In case the enterprise fails to declare the actual expenses incurred by the tax calculation period, the basis for calculating corporate income in the quarter is the ratio of taxable income to revenue of the previous year adjacent

If taxpayers have been inspected and inspected and the ratio of taxable income to revenue according to the inspection and inspection results of tax agencies is different from the rate of tax payment declared by taxpayers, they

shall apply according to the inspection and inspection results of tax authorities

+ In case the enterprise has a dependent crane production facility in other localities with the place where the head office is located:

Enterprises at the place where the head office is located shall declare and pay CIT on the amount of CIT incurred at the head office and at the dependent accounting production establishment

The basis for determining is: The amount of CIT paid quarterly, the cost ratio of the dependent accounting production establishment, and the enterprise determines the amount of CIT temporarily paid quarterly at the locality where the head office and the locality of the dependent production establishments

- Declaration of CIT according to each time arising the transfer of land

use rights, transfer of land lease rights:

+ Declaration of provisional CIT calculated according to each arising of land use right transfer, land lease right transfer for business organizations that do not arise regularly transferring land use rights or transferring land lease rights + For business organizations that regularly arise land use right transfer activities transferring land lease rights to pay taxes according to each arising time, tax declaration as organizations do not arise regularly the transfer of land use rights or transfer of land lease rights

- Declaration of CIT finalization:

Declaration of CIT finalization includes the declaration of CIT finalization of the year or the declaration of the finalization of CIT up to the time of termination of business activities, termination of contracts, transformation of forms of enterprise ownership, and reorganization of enterprises

- Declaration of CIT as a ratio of income to revenue:

Taxpayers who have complied with the provisions on invoices and vouchers for the sale of goods and services and identified CIT revenues but failed to identify expenses, taxable incomes, or incurred infrequent business revenues, used sales invoices provided by tax authorities, shall make CIT declarations according to the above income ratio taxable revenue

- Declaration of CIT deducted from agent commission:

Taxpayers assigned to households and individuals as agent services sold

at the right price, enjoying commissions are responsible for deducting the amount of CIT calculated as 5% on the commission paid to the agent (including the support expenses that the agent is entitled to under the contract signed with the taxpayer)

- CIT declaration dossier:

+ The dossier of provisional CIT declaration calculated quarterly is the quarterly CIT declaration

+ Dossiers of CIT declaration from land use right transfer and land lease right transfer are declarations of CIT on land use right transfer, land lease right transfer, and related documents

+ Dossiers of CIT finalization include:

CIT finalization declaration

Annual financial statements or financial statements up to the time of termination of business activities, termination of contracts, the transformation

of forms of enterprise ownership, and reorganization of enterprises

Other documents related to tax finalization

- Time limit for submission of tax declaration dossiers:

+ No later than the thirteenth day of the first month of the calendar year

or fiscal year for annual tax returns

+ No later than the 30th day of the next quarter of the quarter incurred

tax obligations for tax declaration dossiers temporarily calculating CIT by quarter

+ No later than the ninetieth day, from the end of the calendar year or the fiscal year for CIT finalization dossiers

+ No later than the tenth day, from the date of arising tax obligations for CIT declared and paid according to each time tax obligations arise

+ The time limit for submitting tax finalization dossiers for cases of termination of operation, termination of contracts, conversion of forms of enterprise ownership, or reorganization of enterprises is no later than the 45th day from the date of arising such cases

c, Payment CIT

Based on the results of production and business, taxpayers shall temporarily pay the CIT amount of the quarter no later than the thirtieth day

of the next quarter of the quarter incurred tax obligations

+ For enterprises that must make quarterly financial statements as prescribed by law, based on quarterly financial statements and the provisions of tax law to determine the amount of corporate income tax temporarily paid quarterly

+ For enterprises that do not have to make quarterly financial statements, enterprises shall base on the amount of corporate income tax of the previous year and expect production and business results in the year to determine the amount of corporate income tax temporarily paid quarterly

+ Corporate income tax (except corporate income tax on the transfer of foreign contractor's capital; monthly or separately declared corporate income tax on revenue specified in Point dd Clause 4 of this Article) The taxpayer shall calculate the provisional corporate income tax every quarter (including