How to determine the revenue below 200 billion to get 30% reduction of corporate income tax (CIT) in 2020?
Decree No. 114/2020 / ND-CP dated September 25th, 2020 of the Government detailing the implementation of the Resolution No. 116/2020 / QH14 of the National Assembly on reduction of corporate income tax payable of 2020 for enterprises, cooperatives, and other organizations
This Decree stipulates how to apply the 30% CIT reduction policy under the Resolution No. 116/2020 / QH14 of the National Assembly for enterprises with revenue in 2020 below 200 billion, regardless of type, big or small.
- Total revenue is determined to include all sales, processing costs, service charges including price subsidies, surcharges, and extra fees.
- If the business is newly established in 2020, the total revenue is calculated by multiplying the average monthly revenue with by 12 months.
- At the quarterly CIT period (currently only quarter 3 and 4), if the enterprise self-determine that the revenue for the whole year 2020 will not exceed VND 200 billion, it shall temporarily pay 70% of the tax payable of the quarter.
- When finalizing corporate income tax for the 2020, if the total actual revenue does not exceed VND 200 billion, a reduction of 30% of CIT for the whole year can be adjusted.
- Enterprises enjoying CIT incentives (if any) are also entitled to an additional 30% reduction of the payable CIT amount (if any).
The Decree takes effect from the effective date of Resolution No. 116/2020 / QH14 (August 3rd, 2020) and applies to the corporate income tax period of 2020.