Circular No. 170/2011/TT-BTC guiding the implementation of Decision No. 54/2011/QĐ-TTg dated October 11, 2011 of the Prime Minister on extending the payment of corporate income tax for 2011 for businesses employing many workers in certain industries to address difficulties and promote production and business activities.

CIRCULAR

Guidelines for Implementing Decision No. 54/2011/QD-TTg

dated October 11, 2011 of the Prime Minister

on extending the deadline for paying corporate income tax in 2011

of enterprises employing many workers in certain industries

to address difficulties and contribute to promoting production and business activities

____________________________

Pursuant to the Law on Corporate Income Tax and guiding documents;

Pursuant to the Law on Tax Administration and guiding documents;

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 54/2011/QD-TTg dated October 11, 2011 of the Prime Minister on extending the deadline for paying corporate income tax in 2011 of enterprises employing many workers in certain industries to address difficulties and contribute to promoting production and business activities;

The Ministry of Finance provides guidelines for implementing the extension of the deadline for paying corporate income tax as follows:

Article 1. General Provisions

1. Extending the deadline for paying corporate income tax in 2011 for a period of one (01) year from the date of the deadline for payment according to the provisions of the Law on Tax Administration for enterprises employing many workers, cooperatives (hereinafter referred to as enterprises), specifically as follows:

a) Corporate income tax payable in 2011 calculated based on income from production, processing, and manufacturing: agricultural products, forestry products, aquatic products, textiles, footwear, electronic components.

Production, processing, and manufacturing of agricultural products, forestry products, aquatic products, textiles, footwear, and electronic components as specified in this clause shall be based on the provisions of the System of Economic Sectors in Vietnam issued together with Decision No. 10/2007/QD-TTg dated January 23, 2007 of the Prime Minister.

b) Corporate income tax payable in 2011 calculated based on income from construction, installation, and erection: waterworks, power plants, transmission and distribution facilities; water supply and drainage systems; roads, railways; airports, seaports, river ports; bus stations, railway stations; schools, hospitals, cultural centers, cinemas, artistic performance venues, sports training and competition venues, wastewater treatment systems, solid waste disposal systems; telecommunications and irrigation works serving agriculture, forestry, and fisheries.

2. Enterprises employing many workers as stipulated in this Article are enterprises that have an average of over 300 employees regularly employed in 2011. In cases where enterprises are organized under a parent company-subcompany model, the number of employees used as the basis for determining the extension of the tax payment deadline for the parent company does not include the employees of the subcompanies.

The average number of regular employees in a year is determined according to the guidelines set forth in Circular No. 40/2009/TT-BLDTBXH dated December 3, 2009 of the Ministry of Labor, Invalids, and Social Affairs guiding the calculation of the number of regular employees as prescribed in Decree No. 108/2006/NĐ-CP dated September 22, 2006 of the Government detailing and guiding the implementation of certain provisions of the Investment Law.

3. The extension of the tax payment deadline stipulated in this Article applies to enterprises established and operating under Vietnamese law, implementing accounting records, invoices, and tax payments based on declarations.

Article 2. Determination of Corporate Income Tax Eligible for Extension

1. The corporate income tax payable in 2011 of enterprises eligible for extended tax payment is the provisional quarterly tax and the remaining tax payable after annual settlement for 2011.

2. Enterprises must separately account for income from activities eligible for extended tax payment as stipulated in Article 1 of this Circular. If it is not possible to determine the corporate income tax of the activities eligible for extended tax payment, the income for calculating the tax eligible for extension will be determined as a percentage (%) between the revenue from the activities eligible for extended tax payment and the total revenue of the enterprise. If the revenue ratio of the activities eligible for extended tax payment cannot be determined, the enterprise shall temporarily determine the percentage and notify the tax authority at the time of provisional payment and adjust according to actual figures when settling the tax for 2011.

Within the same period, if an enterprise meets multiple criteria for extended tax payment for corporate income tax in 2011, the enterprise may choose to apply the most favorable tax benefit as prescribed.

Article 3. Extension Period for Payment of Corporate Income Tax

The extension period for tax payment is one year from the date of the deadline for paying corporate income tax in 2011 according to the provisions of the Law on Tax Administration as follows:

1. The extension period for tax payment for the provisional tax of the first quarter of 2011 is until April 30, 2012.

2. The extension period for tax payment for the provisional tax of the second quarter of 2011 is until July 30, 2012.

3. The extension period for tax payment for the provisional tax of the third quarter of 2011 is until October 30, 2012.

4. The extension period for tax payment for the provisional tax of the fourth quarter of 2011 and the tax payable after annual settlement for 2011 is no later than March 31, 2013.

5. In cases where the tax payment deadlines specified in Clauses 1, 2, 3, and 4 of this Article fall on public holidays, the extension period for tax payment shall be extended to the next working day following the holiday.

6. For enterprises applying a different tax year than the calendar year, the extension of tax payment only applies to the provisional tax of quarters within the calendar year 2011. In cases where it is not possible to separately determine the revenue, expenses, and taxable income of each quarter within the calendar year, the tax eligible for extension must be paid based on the average monthly tax of the fiscal year multiplied by the actual number of months of operation within 2011 of the enterprise.

Article 4. Procedure for Extension of Tax Payment

1. For corporate income tax subject to extension arising from activities eligible for extended tax payment deadlines in 2011, enterprises eligible for extended tax payments shall prepare and submit quarterly provisional corporate income tax returns and annual final corporate income tax returns for 2011 in accordance with the Law on Tax Administration and related guiding documents. Enterprises shall supplement the following items before the declaration section in the provisional corporate income tax return and the annual final corporate income tax return:

- Corporate income tax eligible for extension pursuant to Decision No. 54/2011/QĐ-TTg;

- Corporate income tax still due for the period;

- Corporate income tax proposed to be offset against corporate income tax of non-extended activities or corporate income tax due for the next tax payment (if applicable);

- Corporate income tax proposed to be refunded by the tax authority due to prior payment (if applicable).

2. Enterprises eligible for extended corporate income tax payments that have declared and paid into the state budget according to the Law on Tax Administration the amount of tax eligible for extension for the first, second, and third quarters of 2011 shall have such tax already paid offset against corporate income tax due for non-extended activities or corporate income tax due for the next tax payment. Enterprises shall declare in the Extension of Corporate Income Tax Payment Declaration Form for the first, second, and third quarters of 2011 issued together with this Circular. In case when preparing the declaration form, enterprises still have corporate income tax eligible for refund, they shall prepare the Request for Refund of State Revenue Form No. 01/ĐNHT issued together with Circular No. 28/2011/TT-BTC dated February 28, 2011 of the Ministry of Finance guiding the implementation of certain provisions of the Law on Tax Administration, guiding the implementation of Decree No. 85/2007/NĐ-CP dated May 25, 2007 and Decree No. 106/2010/NĐ-CP dated October 28, 2010 of the Government to obtain the refund of tax. The Extension of Tax Payment Declaration Form and the Request for Refund (if applicable) must be submitted to the tax authority no later than January 31, 2012. The refund procedure at this clause shall be implemented in accordance with the guidance provided in Circular No. 28/2011/TT-BTC.

3. During the period of extended tax payment, enterprises will not be considered as violating late tax payment and will not be subject to administrative penalties for late tax payment for the extended tax amount. If enterprises have already paid fines for late payment of taxes declared on provisional corporate income tax returns for each quarter in 2011 as stipulated by the Law on Tax Administration, the tax refund specified in Clause 2 of this Article shall include the fine already paid (if applicable).

At the time of submitting the final corporate income tax return for 2011, if the extended tax amount is lower than the provisional tax amount declared and paid for four (4) quarters, the enterprise will be granted an extended tax payment deadline based on the final settlement. Enterprises may supplement their tax declaration forms on any working day, regardless of the deadline for submitting the next tax declaration form, but must do so before the tax authority or competent authority announces the decision to inspect or audit taxes at the taxpayer's place of business.

During the period of extended tax payment, enterprises eligible for extended tax payment deadlines who have not declared to be eligible for extension shall be granted an extension according to this Circular. Enterprises may supplement their tax declaration forms on any working day, regardless of the deadline for submitting the next tax declaration form, but must do so before the tax authority or competent authority announces the decision to inspect or audit taxes at the taxpayer's place of business.

During the period of extended tax payment, if through inspection or audit it is found that enterprises eligible for extended tax payments have not declared to be eligible for extension, enterprises shall be granted an extension of tax payment according to this Circular. Depending on the fault of the enterprise, the competent inspection or audit authority shall apply appropriate levels of tax law violation penalties as prescribed.

During the period of extended tax payment, if the competent inspection or audit authority finds that enterprises eligible for extended tax payment deadlines have a lower or higher extended tax amount compared to the self-declared amount, enterprises shall be granted an extension of corporate income tax based on the tax amount discovered through inspection or audit. Depending on the fault of the enterprise, the competent inspection or audit authority shall apply appropriate levels of tax law violation penalties as prescribed.

Article 5. Implementation and Effectiveness

1. This Circular takes effect from January 9, 2012 and applies to the extension of corporate income tax payment for 2011 as stipulated in Decision No. 54/2011/QĐ-TTg.

2. In the course of implementation, if there are any difficulties, organizations and individuals are advised to report to the Ministry of Finance for timely guidance and resolution./.