Circular No. 4594/BTC-TCT stipulates methods for handling foreign exchange rate differences in accounting and taxation for enterprises, distinguishing between differences arising during the period and at year-end. This document provides specific guidance on calculating and reporting these differences.
适用范围
Provincial Tax Departments; Enterprises
要点
- Enterprises must record foreign exchange rate differences arising during the period as revenue or expenses when calculating Corporate Income Tax (Article 1).
- Gains or losses from revaluation of monetary items denominated in foreign currency at year-end are not included in costs or income for Corporate Income Tax purposes and also cannot be distributed as profits or paid out as dividends (Article 1).
- The determination of costs and income when calculating Corporate Income Tax for foreign exchange rate differences in enterprises with foreign investment capital shall follow the guidance provided in Circular No. 55/2002/TT-BTC (Article 3).
- Enterprises may record foreign exchange rate differences from revaluation of monetary items denominated in foreign currency at year-end as financial expenses or income from financial operations on the annual financial results report (Article 1).
- Provincial Tax Departments must uniformly implement this guidance (Article 2).
🌐 本文件的社会影响
- Enterprises with foreign investment capital will be subject to specific Corporate Income Tax regulations for foreign exchange rate differences, creating favorable conditions for business activities.
- Not including gains or losses from revaluation of monetary items denominated in foreign currency at year-end as costs or income when calculating Corporate Income Tax helps reduce the tax burden on enterprises.
❓ 常见问题
Can enterprises include foreign exchange rate differences arising during the period in expenses when calculating Corporate Income Tax?
Yes, enterprises must record foreign exchange rate differences arising during the period as revenue or expenses when calculating Corporate Income Tax.
Are gains or losses from revaluation of monetary items denominated in foreign currency at year-end included in costs or income when calculating Corporate Income Tax?
No, gains or losses from revaluation of monetary items denominated in foreign currency at year-end are not included in costs or income for Corporate Income Tax purposes.
Can enterprises distribute profits or pay dividends on gains from revaluations of foreign exchange rate differences at year-end?
No, enterprises cannot distribute profits or pay dividends on gains from revaluations of foreign exchange rate differences at year-end.
What guidance is followed for determining costs and income when calculating Corporate Income Tax for foreign exchange rate differences in enterprises with foreign investment capital?
The determination of costs and income when calculating Corporate Income Tax for foreign exchange rate differences in enterprises with foreign investment capital follows the guidance provided in Circular No. 55/2002/TT-BTC.
What must Provincial Tax Departments do?
Provincial Tax Departments must uniformly implement this guidance.
全文
LETTER
OF THE MINISTRY OF FINANCE NUMBER 4594/BTC-TCT DATED APRIL 6, 2006
REGARDING THE HANDLING OF FOREIGN EXCHANGE RATE DIFFERENCES
RESPECTED: PROVINCE AND CITY DIRECT TAX AUTHORITIES.
The Ministry of Finance has received opinions from tax bureaus and enterprises requesting guidance on taxes related to foreign exchange rate differences for monetary items denominated in foreign currencies. Regarding this matter, the Ministry of Finance provides the following instructions:
BASED ON THE PROVISIONS OF Circular No. 105/2003/TT-BTC dated November 4, 2003, Circular No. 128/2003/TT-BTC dated December 22, 2003, and Circular No. 88/2004/TT-BTC dated September 1, 2004 of the Ministry of Finance:
- For foreign exchange rate differences (FXD) arising during the period (realized FXD): enterprises shall record revenue and expenses and include them in income or costs for calculating corporate income tax. Enterprises may distribute profits after fulfilling their tax obligations.
- For foreign exchange rate differences resulting from revaluation of monetary items denominated in foreign currencies at year-end: these should be recorded as financial expense or financial activity income on the annual financial results report. Enterprises shall not include such gains or losses due to year-end revaluation of foreign currency-denominated monetary items in costs or income for calculating corporate income tax, nor may they distribute profits or pay dividends based on year-end revalued FXD.
For the fiscal years 2002-2003, the determination of expenses and income for calculating corporate income tax related to foreign exchange rate differences in enterprises with foreign investment capital shall be carried out as per the guidance provided in Circular No. 55/2002/TT-BTC dated June 26, 2002 of the Ministry of Finance.
The Ministry of Finance instructs provincial and city direct tax authorities to implement uniformly.
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DEPUTY MINISTER OF FINANCE TRUONG CHI TRUNG |
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