Circular No. 52/2011/TT-BTC guiding the implementation of Decision No. 21/2011/QD-TTg dated April 6, 2011 of the Prime Minister on extending the payment period for corporate income tax of small and medium enterprises to address difficulties and contribute to promoting economic development in 2011.

CIRCULAR

Guidelines for implementing Decision No. 21/2011/QĐ-TTg dated April 6, 2011 of the Prime Minister on extending the deadline for paying corporate income tax for small and medium-sized enterprises to address difficulties and contribute to promoting economic development in 2011 Pursuant to the Law on Corporate Income Tax and guiding documents;

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Pursuant to the Law on Tax Administration and guiding documents;

Pursuant to Decision No. 21/2011/QĐ-TTg dated April 6, 2011 of the Prime Minister on extending the deadline for paying corporate income tax for small and medium-sized enterprises to address difficulties and contribute to promoting economic development in 2011;

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;

The Ministry of Finance provides guidelines for implementing the extension of the deadline for paying corporate income tax for small and medium-sized enterprises as follows:

1. Extending the deadline for paying corporate income tax for a period of one year from the date of expiration of the payment deadline stipulated in the Law on Tax Administration for the corporate income tax payable in 2011 by small and medium-sized enterprises, including cooperatives (hereinafter referred to collectively as small and medium-sized enterprises).

Article 1. General Provisions

Small and medium-sized enterprises eligible for the extended tax payment period under this clause are those that meet the criteria regarding capital or labor as prescribed in Clause 1, Article 3 of Decree No. 56/2009/NĐ-CP dated June 30, 2009 of the Government on assistance for the development of small and medium-sized enterprises.

The capital basis for determining eligibility for the extended corporate income tax payment period in 2011 is the capital reflected in the Balance Sheet prepared as of December 31, 2010 by the enterprise. In cases where small and medium-sized enterprises were newly established from January 1, 2011, the capital basis for determining eligibility for the extended corporate income tax payment period in 2011 is the registered capital recorded in the Business Registration Certificate or Investment Certificate issued for the first time.

The average annual number of employees is determined based on the total number of regular employees (excluding short-term contracts under three months) as of December 31, 2010 at the enterprise. In cases where enterprises were newly established from January 1, 2011, the average number of employees serving as the basis for determining eligibility for the extended corporate income tax payment period in 2011 is the number of employees receiving wages or remuneration in the first month (with thirty days) having revenue in 2011 not exceeding 300 people (for the agricultural, forestry, and fisheries sector; industry and construction) and not exceeding 100 people (for the trade and service sector).

2. Small and medium-sized enterprises eligible for the extended tax payment period under Clause 1 of this Article do not include:

- Enterprises ranked as Category 1 according to Circular Joint Circular No. 23/2005/TTLT-BLDTBXH-BTC dated August 31, 2005 of the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance guiding the classification and salary levels for full-time members of the board of directors, general managers, directors, deputy general managers, deputy directors, and chief accountants of state-owned companies.

- Special category enterprises according to Decision No. 185/TTg dated March 28, 1996 of the Prime Minister on special category state-owned enterprises and Decision No. 186/TTg dated March 28, 1996 of the Prime Minister on the list of special category state-owned enterprises.

- Enterprises organized under the parent company-subcompany model where the parent company is not a small or medium-sized enterprise holding more than 50% of the subsidiary's equity.

3. The extension of the tax payment period under Clause 1 of this Article applies to enterprises that have implemented accounting systems, invoices, and certificates and have registered tax payments based on declarations.

1. The corporate income tax payable in 2011 by small and medium-sized enterprises eligible for the extended tax payment period includes the quarterly provisional corporate income tax and the higher amount when finalizing the tax return for 2011.

Article 2. Determination of Corporate Income Tax Eligible for Extension

The corporate income tax eligible for extension under this clause does not include the tax calculated on income from real estate, financial, banking, insurance, securities, lottery, and special consumption tax services, and income from non-imported goods encouraged imports as prescribed in Decision No. 1380/QĐ-BCT dated March 25, 2011 of the Minister of Industry and Trade on the list of non-imported goods encouraged.

2. In cases where small and medium-sized enterprises specified in Article 1 of this Circular have been granted an extension of tax payment for three months pursuant to Decision No. 12/2010/QĐ-TTg dated February 12, 2010 of the Prime Minister on extending the deadline for paying corporate income tax to continue addressing difficulties for enterprises and contributing to promoting economic development in 2010 (Decision No. 12/2010/QĐ-TTg), the tax extended in 2011 includes the tax already extended in 2010 due for payment in 2011 (including the provisional corporate income tax paid in QIV 2010 and the higher amount when finalizing the tax return for 2010).

The tax extended in 2010 due for payment in 2011 continues to be extended in 2011 and does not include the tax calculated on income from real estate, financial, banking, insurance, securities, lottery, and special consumption tax services, and income from non-imported goods encouraged imports (if any) as prescribed in Decision No. 1380/QĐ-BCT of the Minister of Industry and Trade.

In cases where enterprises have declared and paid the provisional QIV 2010 and the higher amount when finalizing the tax return for 2010 into the State budget according to Decision No. 12/2010/QĐ-TTg, they will not be adjusted according to the guidelines of this Circular.

In the case where a business has declared and paid the provisional amount for the fourth quarter of 2010 and the higher discrepancy when settling accounts for the year 2010 to the state budget in accordance with Decision No. 12/2010/QĐ-TTg, it shall not be adjusted according to the guidelines set forth in this Circular.

3. In case a business has income from production and business activities that are eligible for tax payment extension and also has income from production and business activities that are not eligible for such extension, it must separately account for income from activities eligible for tax payment extension and those not eligible to declare and pay taxes separately. If separate accounting is not possible, the provisional corporate income tax or the final corporate income tax of the activities eligible for tax payment extension shall be determined based on the ratio between the total revenue of the activities eligible for tax payment extension and the total revenue of the business.

In cases where business activities eligible for tax payment extension incur losses while other activities not eligible for such extension generate income (or vice versa), the net income subject to taxation of the profitable business activities can be offset against each other at the discretion of the business. For the remaining income, if it is income from activities eligible for tax payment extension, it shall be extended according to the provisions of this Circular; if it is income from activities not eligible for tax payment extension, the business shall not be allowed to extend the tax payment for this income.

Article 3. Extension Period for Payment of Corporate Income Tax

The business shall declare the provisional quarterly corporate income tax and settle the final corporate income tax payable for the year 2011 in accordance with the Law on Tax Administration. The tax payment extension period is one year from the deadline for corporate income tax payment for the year 2011 as stipulated in the Law on Tax Administration, as follows:

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

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

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

4. The tax payment extension period for the provisional tax of the fourth quarter of 2011 and the final tax payable according to the annual settlement of 2011 shall not exceed March 31, 2013.

5. For small and medium-sized enterprises whose tax for the year 2010 was extended according to Decision No. 12/2010/QĐ-TTg and whose tax payment deadline falls in 2011, this tax will continue to be extended by an additional nine months to complete one year, starting from the deadline for tax payment as stipulated in the Law on Tax Administration.

6. In cases where the tax payment date specified in Clauses 1, 2, 3, 4, and 5 of this Article falls on a public holiday, the tax payment extension period shall be calculated to the next working day.

7. For businesses applying a different tax year for corporate income tax than the Gregorian calendar, the tax payment extension applies only to the provisional tax payments of the quarters of the tax year that fall within the year 2011.

Article 4. Procedures and formalities for tax payment extension

1. For corporate income tax generated from production and business activities in 2011 that are eligible for tax payment extension, businesses eligible for tax payment extension shall prepare and submit provisional quarterly corporate income tax declarations and annual corporate income tax settlement declarations in accordance with current regulations, adding the requested tax payment extension period in the declaration commitment section.

2. For small and medium-sized enterprises whose tax for 2010 was extended according to Decision No. 12/2010/QĐ-TTg and whose tax payment deadline falls in 2011, now continuing to be eligible for tax payment extension according to this Circular, the business shall prepare provisional quarterly corporate income tax declaration for the fourth quarter of 2010 and annual corporate income tax settlement declaration for 2010 to replace previously submitted declarations, adding the requested continued tax payment extension period in the declaration commitment section.

3. For small and medium-sized enterprises organized under the parent-subsidiary model to be eligible for tax payment extension according to this Circular, they need to supplement documents to demonstrate the parent-subsidiary relationship and the proportion of subsidiary capital held by the parent company, such as: Subsidiary's Business Registration Certificate (certified copy) or Parent Company's Articles of Association (certified copy) or Subsidiary's Articles of Association (certified copy).

4. During the tax payment extension period, the business shall not be considered to have violated late tax payment and shall not be subject to administrative penalties for late tax payment for the extended tax amount.

Article 5. Implementation and Effectiveness

1. This Circular takes effect from June 6, 2011. The extension of the corporate income tax payment deadline for small and medium-sized enterprises in 2011 shall be implemented from the effective date of Decision No. 21/2011/QĐ-TTg dated April 6, 2011 of the Prime Minister on extending the corporate income tax payment deadline for small and medium-sized enterprises to further address difficulties and contribute to promoting economic development in 2011.

2. During implementation, if there are any issues, organizations and individuals are advised to report to the Ministry of Finance for timely guidance and resolution.