Circular No. 575-TC/TCT guides the collection of business income tax for organizations engaged in construction and installation activities, distinguishing tax rates and payment deadlines based on whether revenue was generated before or after September 30, 1990.
Scope of application
Organizations engaging in construction and installation activities
Key points
- Organizations with revenue from construction and installation activities prior to September 30, 1990 → pay corporate income tax according to the Circular No. 20-CT/CTN rate schedule and are exempt from profit tax (Point 1)
- Organizations with revenue from construction and installation activities on or after October 1, 1990 → pay business income tax according to the Circular No. 45-CT/TCT rate schedule and must also pay profit tax (Point 1)
- All organizations engaged in construction and installation must pay taxes at the place where their revenue from production and business operations is generated (construction site) (Point 2)
🌐 Social impact of this document
- To strictly manage income sources from organizations engaging in construction and installation activities, ensuring state budget revenues
- To clarify tax obligations for businesses operating in the construction sector
❓ Frequently asked questions
How do enterprises engaged in construction with revenue before September 30, 1990 pay taxes?
Pay corporate income tax according to the Circular No. 20-CT/CTN rate schedule and are exempt from profit tax.
How do enterprises engaged in construction with revenue on or after October 1, 1990 pay taxes?
Pay business income tax according to the Circular No. 45-CT/TCT rate schedule and must also pay profit tax.
Where are organizations engaged in construction required to pay their taxes?
At the place where revenue from production and business operations is generated (construction site).
Full text
LETTER
OF THE MINISTRY OF FINANCE NUMBER 575-TC/TCT DATED APRIL 23, 1991
REGARDING THE COLLECTION OF BUSINESS INCOME TAX ON CONSTRUCTION ACTIVITIES
FOR CONTRACT WORK
The Ministry of Finance provides guidance on the collection of business income tax for construction activities as follows:
1. BASED ON DECISION NUMBER 268-CT DATED JULY 30, 1990 OF THE COUNCIL OF MINISTERS AND ARTICLE 1 OF THE BUSINESS INCOME TAX LAW, ORGANIZATIONS ENGAGED IN CONTRACT WORK THAT HAVE BUSINESS INCOME MUST PAY TAX SPECIFICALLY AS FOLLOWS:
- CONTRACT WORK WITH BUSINESS INCOME BEFORE SEPTEMBER 30, 1990 SHALL PAY ENTERPRISE INCOME TAX ACCORDING TO THE RATE TABLE ISSUED BY CIRCULAR NUMBER 20-CT/CTN DATED JUNE 6, 1989 OF THE MINISTRY OF FINANCE AND ARE EXEMPT FROM PAYING PROFIT INCOME TAX.
- CONTRACT WORK WITH BUSINESS INCOME FROM OCTOBER 1, 1990 TO DATE SHALL PAY BUSINESS INCOME TAX ACCORDING TO THE RATE SPECIFIED IN THE DETAILED TABLE ON BUSINESS INCOME TAX ISSUED BY CIRCULAR NUMBER 45-CT/TCT DATED OCTOBER 4, 1990 OF THE MINISTRY OF FINANCE AND SHALL PAY PROFIT INCOME TAX AS PROVIDED BY LAW.
2. PLACE OF TAX PAYMENT:
- FOR PERIODS PRIOR TO SEPTEMBER 30, 1990 AS WELL AS FROM OCTOBER 1, 1990 ONWARDS, BUSINESS INCOME TAX SHALL BE PAID AT THE LOCATION WHERE THE BUSINESS INCOME IS GENERATED (CONSTRUCTION SITE).
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