Businesses complain about new CIT payment regulation

Under the new regulation, by the end of the third quarter, enterprises have to estimate the amounts of tax of the fourth quarter and pay the amounts.

Some of the Decree 126 provisions effective on December 5 related to the Law on Tax Administration, say that the total amount of corporate income tax (CIT) that enterprises temporarily pay in the first three quarters of the year must not be lower than 75 percent of the CIT amounts they have to pay for the whole year.

Businesses complain about new CIT payment regulation

This means that by the end of the third quarter, enterprises have to estimate the amounts of tax of the fourth quarter and pay the amounts instead of the end of the fourth quarter as previously applied.

Dang Ngoc Minh, deputy general of the General Department of Taxation (GDT), told the press on the sidelines of the dialogue between enterprises and customs and taxation agencies held some days ago, that the state budget has a shortage and the purpose of the budget collection is to get money to pay for state management operations, especially to allocate to provinces that cannot cover expenses.

In other words, the budget collection progress plays a very important role in the operations of many localities.

Asked if GDT has received complaints about the new regulation from enterprises, he said these are just a few enterprises and they don’t represent the whole business community.

The official stressed that the tax collection must be done in reference to the local budget management and the benefits of society.

This means that despite the complaints, GDT is still determined to collect tax as planned.

What will happen if enterprises are fined not because they did not pay tax, but just because they did not anticipate the sharp increase in the amount of tax they would have to pay in Q4?

In replay, GDT said it believes that this may happen but not regularly, because enterprises can foresee their business performance.

But enterprises disagreed with GDT about the uncommon number of cases that saw revenue soaring unexpectedly in Q4.

“GDT always sets estimates on state budget collections every year. Will it dare to affirm that it can collect 75 percent of the total budget collections of the whole year by the end of Q3?” a businessman said. “Will it be fined if it fails to do this?”

The businessman went on to explain that no business dares to set revenue targets quarterly, but they only dare set for the whole year.

“Everyone wants to fulfill yearly business plans, but unexpected things always occur. Businesses were preparing for the year-end sale season, when new Covid-19 infections were discovered in HCM City,” he said.

 
According to GDT, the Decree 126 will take place on December 5. This means that enterprises, seriously affected by Covid-19, will not be affected by the new regulation this year, because the deadline for temporary tax payment was the last day of October, or Q3.

“Who dares to say he will make profit this Tet sale season? With the regulation, it is still unclear which businesses will take a loss and which will make a profit, but all of them now have to make temporary tax payments,” he said.

When the Decree 20 dated in 2017 on the tax administration applied to enterprises with transactions with related parties facing businesses’ complaints, the Prime Minister has repeatedly requested to amend the decree. It took three years to do this.

The decree covers only 8,000 businesses, 83 percent of which are foreign invested enterprises and 17 percent Vietnamese enterprises.

Meanwhile, the number of businesses to be affected by Decree 126 is much higher and the businesses are from many different economic sectors which face difficulties.

The regulation will have a big impact on enterprises and lead to serious consequences, even if it is amended later.

The director of an enterprise warned that businesses that have been hit hard by Covid-19 will become even worse because of the new regulation on temporary tax payment.

“You don’t have money, but you still have to pay taxes in advance, based on the estimated profit you may make in the future. It is just like taxing dreams,” he commented.

Meanwhile, according to GDT, the Decree 126 will take place on December 5. This means that enterprises, seriously affected by Covid-19, will not be affected by the new regulation this year, because the deadline for temporary tax payment was the last day of October, or Q3.

So, enterprises will only have to make temporary tax payment in accordance with Decree 126 by the end of October 2021. 

Duy Anh

New regulation on temporary tax payments worries businesses

New regulation on temporary tax payments worries businesses

The taxation body needs to ‘nurture sources of revenue’ rather than bleed businesses dry, businesspeople say.

Banks to deduct tax payments from clients’ accounts

Banks to deduct tax payments from clients’ accounts

Banks will be able to deduct the tax payments of suppliers based in foreign countries—that conduct e-commerce or digital transactions with organizations and individuals in Vietnam—from their bank accounts,

 
 

Other News

.
VND1 quadrillion package for economy via interest-rate subsidy proposed
VND1 quadrillion package for economy via interest-rate subsidy proposed
FEATUREicon  11/11/2021 

The Ministry of Finance has advised the Government to launch a demand stimulus package through an interest-rate subsidy, worth VND20 trillion a year and VND40 trillion for two years.

Doctors found guilty of criminal activity, shocking society
Doctors found guilty of criminal activity, shocking society
FEATUREicon  11/11/2021 

A number of violations by medical staff have been found recently, and many medical doctors, who have the respect of society because they save peoples’ lives, have been handcuffed.

Technology helps manage thousands of workers without shop foremen
Technology helps manage thousands of workers without shop foremen
FEATUREicon  11/11/2021 

Instead of foremen, shops now can be controlled by monitoring cameras and face recognition technology. This allows factories to maintain stable operations in all situations.

Top-secret missions of submarine soldiers
Top-secret missions of submarine soldiers
FEATUREicon  11/11/2021 

At 9 am June 2, 2017, for the first time in history of the Vietnam’s People’s Navy, a missile launched from Submarine 183 - Hanoi flew up from the seabed, hitting its target.

Tourism sector tries to ‘break the ice’, waits for revival
Tourism sector tries to ‘break the ice’, waits for revival
FEATUREicon  11/11/2021 

A series of famtrips have been organized by travel firms in cooperation with local authorities as a part of a plan to ‘break the ice’ in the tourism market.

Securities investors pour billions of dollars a day into market
Securities investors pour billions of dollars a day into market
FEATUREicon  10/11/2021 

Billions of dollars are pouring into the stock market each trading session as the prices of some stocks have reached historic peaks.

Group of volunteer doctors stays in HCMC to assist Covid-19 fight
Group of volunteer doctors stays in HCMC to assist Covid-19 fight
FEATUREicon  10/11/2021 

They are the doctors of the Ministry of Health’s last unit under the assistance program which is still operating in HCM City. They continue to make every effort each day to save Covid-19 patients’ lives.

Prime Minister's first trip to Europe affirms Vietnam's position
Prime Minister's first trip to Europe affirms Vietnam's position
FEATUREicon  09/11/2021 

Prime Minister Pham Minh Chinh's business trips to the UK and France have contributed to strongly promoting foreign relations; strengthening the trust of international friends and partners; and affirming the position and role of Vietnam.

China’s new regulations result in more barriers to access its huge market
China’s new regulations result in more barriers to access its huge market
FEATUREicon  09/11/2021 

China is no longer an easy market and if Vietnamese businesses don’t change their business strategies, it will be more difficult to enter the huge market.

Business stories: billionaires get richer
Business stories: billionaires get richer
FEATUREicon  09/11/2021 

The share price increases last week helped rich businesspeople become even richer.

Digital farming: the way to ease reliance on merchants
Digital farming: the way to ease reliance on merchants
FEATUREicon  09/11/2021 

Digital transformation will help connect consumers and farmers, by allowing them to witness the cultivation and distribution process together.

Reform hits the ceiling
Reform hits the ceiling
FEATUREicon  08/11/2021 

The Prime Minister is taking a series of solutions to implement socio-economic recovery in 2022, including raising the GDP by 6 - 6.5% and maintaining the CPI at 4%, after the economy was seriously affected by Covid-19.

Business environment reform: drastic and consistent
Business environment reform: drastic and consistent
FEATUREicon  08/11/2021 

After several years using the World Bank Ease of Doing Business report as a measurement, Vietnam's business environment has made great strides.

Unprecedented times call for new consensus to overcome challenges
Unprecedented times call for new consensus to overcome challenges
FEATUREicon  08/11/2021 

The current challenges require an unprecedented consensus to overcome it, said former Director of the Central Institute for Economic Management Nguyen Dinh Cung.

More obstacles for VN corporations’ overseas investments
More obstacles for VN corporations’ overseas investments
FEATUREicon  07/11/2021 

Many overseas projects of Vietnam face difficulties, high risks, and lack of investment efficiency, such as oil and gas exploitation and exploration, rubber planting and processing, and telecom projects.

Turning agricultural waste into cash
Turning agricultural waste into cash
FEATUREicon  07/11/2021 

The collection and reuse of agricultural by-products not only helps reduce greenhouse gas emissions but also helps farmers have the opportunity to enrich themselves.

Crossing hundreds of thousands of nautical miles to bring submarines to naval base
Crossing hundreds of thousands of nautical miles to bring submarines to naval base
FEATUREicon  09/11/2021 

To bring submarines to Vietnam only one at a time, Vietnamese soldiers had to cross three oceans for 45 days. The submarines were carried by the Dutch Rolldock Sea vessel.

Submarine sailors learn to master ‘ocean’s black holes’
Submarine sailors learn to master ‘ocean’s black holes’
FEATUREicon  08/11/2021 

Vietnamese submarine sailors are especially admired by specialists and lecturers at the Russian Naval Academy for fulfilling their training course two years ahead of schedule.

Smart tourism and solutions to revive the "smokeless" industry
Smart tourism and solutions to revive the "smokeless" industry
FEATUREicon  07/11/2021 

According to the Ministry of Culture, Sports and Tourism's proposal, the pilot roadmap for welcoming back international tourists to Vietnam will be carried out in three phases.

Love for mathematics inspires Vietnamese doctor in Australia
Love for mathematics inspires Vietnamese doctor in Australia
FEATUREicon  07/11/2021 

Despite love for math, there was a time when she had no intention of earning a PhD in mathematics. She pursued a career in applied mathematics to answer her own questions.

 
 
 
Leave your comment on an article

OR QUICK LOGIN