Under global competitive pressure, FDI enterprises not only need to comply with tax obligations but also have to seek tax optimization solutions to maximize profits and ensure legal compliance. So, how to conduct effective tax finalization and apply reasonable tax optimization strategies? Let DNP Viet Nam Law Firm explore this in this article.
1. Corporate Income Tax Finalization Deadlines:
The tax declaration and finalization deadlines are specified in Article 44 of the 2019 Law on Tax Administration as follows:
– Quarterly provisional tax payments: Enterprises must submit payments no later than the last day of the first month in the following quarter.
– Annual tax finalization: Tax finalization documents must be submitted no later than the last day of the third month after the end of the fiscal year.
Additionally, under Decree 91/2022/ND-CP, if the tax filing deadline falls on a public holiday, the deadline is extended to the next working day.
2. Annual CIT Finalization Dossier:
2.1 Enterprises Determining Taxable Income:
The tax finalization dossier includes:
– CIT finalization declaration: Form No. 03/TNDN under Circular 151/2014/TT-BTC.
– Financial statements: Includes annual financial statements or those at the time of enterprise merger, acquisition, conversion, dissolution, or termination.
– Additional supporting documents based on actual transactions:
+ Business performance reports (Forms 03-1A/TNDN, 03-1B/TNDN, 03-1C/TNDN)
+ Loss carry-forward report (Form 03-2/TNDN)
+ CIT incentives report (Forms 03-3A/TNDN, 03-3B/TNDN, 03-3C/TNDN)
+ Report on foreign-paid CIT eligible for deduction (Form 03-4/TNDN)
+ CIT on real estate transfers (Form 03-5/TNDN)
+ Science and technology fund report (if applicable, Form 03-6/TNDN)
+ Related-party transaction information (Form 03-7/TNDN)
+ CIT for enterprises with dependent units in different provinces (Form 03-8/TNDN)
2.2 Enterprises Using Revenue-Based Tax Calculation
Enterprises applying the percentage-based tax calculation method must use Form No. 04/TNDN under Circular 151/2014/TT-BTC. Enterprises with irregular revenue can still use this form without mandatory annual finalization.
3. Where to Submit CIT Finalization Reports
Enterprises can submit tax finalization reports in two ways:
– Direct submission: At the tax authority managing the enterprise’s headquarters.
– Online submission: Via Vietnam’s Tax Portal here, streamlining processes and reducing paperwork.
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4. CIT Optimization: Strategies for FDI Enterprises
Optimizing CIT helps enterprises save costs, increase profitability, and enhance competitiveness. Effective tax management strategies include:
4.1 Choosing the right business model:
Each type of business has its own tax rates and incentive policies. Identifying the appropriate model from the beginning helps optimize tax obligations.
4.2 Developing a strategic tax plan:
Businesses should proactively develop long-term tax plans, set clear objectives, and closely monitor implementation to ensure compliance while maximizing tax benefits.
4.3 Maximizing tax incentives:
The government implements various incentive policies for specific industries or economic zones. Understanding and effectively applying these incentives will help businesses minimize tax liabilities.
4.4 Managing and allocating expenses effectively:
Proper cost management ensures compliance during tax finalization while optimizing profits.
4.5 Seeking professional tax advisory services:
With the support of tax experts, businesses can mitigate risks, ensure proper procedures, and identify the most optimal solutions within the legal framework.
Tax optimization is not merely about reducing tax payments but also forms a part of a sustainable financial strategy, enabling businesses to grow steadily and thrive in the long run.
The above article is for reference only. Please contact DNP Vietnam Law Firm using the details below for more information.
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Contact:
🏢 Address: 5th Floor, 52 Nguyen Thi Nhung Street, Van Phuc estate, Hiep Binh Phuoc, Thu Duc City, Ho Chi Minh City, Viet Nam.
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📞 Hotline: 0987 290 273 (Đinh Văn Tuấn Lawyer).
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