The Ministry of Finance has issued a number of new corporate income tax regulations. Circular No 123/2012/TT-BTC, issued on July 27, guides the implementation of the Law on Corporate Income Tax and Decree No 124/2008/ND-CP of December 2008.
The Ministry of Finance has issued a number of new corporate income tax regulations. Circular No 123/2012/TT-BTC, issued on July 27, guides the implementation of the Law on Corporate Income Tax and Decree No 124/2008/ND-CP of December 2008.
Under the new circular, an enterprise facing changes to corporate tax incentives during a taxable period may (i) continue to apply existing incentives in the current year (less than 12 months), or (ii) apply the standard tax rate in the current year and enjoy new incentives in the subsequent tax year.
In addition, income from the transfer of real estate projects not associated with a transfer of land use rights, and income from the transfer of project implementation rights and rights to explore, exploit and process minerals, must be separately accounted and declared and is subject to a corporate tax rate of 25 per cent. Such income is not entitled to tax incentives nor can it be offset against taxable income or losses in other business operations. Income from a project transfer with attached land use or land lease rights is classified under the circular as income from a real estate transfer.
Also under the circular, enterprises collecting money from customers and unable to determine corresponding expenses must declare and temporarily pay corporate tax equal to 1 per cent of the collected sum. Advance payments on leases of assets can either be allocated across the years for which the rent has been paid or wholly recognised as revenue of the current year. For tools and equipment which are not recognised as fixed assets, asset acquisition costs can be accounted as operational expenses in a given period not to exceed two years.
Enterprises receiving in-kind contributions or asset transfers as a result of corporate division, separation, consolidation, or merger may depreciate those assets and write off the depreciation casts according to the re-evaluated cost of the asset. This does not apply to land use rights, which cannot be depreciated.
In a provision pertaining only to golf course operators, revenue from the sale of pre-paid tickets or membership cards for a number of years shall be divided by the number of years and the proportional sum declared in each year.
The new circular takes effect September 10 and applies to the taxable period of 2012. It replaces Circular No 130/2008/TT-BTC of December 2008, Circular No 177/2009/TT-BTC of September 2009, Circular No 40/2010/TT-BTC of March 2010 and Circular No 18/2011/TT-BTC of February 2011.
(Source: VNNet)
