Instruct retrospective handling for businesses engaged in related-party transactions for tax offset
Specifically, for the tax finalization period 2019, the General Department of Taxation states that enterprises that declared tax finalization 2019 according to tax period before March 31 are required to make additional declarations of corporate income tax finalization according to the provisions of Decree No. 68/2020/ND-CP amending and supplementing Clause 3, Article 8 of Decree No. 20/2017/ND-CP.
The offset of corporate income tax paid in 2017 and 2018 shall be recalculated according to the provisions of Decree No. 68/2020/ND-CP, if the corporate income tax amount decreases, the corresponding late payment amount shall be reduced (if any).
Specifically, if the paid corporate income tax in 2017 and 2018 has not yet been inspected, the taxpayer shall offset the difference between the corporate income tax and the late payment interest in the corporate income tax amount in 2020. If the difference is deducted fully in 2020, the remainder shall be deducted in the corporate income tax in the next five years. If the above period is over but the remaining corporate income tax is still deducted fully, it shall not be settled.
If there are decisions on inspections and settlement, the taxpayer shall request the tax agency to determine the corporate income tax payable. Based on the taxpayer’s request, relevant documents including documents of enterprises and documents, minutes of inspection and examination teams, the tax branch shall re-determinate corporate income tax payable and late payment interest to offset the difference in the corporate income tax in 2020.
In case of necessity, the tax agency shall work with the inspection and examination teams to determine data of taxpayers at tax offices’ headquarters.
Similarly, if there arenot enough inspections and examinations, if the year 2020 is not enough to fully offset, it will be offset against the payable enterprise income tax for the next five years from the year 2020. At the end of the above time limit, the remaining enterprise income tax amount has not yet been fully cleared.
The General Department of Taxation guides that the re-determination of tax payable shall be carried out at the tax agency’s office andat the taxpayer’s office; conclusions and inspection decisions in 2017 and 2018 are not permitted to be revised.
If the taxpayer was fined for tax administrative violations or is in the complaint process, the fine shall be not adjusted.
By Thuy Linh/Ngoc Loan
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