On 15 October 2020, the Vietnamese Government has issued Decree No. 114/2020/ND-CP on reduction of payable corporate income tax (CIT) of the year 2020 for enterprises, cooperatives, non-business units and other organizations.
Previously, The National Assembly of Vietnam has approved a 30% corporate income tax (CIT) reduction on 19 June 2020 to all businesses if their total revenue does not exceed the VND 200 billion (approximately USD 8.8 million) threshold in 2020. After approval, the rate is reduced to 14% from the previous 20%.
In case the enterprise expects the total revenue in the CIT period of 2020 to not exceed VND 200 billion, it shall determine the quarterly temporary payment equal to 70% of the payable corporate income tax amount of the quarter. At the end of the 2020 enterprise income tax period, if the total revenue in 2020 of the enterprise does not exceed VND 200 billion, the enterprise shall declare and reduce the enterprise income tax of the year 2020 upon finalization of the enterprise income tax.
This Decree takes effect from 3 August 2020.
