Guidance on corporate income tax settlement Circular 80

Instructions on how to prepare corporate income tax finalization declaration according to Circular 80/2021, prepare corporate income tax finalization according to revenue, cost and revenue ratio methods.

I. Enterprises declare corporate income tax according to the revenue and expense method

1. Corporate income tax settlement dossier according to Circular 80/2021/TT-BTC

Corporate income tax settlement dossier according to Circular 80/2021/TT-BCT includes:   

➨ Corporate income tax finalization declaration form 03/TNDN (Circular 80/2021/TT-BTC);

➨ Appendices issued with Circular No. 80/2021/TT-BTC:

• Appendix 03-1A/TNDN on business performance results (applicable to the trade and service production industry); Appendix 03-1B/TNDN (applicable to the banking and credit industry); Appendix 03-1C/TNDN (applicable to securities companies and securities investment management companies);
• Appendix 03-2/TNDN (transferring losses when there is profit);
• Corporate income tax incentives appendices: appendix 03-3A/TNDN, appendix 03-3B/TNDN, appendix 03-3C/TNDN, appendix 03-3D/TNDN;
• Appendix 03-4/TNDN Corporate income tax paid abroad is deductible in the tax period;
• Appendix 03-5/TNDN corporate income tax on real estate transfer activities;
• Appendix 03-6/TNDN reports on the allocation and use of science and technology funds (if any);
• Appendix on allocation of corporate income tax for production facilities, real estate transfer activities, hydropower production, and computerized lottery business: Appendix 03-8/TNDN, Appendix 03-8A/TNDN, Appendix 03-8B/TNDN, Appendix 03-8C/TNDN;
• Appendix 03-9/TNDN list of documents for payment of provisional corporate income tax of the activity;
• Information on related relationships and related transactions according to Decree No. 132/2020/ND-CP: GDLK appendices Decree 01, 02, 03, 04 (if any);
• Enterprises eligible for a 30% corporate income tax reduction according to Resolution No. 406/NQ-UBTVQH15 issued with Decree 92/2021/ND-CP in 2021: Appendix PL92/2021/ND-CP.

Documents and data required to prepare corporate income tax finalization declaration form 03/TNDN:

• Financial statements for the final year or financial statements up to the time of decision on the enterprise’s division, consolidation, merger, dissolution, conversion of enterprise type, or termination of operations;
• Balance sheet, detailed account books;
• Corporate income tax declarations for related years to complete the loss transfer appendix 03-2/TNDN when the enterprise makes a profit.

2. Deadline for submitting corporate income tax finalization declaration

➨ The deadline for submitting the corporate income tax finalization declaration is the last day of the third month from the end of the calendar year or fiscal year.

For example: 

For the enterprise’s annual accounting period from January 1, 2021 to December 31, 2021, the deadline for submitting the 2021 corporate income tax finalization declaration is March 31, 2021. 

➨ In case an enterprise divides, merges, consolidates, dissolves, converts the type of enterprise, or ceases operations: the deadline for submitting the corporate income tax finalization declaration is no later than the 45th day from the date of the event;

➨ In case the enterprise is unable to submit the dossier on time due to natural disasters, unexpected accidents, or fires: the enterprise shall submit a written request for an extension directly to the tax authority in charge. The extension period shall not exceed 60 days from the deadline for submitting the corporate income tax finalization declaration.

3. Prepare corporate income tax finalization declaration form 03/TNDN (Circular 80/2021/TT-BTC)

3.1 How to log in and select a declaration

Businesses can declare online on the Electronic Tax page or on the Declaration Support software.

➨ Log in to the Declaration Support software (HTKK) with the company tax code, select “Corporate Income Tax”, select the form “Annual corporate income tax settlement declaration (form 03/TNDN) (TT80/2021)”, the software will display the tax calculation period table including the following contents:

• In case of settlement: tax settlement for enterprises operating normally and tax settlement for the year, choose the periodic settlement item;
• Settlement year: select the settlement year (for example: 2021 from 01/01/2021 to 31/12/2021);
• Select the first declaration or supplementary declaration (for cases where the first declaration has been submitted and the declared information and data need to be edited).

➨ Select declaration appendix: 

• Appendix 03-1A/TNDN results of production and business activities;
• Appendix 03-2/TNDN transfers losses from production and business activities when the enterprise makes a profit and transfers losses.

In addition, depending on each case, the type of business will choose additional appendices.

For example: 

• Appendix PL92/2021/ND-CP Enterprises eligible for a 30% corporate income tax reduction according to Resolution No. 406/NQ-UBTVQH15 issued with Decree 92/2021/ND-CP for 2021;
• Related party transaction appendices (GDLK NĐ 132-01…): enterprises are required to fully declare related party transaction information according to Decree 132/2020/ND-CP.

3.2. Prepare Appendix 03-1A/TNDN 

Then, based on the business performance report, enter the completed number of appendix 03-1A/TNDN including the following indicators:

• Indicator [04] – Revenue from sales of goods and provision of services: is the total revenue generated during the tax period of the enterprise from the provision of goods and services. The data of this indicator is based on the business performance report, data in Code 01;
• Indicator [05] – Revenue from sales of exported goods and services: is the total revenue from the export of goods and services of the enterprise during the period. The data of this indicator is based on the detailed book of account 511, the detailed section of revenue from sales of exported goods and services;
• Indicator [06] – Revenue deductions: the software will automatically sum indicators [07] [08] [09] up: Indicator [06] = [07] + [08] + [09];
• Indicator [07] – Trade discount: reflects the amount of trade discount that the enterprise has deducted or paid to the buyer when purchasing in large quantities… The data of this indicator is based on the detailed book of the trade discount account;
• Indicator [08] – Sales discount: is the total amount of sales discount of the enterprise in the tax period. The data of this indicator is based on the detailed book of the sales discount account;
• Indicator [09] – Value of returned goods sold: value of sold goods returned during the tax period. The data of this indicator is based on the detailed book of the returned goods account;
• Indicator [10] – Financial revenue: reflects revenue from financial activities including interest on deposits, loans, royalties, dividends, foreign currency sales, etc. of the enterprise. The data of this indicator is based on the business performance report, data in Code 21;
• Indicator [11] – Revenue from interest on deposits: this indicator data is based on the detailed book of account 515, financial activity revenue;
• Indicator [12] – Cost of production and trading of goods and services: the software will automatically synthesize indicators [13] [14] [15]: indicator [12] = [13] + [14] + [15];
• Indicator [13] – Cost of goods sold: shows the cost of goods, production cost of finished products, direct costs in the tax period, other costs, etc. The data of this indicator is based on the detailed book of account 632, cost of goods sold;
• Indicator [14] – Sales expenses: total sales expenses transferred in the tax period. This indicator data is based on the detailed book of account 641 (Circular 200) or account 6421 (Circular 133), sales expenses;
• Indicator [15] – Business management costs: business management costs transferred during the tax period. This indicator’s data is based on the business results table. This indicator’s data is based on the detailed book of account 642 (Circular 200) or account 6422 (Circular 133);
• Indicator [16] – Financial expenses: financial operating expenses such as losses related to financial investment, lending and borrowing capital, joint venture capital contribution, securities sales and investment transactions, foreign currency sales at a loss… The data of this indicator is based on the business performance report, data at Code 22;
• Indicator [17] – Interest expense: interest expense payable is included in financial expenses during the period. This indicator data is based on the business performance report, data in Code 23;
• Indicator [18] – Net profit from business activities: the software will automatically synthesize indicators [04] [06] [10] [12] [16] to indicator [18] = [04] – [06] + [10] – [12] – [16];
• Indicator [19] – Other income: income items other than income from main business activities. This indicator data is based on the business results table, data in Code 31;
• Indicator [20] – Other expenses: expenses other than production and business activities and financial activities of the enterprise. This indicator data is based on the business results table at Code 32;
• Indicator [21] – Other profits: the software will automatically aggregate indicators [19] [20] to indicator [21] = [19] – [20];
• Indicator [22] – Total accounting profit before corporate income tax: the software will automatically aggregate indicators [18] [21] to indicator [22] = [18] + [21].

⇒ After completing the data in Appendix 03-1A, click “Record”, the software will automatically summarize the data on the final declaration at indicator A1 on final declaration 03/TNDN.

For example: 

Excerpt from the 2021 financial report of Company A applying the accounting regime according to Circular 133/2016/TT-BTC, as follows:

Based on the business performance report, complete Appendix 03-1A/Corporate income as shown below: 

3.3 Steps to prepare tax settlement declaration 03/TNDN

Identify the industry with the highest turnover rate and percentage.

Example: G46 – Wholesale (except cars, motorbikes, scooters and other motor vehicles), rate: 100%.

After completing Appendix 03-1A/TNDN, the software will automatically synthesize data at indicator A1 on final declaration form 03/TNDN.

• Indicator [A1] – Total accounting profit before corporate income tax: is the total profit of the enterprise in the tax period. The software will automatically synthesize from indicator 22 in Appendix 03-1A of production and business performance results;
• Indicator [B1] – Adjustment to increase total profit before corporate income tax: is the adjustment of revenue or expenses due to the difference between accounting and tax in recording, causing the total profit before corporate income tax of the enterprise to increase: [B1] = [B2] + [B3] + [B4] + [B5] + [B6] + [B7];
• Indicator [B2] – Revenue adjustments: are adjustments that lead to increased revenue due to differences between accounting and tax regulations;
• Indicator [B3] – Cost of adjusted revenue: reflects all costs of generating revenue recorded in accounting but adjusted down when calculating taxable income;
• Indicator [B4] – Non-deductible expenses when determining: are expenses that are not deductible when determining taxable income of corporate income tax;
• Indicator [B5] – Income tax paid for income from abroad: is the total amount of corporate income tax (or similar to corporate income tax) that the business establishment has paid for income from production and business activities, providing services abroad during the tax period based on receipts and tax payment documents abroad, data taken from the “Total” line in column (6) from Appendix 03-4/TNDN;
• Indicator [B6] – Adjustment to increase profit due to determining market price for related parties;
• Indicator [B7] – Other adjustments that increase pre-tax profit: is the sum of other adjustments (not yet recorded in indicators [B2] to [B6] due to differences between accounting and tax that increase total pre-tax income;
• Indicator [B8] – Adjustment to decrease total profit before corporate income tax: [B8] = [B9] + [B10] + [B11] + [B12];
• Indicator [B9] – Deduction of taxable revenue from previous year: is revenue recorded in this year’s business performance report, but included in revenue for calculating corporate income tax in the previous year;
• Indicator [B10] – Cost of increased adjusted revenue: reflects the costs directly related to generating increased adjusted revenue recorded in indicator [B2];
• Indicator [B11] – Non-deductible interest expenses of the previous period transferred to this period of the enterprise with related transactions;
• Indicator [B12] – Other adjustments that reduce pre-tax profit: is the sum of other adjustments other than those stated in indicators [B9] to [B10];
• Indicator [B13] – Total taxable income: [B13] = [A1] + [B1] – [B8] is the total taxable income of corporate income tax realized in the tax period excluding losses incurred in previous years and from real estate transfer activities;
• Indicator [B14] – Taxable income from production and business activities;
• Indicator [B15] – Taxable income from real estate transfer activities;
• Indicator [C1] – Taxable income: [C1] = [B14] reflects income from production and business activities of goods and services and other income and is determined by the data on indicator [B14];
• Indicator [C2] – Tax-free income;
• Indicator [C3] – Loss transfer and profit and loss offset: software automatically updates from indicator [C3a] + [C3b];
  • Indicator [C3a] – Losses from business activities carried forward during the period;
  • Indicator [C3b] – Losses from real estate transfer are offset against profits from business operations.
• Indicator [C4] – Taxable income: the software automatically updates indicator [C4] = [C1] – [C2] – [C3];
• Indicator [C5] – Science and technology fund allocation (if any): automatically updated from Appendix 02;
• Indicator [C6] – Taxable income after setting aside science and technology fund [C6] = [C4] – [C5] = [C7] + [C8];
• Indicator [C7] – Taxable income is calculated at a tax rate of 20%;
• Indicator [C8] – Taxable income at other non-preferential tax rates;
  • Indicator [C8a] – Other non-preferential tax rates (%) of taxable income at other non-preferential tax rates;
• Indicator [C9] – Corporate Income Tax from production and business activities calculated at non-preferential tax rates. This indicator is determined as follows: C9 = (C7 x 20%) + (C8 x C8a);
• Indicator [C10] – Preferential corporate income tax according to the Law on Corporate Income Tax C10 = (C11 + C12 + C13);
• Indicator [C11] – Corporate Income Tax difference due to application of preferential tax rates;
• Indicator [C12] – Corporate Income Tax exempted during the period;
• Indicator [C13] – Corporate Income Tax reduced during the period;
• Indicator [C14] – Corporate Income Tax exempted or reduced according to tax agreements;
• Indicator [C15] – Corporate Income Tax exempted or reduced from time to time;
• Indicator [C16] – Amount of income tax paid abroad deducted in the tax period;
• Indicator [C17] – Corporate Income Tax payable for production and business activities;
• This index is determined as follows: [C17] = [C9] – [C10] – [C14] – [C15] – [C16];
• Indicator [D] – Corporate Income Tax payable from real estate transfer activities;
  • Indicator [D1] – Taxable income [D1] = [B15];
  • Indicator [D2] – Loss from real estate transfer activities carried forward during the period;
  • Indicator [D3] – Taxable income [D3] = [D1] – [D2];
  • Indicator [D4] – Provision for science and technology fund, if any;
  • Indicator [D6] – Corporate Income Tax payable for real estate transfer activities during the period;
  • Indicator [D7] – Corporate income tax difference due to application of preferential tax rates on income from implementing investment projects, trading social housing for sale, lease, purchase;
  • Indicator [D8] – Corporate income tax on real estate transfer activities still payable this period [D8] = [D6] – [D7].
• Indicator [E] – Amount of corporate income tax payable for settlement during the period: the software will automatically update according to the formula: [E] = [E1] + [E2] + [E5];
  • Indicator [E1] – Corporate income tax of production and business activities;
  • Indicator [E2] – Corporate income tax from real estate transfer activities [E2] = [E3] + [E4];
  • Indicator [E3] – Corporate income tax from real estate transfer activities;
  • Indicator [E4] – Corporate income tax from infrastructure and housing transfer activities with progress payment collection;
  • Indicator [E5] – Other corporate income tax payable (if any);
  • Indicator [E6] – Corporate income tax from handling of science and technology development fund.
• Indicator [G] – Amount of corporate income tax provisionally paid: [G] = [G2] + [G2] + [G3] + [G4] + [G5];
  • Indicator [G1] – Excess corporate income tax paid in previous period carried over to this period;
  • Indicator [G2] – Corporate income tax provisionally paid during the year;
  • Indicator [G3] – Excess corporate income tax paid in previous period transferred to this period for real estate transfer activities;
  • Indicator [G4] – Provisional corporate income tax paid during the year for real estate transfer activities;
  • Indicator [G5] – Corporate income tax provisionally paid in previous periods and during the settlement year of infrastructure and housing transfer activities with progress payment collection.
• Indicator [H] – Difference between tax payable and provisional tax paid;
  • Indicator [H1] – Difference between tax payable and tax provisionally paid during the year of production and business activities [H] = [E1] + [E5] – [G2];
  • Indicator [H2] – Difference between tax payable and tax provisionally paid during the year for real estate transfer activities [H2] = [E3] – [G4];
• Indicator [I] – Amount of corporate income tax payable by the deadline for tax finalization declaration [I] = [E] – [G] = [I1] + [I2].

3.4 Appendix on loss transfer 03-2/TNDN

3.5 Add to Appendix 03-3A/TNDN

II. Declaration by the ratio method on revenue (form No. 04/TNDN)

1. How to log in and select corporate income tax return

➨ Step 1: Download the HTKK tax declaration support software on the website of the General Department of Taxation, then log in with the enterprise’s tax code, select “Agree”, the screen will appear as follows:

➨ Step 2: Select the corporate income tax subsystem, then select corporate income tax declaration form 04/TNDN (Circular 80/2021);

➨ Step 3: Select the appropriate tax period and click “Agree” on the screen, corporate income tax declaration form 04/TNDN will appear.

2. Prepare corporate income tax finalization declaration according to form 04/TNDN (in case of periodic finalization, annual finalization and first declaration)

In step 3, select the settlement case: periodic settlement, select the annual declaration, then fill in the current settlement period information and select the first declaration, as shown below:

Then click “Agree”

➨ Step 4: Declare information on the settlement declaration form

• Indicator [11] – Revenue subject to corporate income tax: is the total revenue of the enterprise arising during the tax period;
• Indicator [12] – Service activities: taxpayers fill in revenue from service provision activities during the period;
• Indicator [13] – Goods trading activities: taxpayers fill in revenue from sales of goods during the period;
• Indicator [14] – Other activities: taxpayer fills in revenue from other activities (if any);
• Indicator [15] – Corporate income tax rate;
• Indicator [16] – Service activities: Taxpayers choose the tax payment percentage of 2% or 5%;
  • For services (including deposit interest, loan interest): rate 5%;
  • Education, health and arts activities: rate 2%.
• Indicator [17] – Commodity trading activities: rate: 1%;
• Indicator [18] – Other activities: rate 2%;
• Indicator [19] – Corporate Income Tax payable;
• Indicator [20] – Taxpayer fills in the amount of corporate income tax exempted or reduced (if any);
• Indicator [21] – Amount of corporate income tax payable after exemption and reduction;
• Indicator [22]: Taxpayers fill in the amount of corporate income tax paid in excess of the previous period to offset against the amount of corporate income tax payable in this period (if any);
• Indicator [23]: Taxpayers fill in the amount of corporate income tax provisionally paid during the tax period;
• Indicator [24]: Difference between tax payable and tax provisionally paid during the year;
• Indicator [25]: Amount of corporate income tax payable after final settlement.

➨ Step 5: After filling in the information in the declaration, the taxpayer checks the information again and clicks “Record”;

➨ Step 6: Export corporate income tax return in XML format and submit tax return online.

III. Questions related to corporate income tax settlement