To: The Representative Office of Hiroshima Bank, Ltd. in Hanoi City
(Address: Suite 901, Pacific Place, 83B Ly Thuong Kiet Street, Tran Hung Dao Ward, Hoan Kiem District, Hanoi City - TIN: 0108865143)

In response to the Official Dispatch No. 02/2020/CV dated August 04, 2020 of the Representative Office of Hiroshima Bank, Ltd. in Hanoi City regarding corporate income tax (CIT) on interests on bank deposits, Hanoi City Department of Taxation hereby gives guidelines as follows:

- Pursuant to the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance of Vietnam providing guidelines for implementation of the Government’s Decree No. 218/2013/ND-CP dated December 26, 2013 prescribing and guiding the implementation of the Law on Corporate Income Tax;

+ Clause 5 Article 3 stipulates the tax calculation method as follows:

“5. In case public service providers, other organizations that are not enterprises duly established and operating under the Law of Vietnam, and enterprises paying VAT using direct method earn incomes from goods and services subject to CIT and can determine their revenues but cannot determine costs and incomes from business activities, they shall declare and pay CIT at the following fixed rates of revenues from the sale of goods and supply of services. To be specific: 

+ For services (including interests on deposits and loans):  5%.

Regarding education, healthcare, art performance:  2%.

+ For goods trading: 1%.

...

...

...

…”

+ Clause 1 Article 4 stipulates determination of assessable incomes as follows:

“1. Assessable income incurred in a tax period equals (=) taxable income minus (-) tax-free income and losses carried forward from previous years.

Assessable income is calculated adopting the following formula:

Assessable income

=

Taxable income

-

Tax-free income

...

...

...

Losses carried forward from previous years

…”

+ Clause 1 Article 11 stipulates CIT rate as follows:

“1. From January 01, 2014, the CIT rate is 22%, except for the cases specified in Clause 2 and Clause 3 of this Article and the cases in which preferential rates are applied.

…

From January 01, 2016, the CIT rate of 20% shall apply to enterprises that are applying the CIT rate of 22%.”

- Pursuant to the Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance of Vietnam providing guidelines for corporate income tax (CIT):

+ Clause 1 Article 1 amending Clause 1 Article 3 of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance of Vietnam providing guidelines for implementation of the Government’s Decree No. 218/2013/ND-CP dated December 26, 2013 prescribing and guiding the implementation of the Law on Corporate Income Tax (hereinafter referred to as “Circular No. 78/2014/TT-BTC”) stipulates as follows:

“1. ...

...

...

...

CIT payable

=

Assessable income

-

Contributions to science and technology fund (if any)

x

CIT rate

…”

+ Article 2 provides amendments to Clause 2 Article 4 of the Circular No. 78/2014/TT-BTC as follows:

...

...

...

…

Taxable income in a tax period is calculated as follows:

Taxable income

=

Revenue

-

Deductible expenses

+

Other incomes

...

...

...

- If revenue, expenses and income from business activities can be determined, CIT payable shall be calculated according to the provisions of Clause 2 Article 1, Article 2 of the Circular No. 96/2015/TT-BTC dated June 22, 2015 and Clause 1 Article 4, Article 11 of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance of Vietnam.

- If revenue can be determined but expenses and income from business activities cannot be determined, CIT on deposit interests shall be declared and paid according to a fixed rate of 5% of revenue as prescribed in Clause 5 Article 3 of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance of Vietnam.

The Representative Office of Hiroshima Bank, Ltd. in Hanoi City is requested to study the abovementioned regulations and consider current situations to declare and pay tax in accordance with regulations of law.

If there are any other difficulties that arise during the implementation of tax policies, you can refer to our guiding documents available on website http://hanoi.gdt.gov.vn or directly contact the Tax Inspection Division No. 2 for specific guidelines.

The Representative Office of Hiroshima Bank, Ltd. in Hanoi City is requested to comply with guidelines herein./.

PP. DIRECTOR 
DEPUTY DIRECTOR 




Nguyen Tien Truong