Enterprises temporarily pay 80% of enterprise income tax in 4 quarters

These are the new regulations prescribed in Decree No. 91/2022/ND-CP  on amending and supplementing a number of articles of Decree No. 126/2020/ND-CP detailing a number of articles of the Law on Tax Administration.

In previous regulations, Decree No. 126/2020/ND-CP requires the temporarily paid for the first 3 quarters of a tax year must not be lower than 75% of the payable enterprise income tax amount.

From the above regulations, many enterprises find many difficulties in estimating the business performance of the quarter 3rd which cannot be exact. Enterprises can face the risk of being fined for late tax payments if having better business performance in the quarter 4th.

temporarily pay 80% of enterprise income tax in 4 quarters
Enterprises temporarily pay 80% of enterprise income tax in 4 quarters (Illustration)

To overcome this condition, Decree 91/2022 prescribes:

The enterprise income tax, total after-tax profit left after the temporary set up of funds, the total enterprise income tax of foreign carriers of the first 4 quarters of a tax year must not be lower than 80% of the after-tax profit left after setting up funds stated in annual finalization statements. 

Decree No. 91/2022 takes effect on October 30, 2022. Regulations on temporarily paying enterprise income tax applicable to the tax period of 2021 are as follows:

- To October 30, 2022, taxpayers who have temporary payments in the first 03 quarters of the tax year 2021 must not lower than 75% of the payable amount stated in annual finalization statements shall not be applicable with the temporary payment of 80% in 04 quarters.

- To October 30, 2022, taxpayers who have temporary payment in the first 03 quarters of the tax year 2021 must not lower than 75% of the payable amount stated in annual finalization statements shall be applicable with this temporary payment in 04 quarters in accordance with this Decree if having no arising late payment amount.

In the cases that competent agencies make the investigation and check the late payment in accordance with the points b, c, g, Clause 6, Article 8, Decree No. 126/2020/ND-CP on applying the temporary payment percentage in 04 quarters prescribed in Decree No. 91/2022 with the reduction for late payment must have the proposal for reducing late payment under the Form No. 01/GTCN in the Appendix of Decree No. 91/2022 to the tax agencies.

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