THE GOVERNMENT | | THE SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness |
No. 68/2020/ND-CP | | Hanoi, June 24, 2020 | |
DECREE
Amending and supplementing Clause 3, Article 8 of the Government’s Decree No. 20/2017/ND-CP of February 24, 2017, prescribing tax administration for enterprises having transactions with related parties[1]
Pursuant to the June 19, 2015 Law on Organization of the Government;
Pursuant to the November 29, 2006 Law on Tax Administration and November 20, 2012 Law Amending and Supplementing a Number of Articles of the Law on Tax Administration;
Pursuant to the June 3, 2008 Law on Enterprise income Tax and June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax;
Pursuant to the November 26, 2014 Law Amending and Supplementing a Number of Articles of the Tax Laws;
Pursuant to the June 18, 2014 Law on Public Investment;
Pursuant to the November 26, 2014 Law on Investment;
Pursuant to the November 26, 2014 Law on Enterprises;
Pursuant to the November 20, 2015 Law on Accounting;
Pursuant to the June 20, 2012 Law on Price;
At the proposal of the Minister of Finance;
The Government promulgates the Decree amending and supplementing Clause 3, Article 8 of the Government’s Decree No. 20/2017/ND-CP of February 24, 2017, prescribing tax administration for enterprises having transactions with related parties.
Article 1. To amend and supplement Clause 3, Article 8 of the Government’s Decree No. 20/2017/ND-CP of February 24, 2017, prescribing tax administration for enterprises having transactions with related parties, as follows:
“3. Total deductible loan interest cost upon determining income subject to enterprise income tax for enterprises having transactions with related parties:
a/ The total loan interest cost (after deducting deposit and loan interest amounts) arising in a period eligible for deduction from income subject to enterprise income tax must not exceed 30% of total net profit generated from business activities in the period plus loan interest cost (after deducting deposit and loan interest amounts) and depreciation cost arising in the period.
b/ The loan interest cost ineligible for deduction as prescribed at Point a of this Clause may, upon determining the total deductible loan interest cost, be carried forward to the following tax period if the total deductible loan interest cost of the following tax period is lower than the threshold prescribed at Point a of this Clause. The maximum period for a non-deductible interest cost amount to be carried forward is 5 consecutive years counting from the year following the year when such non-deductible loan interest cost arises.
c/ Point a of this Clause does not apply to loans of taxpayers being credit institutions under the Law on Credit Institutions and insurance business institutions under the Law on Insurance Business; the Government’s official development assistance (ODA) and concessional loans that are borrowed from foreign countries for on-lending to enterprises; loans for implementing national target programs (new-style countryside building and sustainable poverty reduction programs); and loans for investment in programs and projects to implement the State’s social welfare policies (houses for resettlement, workers or students and other public welfare projects).
d/ Taxpayers shall declare the rate of loan interest cost arising in a tax period according to Form No. 01 provided in the Appendix to this Decree.”
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[1] Công Báo Nos 659-660 (1/7/2020)