Circular No. 39/2010/TT-BTC dated March 22, 2010 of the Ministry of Finance guiding the implementation of the Prime Minister's Decision No. 12/ 2010/QD-TTg of February 12, 2010, on the extension of time limits for enterprise income tax payment to further remove difficulties for enterprises, contributing to boosting economic development in 2010

THE MINISTRY OF FINANCE

Circular No. 39/2010/TT-BTC of March 22, 2010, guiding the implementation of the Prime Minister’s Decision No. 12/2010/QD-TTg of February 12, 2010, on the extension of time limits for enterprise income tax payment to further remove difficulties for enterprises, contributing to boosting economic development in 2010

Pursuant to the Law on Enterprise Income Tax and its guiding documents;

Pursuant to the Law on Tax Administration and its guiding documents;

Pursuant to the National Assembly’s Resolution No. 37/2009/QH12 of November 11, 2009, on the 2010 state budget estimates;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Prime Minister’s Decision No. 12/2010/QD-TTg of February 12, 2010, on the extension of time limits for enterprise income tax payment to further remove difficulties for enterprises, contributing to boosting economic development in 2010;

The Ministry of Finance guides the implementation of Decision No. 12/2010/QD-TTg as follows:

Article 1. General provisions

Tax payment time limits prescribed in the Law on Tax Administration will be extended for 3 months for:

1. Enterprise income tax amounts payable in 2010 by small- and medium-sized enterprises.

Small- and medium-sized enterprises eligible for tax payment time limit extension are those (including also cooperatives, people’s credit funds, enterprises’ affiliated units with independent accounting, economic groups’ or corporations’ member units with independent accounting and the legal entity status, non-business units having revenues, and local development investment funds) which satisfy the capital or labor criterion specified in Clause 1, Article 3 of the Government’s Decree No. 56/2009/ND-CP of June 30, 2009, on supports for development of small- and medium-sized enterprises.

Capital amounts used as a basis for identifying enterprises eligible for enterprise income tax payment time limit extension in 2010 are those shown in these enterprises’ accounting balance sheets made on December 31, 2009. For new small- and medium-sized enterprises’ founded on or after January 1, 2010, capital amounts used as a basis for identifying their eligibility for enterprise income tax payment time limit extension in 2010 are charter capital amounts indicated in their business registration certificates or first-time investment certificates.

The annual average number of employees shall be determined on the basis of the total number of regularly employed laborers (excluding laborers employed under labor contracts of a term of under 3 months) in an enterprise by the end of December 31, 2009. For new small- and medium-sized enterprises founded on or after January 1, 2010, the average number of employees for use as a basis for identifying their eligibility for enterprise income tax time limit extension in 2010 is 300 or less (for agricultural, forestry, fishery, industrial and construction enterprises) or 100 or less (for commercial and tourist enterprises) who are salaried or remunerated in the first month (full 30 days) of turnover generation in 2010.

2. Enterprise income tax amounts payable in 2010 for incomes from textile, garment, leather and footwear production or processing operations

If enterprises are unable to separately account incomes from production or business operations eligible for tax payment time limit extension (textile, garment, leather and footwear production or processing), their enterprise income tax amounts eligible for tax payment time limit extension shall be determined according to the proportion of turnover from these production or business operations to the total turnover from their production or business operations in each quarter of time limit extension or in 2010.

Eligible for tax payment time limit extension specified in this Clause are textile, garment, leather and footwear production or processing operations indicated in the business registration certificates or investment certificates and actually conducted by enterprises.

3. The tax payment time limit extension specified in Clauses 1 and 2 of this Article is applicable to enterprises that implement the accounting, invoice and document regimes and register declaration-based tax payment.

Article 2. Determination of enterprise income tax amounts eligible for time limit extension

1. For small- and medium-sized enterprises, these enterprise income tax amounts are those temporarily calculated on a quarterly basis, including also the positive difference between tax amounts finalized upon declaration of 2010 tax finalizations by enterprises and total tax amounts temporarily calculated and paid for the four quarters of 2010.

In case small- and medium-sized enterprises declare and pay enterprise income tax for incomes from real estate transfer upon each time of generation, enterprise income tax amounts eligible for time limit extension are those temporarily calculated upon each time of generation and those finalized for incomes from real estate transfer.

2. For textile, garment, leather and footwear production or processing enterprises, enterprise income tax amounts eligible for time limit extension are those temporarily calculated on a quarterly basis and those finalized in 2010 for incomes from textile, garment, leather and footwear production or processing operations.

Textile, garment, leather and footwear production or processing operations used as a basis for tax payment time limit extension comply with the Prime Minister’s Decision No. 10/2007/QD-TTg of January 23, 2007, promulgating Vietnam’s system of economic sectors, and guiding documents.

Article 3. Extended periods of enterprise income tax payment time limits

Enterprises shall declare their enterprise income tax amounts to be temporarily paid on a quarterly basis and finalize their enterprise income tax amounts payable in 2010 under the Law on Tax Administration. The extended periods of tax payment time limits must not exceed 3 months from the deadlines specified in the Law on Tax Administration as follows:

1. The new deadline for the payment of tax amounts calculated for temporary payment for the first quarter of 2010 will be July 30, 2010.

2. The new deadline for the payment of tax amounts calculated for temporary payment for the second quarter of 2010 will be October 30, 2010.

3. The new deadline for the payment of tax amounts calculated for temporary payment for the third quarter of 2010 will be January 31, 2011.

4.  The new deadline for the payment of tax amounts calculated for temporary payment for the fourth quarter of 2010 will be April 30, 2011.

5. The positive difference between enterprise income tax amounts eligible for time limit extension upon declaration of 2010 tax finalization by enterprises (finalized amounts) and total tax amounts temporarily calculated and paid for the fourth quarter of 2010 will be eligible for the new tax payment deadline of June 30, 2011.

Enterprises that finalize their 2010 enterprise income tax amounts by themselves earn enterprise income tax amounts eligible for time limit extension smaller than total tax amounts already calculated and paid for the four quarters of 2010 shall compile dossiers of additional declaration for adjustment under Point 5.1, Section I, Part B of the Ministry of Finance’s Circular No. 60/2007/TT-BTC of June 14, 2007, guiding the implementation of a number of articles of the Law on Tax Administration, and the Government’s Decree No. 85/2007/ND-CP of May 25, 2007, detailing the implementation of a number of articles of the Law on Tax Administration.

6. Small- and medium-sized enterprises which declare and pay enterprise income tax for incomes from real estate transfer upon each time of generation shall themselves determine the tax payment time limit extension not exceeding 3 months from the tax payment deadline under the law on tax administration.

Article 4. Order and procedures for tax payment time limit extension

1. Enterprises eligible for tax payment time limit extension shall make returns of enterprise income tax temporarily calculated on a quarterly basis and declarations of 2010 enterprise income tax finalization under current regulations, additionally indicating the proposed extension of the tax payment time limit on the line of commitment in a declaration.

2. During the extended period of the tax payment time limit, enterprises are not regarded as having delayed tax payment and will not be administratively sanctioned for delayed tax payment with respect to tax amounts eligible for time limit extension.

Article 5. Effect and organization of implementation

1. This Circular takes effect on April 10, 2010 (the effective date of Decision No. 12/2010/QD-TTg).

2. Any problems arising in the course of implementation should be reported to the Ministry of Finance for timely guidance or settlement.-

For the Minister of Finance
Deputy Minister
DO HOANG ANH TUAN