On September 25, 2020, the Government issued Decree No. 114/2020/ND-CP, detailing
the implementation of the National Assembly's Resolution No. 116/2020/QH14 on
corporate income tax (“CIT”) payable in 2020 for enterprises, cooperatives, non-business
units and other organizations (“Decree 114/2020/ND-CP“).

Accordingly, some notes on the reduction of CIT payable in 2020, specifically as follows:

1. Notes on the reduced CIT amount:

– The reduced CIT amount of the CIT period 2020 is calculated on the entire income of the
enterprise, including the incomes specified in Clause 3, Article 18 of the Law on CIT.

– The reduced CIT amount specified in Decree 114/2020/ND-CP is calculated on the
payable CIT amount of the CIT period 2020, after deducting the CIT amount that
enterprises are enjoying preferential treatment according to the provisions of the Law on
CIT and its guiding documents.

2. Notes on the CIT period:

– The CIT period is determined according to the calendar year, if the enterprise applies a
fiscal year different from the calendar year, the CIT period is determined according to the
fiscal year specified in the Law on CIT and its guiding documents.

– In case the first tax period is 2019 (for a newly established enterprise) or the last tax period
is 2021 (for an enterprise transforming enterprise type, form of ownership, consolidation,
merger, division, dissolution, bankruptcy), for a period of less than 03 months => then this
tax period is added to the CIT period 2020 (Note: Determination of total revenue and the
reduced tax in this case only applies to the CIT period 2020 within 12 months).

3. The value of the Decree 114/2020/ND-CP provides:

– It is a supporting policy from the state to help enterprises overcome difficult times due to
the impact of the Covid-19 epidemic;

– It is the capital facilitation for enterprises to develop production and business, improve
competitiveness, expand production scale;

– It is a measure to maintain long-term revenues for the state budget.

Above is the news: Some notes on the reduction of CIT payable in 2020, Decree No.
114/2020/ND-CP.

Decree No. 114/2020/ND-CP takes effect from the effective date of Resolution No.
116/2020/QH14 and applies to the CIT period 2020, interpreted as August 3, 2020.

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