Data of Lion Co.

, a company operating in air-conditioner production, in the tax year N, are as follow:

Turnover report
-          Air-con with capacity of 12,000 BTU: 10,000 units sold at before-VAT price of VND11 mil
-          Air-con with capacity of 100,000 BTU: 1,000 units sold at before-VAT price of VND44 mil
Expense report
-          Depreciation compliant with stipulations by law: VND10,000 mil
-          Material with legitimate invoice: VND80,000 mil
-          Salaries and remuneration expenses with legitimate vouchers: VND20,000 mil of which VND1,000 mil paid to
-          Asset rent paid in advance for 5 years: VND10,000 mil
-          Input VAT qualified: VND9,000 mil
-          Other deductible expenses apart from excise duty: VND8,000 mil.
Other relevant information
-          Interest expense: VND6,000 mil of which VND2,000 mil is equivalent to the deficit of charter capital
-          VAT and excise duty applicable is 10%
-          CIT is applicable at standard rate
-          Losses carried forward is VND2,000 mil
Required: Calculate VAT, excise duty and CIT payable by Lion Co. for the tax period.

Taxable Revenue
12,000 BTU excisable (Air-con with capacity of 1
100,000 BTU non-excisable 44000 44,000
Less: Deductible expenses
Depreciation in compliance with regulations 10,000.00
Material with legitimate invoice 80,000.00
Salaries 19,000.00
Rent expense paid in advance 2,000.00
Other deductible expenses apart from excise duty 8,000.00 119,000
Operating income (75,000)
Less: Interest expense 4,000
Taxable income for the year (79,000)
Less: Losses carried forward 2,000
Taxed income (81,000)
CIT rate 0
CIT payable for tax year (16,200)

VAT Output VAT = 10%*154,000 15400

Deductible input VAT 9,000
VAT payable 6,400

Excise duty payable 10000

 VND million

ich VND1,000 mil paid to the founding members of companies who do not directly take part in business management

charter capital

(Air-con with capacity of 12,000 BTU is applied 10% of excise duty so taxable revenue of 12,000 BT air-con has to exclusive of excise duty)
management

exclusive of excise duty)

Data available in tax year 2020 of Corona Co. as follow:
1. Accounting profit from main business operations is VND 1,000 million, which includes the following ex
-          Salary for employees: 1,200 mil of which 90% was paid before CIT finalization of the year
-          Uniform for sales staff (20 employees): VND125 mil (all in cash)

-          Donations for Youth Union’s summer volunteer programs: VND 10 million

-          Penalty for late delivery of goods: VND 20 million
-          PIT on net salary: VND 200 mil
-          Depreciation: 200mil of which 84 mil is for the leased store
-         Materials purchased with proper invoices: 800mil, of which 100mil was for those totally damaged during trans
2. Other incomes and expenses
-          Profit received from an investment project in country X after payment of CIT for this country at 25%: VND 1,1
-          Interest revenue on loans granted to affiliates: VND 50 million
-          Interest expense payable to banks to finance project in country X: VND 20 million
-          Rent revenue from leasing of a store: 240 mil
3. Other information
-          All of the turnovers and expenses are supported with legitimate documents stipulated by law
- Corona Co. established 7% STDF
-          Standard CIT rate is applicable to this company
Required:
1.  Specify non-deductible expenses with appropriate explanation and calculation.
2.  Determine CIT payable of Corona Co. for domestic operations
3.  Calculate total CIT payable of Corona Co. for all activities.
4.  Given that after 5 years, the STDF of 2020 will be used up 60%, determine any amount of penalty that Corona C
Provided that the interest rate of 1 year T-bond will be 12% after 5 years.
 1. Non-deductible expenses
h includes the following expenses: - Salary for employees: 10%
- Uniform (20 employees)

- Donations for Youth Union'

- Penalty for late delivery of
- PIT on net salary 200 mil is
- Depreciation: 84 mil is for t
otally damaged during transportation and compensated fully by transporting company. - Materials purchased: 800 m
2. CIT payable for domestic o
his country at 25%: VND 1,125 million (Accounting) opearting profi

Add: Non-deductible expens

Salary for employees (unpaid
Excessive Uniform
lated by law Donation for Youth Union
Depreciation on leased asset
Compensated damaged mat

(taxable) Operating income

Other income
unt of penalty that Corona Co. must submit to the government. Add: Net Interest revenue (5
Add: Rent income (240-84)

Taxable income for the perio

STDF

CIT payable on domestic ope

Income from oversea projec

Total CIT payable for all activ

Review of the use of STDF (a

1. Non-deductible expenses
- Salary for employees: 10% has not been paid so 120 mil is non-deductible
- Uniform (20 employees)
In cash: Cap = 20*5 = 100 mil
So 25 mil is non-deductible
- Donations for Youth Union's summer volunteer programs is non-deductible because it is not related to deductible fields: education,
- Penalty for late delivery of goods is deductible (violate commercial contract)
- PIT on net salary 200 mil is deductible because PIT is paid by employer and it is the reasonable expense of company
- Depreciation: 84 mil is for the leased store - not used in business so non-deductible
- Materials purchased: 800 mil is deductible, in which 100 mil was damaged and compensated so 100 mil is non-deductible
2. CIT payable for domestic operations
(Accounting) opearting profit 1,000 Taxable income = Taxable revenue -

Add: Non-deductible expenses Assume: Taxable revenue = Accounti

Salary for employees (unpaid) 120 Accounting expenses = Deductible e
Excessive Uniform 25 Deductible expense = Acc
Donation for Youth Union 10
Depreciation on leased asset 84
Compensated damaged materials 100 339 Taxable income = Accounting revenu
Taxable income = Accounting profit
(taxable) Operating income 1,339

Other income
Add: Net Interest revenue (50-20) 30
Add: Rent income (240-84) 156

Taxable income for the period = Taxed income 1,525

7% 106.75
1,418
CIT payable on domestic operations 20% 283.65
Income from oversea project
EAT 1,125
EBT (1,125/(1-0.25)) 1,500
VN CIT 20% 300
CIT paid oversea 25% 375
Further CIT payable on oversea income in VN 0
Total CIT payable for all activities 283.65

Review of the use of STDF (after 5 years)

Used 60%
Since the fund is used less than 70%, company will have to remit CIT along with penalty to the government as follow:
Unused amount 40% 42.7
CIT (@2020) 20% 8.54
Penalty 12% 2 2.0496
Total payment 10.5896
ductible fields: education, medical,…

non-deductible

come = Taxable revenue - Deductible expenses

axable revenue = Accounting revenue

g expenses = Deductible expenses + Non-deductible expenses
Deductible expense = Accounting expenses - Non-deductible expenses

come = Accounting revenue - (Accounting expenes - Non-deductible expenses)

come = Accounting profit + Non-deductible expenses

nment as follow:
Data available for Mousie, a private company engaging in production and trading for the year 2020 as follow (in VND mil
1.  Income from main business operations is 1,500; which includes the following expenses:
-          Cost of goods sold: 7,200 (inclusive of cost of goods returned of 120, Net sales turnover has been properly adjuste
-          Salary paid to employees: 2,600; of which 560 is for 2 members of Board of directors who are not directly involved
-          Statutory deductions from salary in accordance with regulation: 184
-          Extra pay for employees on Independence day, which is not specified in labor contract: 25
-          Depreciation on fixed assets: 280; of which 65 is depreciation on historical cost of under-10-seat cars in excess of V
-          Donation directly to victims of a storm: 15
-          Donation to Youth Union: 20
-          Donations for building houses for the poor through Provincial People’s Committee: 60
-          Office rent lump-sum which was paid in January of 2016 for 3 consecutive years: 1,080
-          Penalty for late payment of import tax: 15
2.      Other incomes and expenses
-          Interest expense: 160, of which 80 is paid to commercial banks and the remaining is paid to company’s employees
-          Liquidation of fixed assets: historical cost of 180, accumulated depreciation up to time of liquidation of 75, liquida
-          Income received from a joint venture with a Vietnamese company on which CIT has been paid: 300
-          Fines receivable for customer’s breaches of contract: 15
-          Fines payable for contract breach: 22
Required:
Determine the amount of Corporate income tax payable by Mousie for this tax period. Given that:
-          All of the turnovers and expenses are supported with legitimate documents stipulated by law
-          This company has 50 employees
-          Company sets up STDF at maximum level in accordance with law
-          Standard CIT rate is applicable to this company
-          The base interest rate announced by the State bank of Vietnam is 9% per annum

(Accounting) Operating profit

Add: Non-Deductible expenses
COGS returned 120
Salary paid to non-executive directors 560
Non-specified extra pay for employees 25
Excessive depreciation on car of less than 10 seat 65
Donations for victims of storm 15
Donations for Youth Union 20
Expired Office rent 1,080
Import tax penalty 15
(Taxable) Operating income
Other income
Less: Interest expense (80+80*1.5*9/18)
Add: Gain from disposal of fixed asset (120-(180-75)
Loss: Net fines payable (15-22)
Add: Distributed profit (gross of CIT: 300/0.8)
Less: Exempt income
Distributed profit (CIT has been paid before distribution)
Taxable income for the year = Taxed income
STDF 10%
CIT payable for the year 20%
ear 2020 as follow (in VND million):

ver has been properly adjusted)

who are not directly involved in business management

der-10-seat cars in excess of VND 1.6 billion

paid to company’s employees at rate of 18% per year

me of liquidation of 75, liquidation value received of 120
been paid: 300

1,500

1,900
3,400

(140) 160
15 80 bank deductible 80
(7) 80 employeesdeducitble 150% 9% 13.500% 60
375 18% 140

(375)
3,268
326.8
2,941
588.24
Covid Co.’s financial records provide the following information:
Revenue exclusive of VAT: VND20,000 million of which, VND8,000 comes from exported goods;
VND12,000 million earned from domestic sale of an excisable item which subject to excise duty of 20%
Total declared expenses: VND16,000 million, of which:
-          Donation with legitimate vouchers for construction of a hospital: VND 200mil
-          Donation to Student Union and Youth Union of Hanoi: VND50 million each
-          Depreciation of a 5-seat car corresponding to the excess of the historical cost of VND1.6 billion: VND200 mil
-          Creditable input VAT: VND320 mil
-          Office rent paid in advance for 5 years: VND2,500 mill
-          Outfits given to employees, 50% in cash (VND1.5 mil/employee) and 50% in kind: VND120 mil
Other incomes: VND300 mil from a scientific contract for which the license has been granted.
Losses from previous year which has not been offset: VND120 mil
Income earned from a project in Cambodia, which is net of Cambodia’s 15% CIT: VND 2,975 mil
Required: Calculate CIT payable for Covid Co. in this period. Given that no CIT incentive is currently given to this co
Transactions are backed with sufficient invoices as prescribed.

Export 8,000
Domestic 10,000
Total taxable revenue 18,000
Less: Deductible expenses
Total declared expenses 16,000
Less: Non-deductible expenses
Donation for Youth Union 50
Excessive depreciation on 5-seat car 200
Credited input VAT 320
Office rent 2000
13,430
Operating income 4,570
Add: Other income
Scientific contract 300
Less: Exempt income
Scientific contract (300)
Taxable income of current year 4,570
Less: Losses carried forward (120)
Taxed income 4,450
CIT rate (20%) 20%
CIT payable in domestic operations 890

Income from Oversea project

EAT 2,975
EBT 3,500
VN CIT 20% 700
CIT paid oversea 15% 525
Further CIT payable on oversea income in VN 175
Total CIT payable 1,065
excise duty of 20%

VND1.6 billion: VND200 mil

d: VND120 mil

ve is currently given to this company.

(non-excisable)
(12,000 mil is excise inclusive)