New features of implementing Law on Enterprise Income Tax
Ministry of Finance just issued Circular No. 123/2012/TT-BTC guiding implementation of Law on Enterprise Income Tax, of government’s Decrees No. 124/2008/ND-CP and 122/2011/ND-CP detailing implementation of some articles of Law on Enterprise Income Tax. Accordingly, calculation of costs deductible to taxable income shall be in new regime. The life insurance premium of employee is only deductible once informed in employment contracts and company financial regulations; suppliers’ commission of multi-level marketing companies is not limited to 10% of excessive amounts comparing to total deductible amounts.As for calculation of enterprise income in asset leasing during favorable income taxation stage, if the enterprise ‘chooses’ to calculate the taxable revenue as the total prepayments of the lessee in years, then, the deductible amounts should be such total prepayments divided by numbers of years prepaid.For golf court renting activities, the membership pre-paid golf tickets for years should be the basis amounts for income tax calculation by dividing the actual prepayments by numbers of years that the ticket is used.The Circular comes into force from and on September 10, 2012 superceding Circulars No. 130/2008/TT-BTC, No. 177/2009/TT-BTC, No. 40/2010/TT-BTC, and No. 18/2011/TT-BTC of Ministry of Finance.Reported by Thanh Hong – Translated by Vi Bao
