05 Feb How to calculate CIT in Vietnam?

Calculating profit for the purpose of Corporate Income Tax (CIT) calculation involves determining a company’s taxable income, which is the amount of profit on which the tax is levied. Here are three concrete examples to demonstrate the calculation of taxable income:

Example 1: A retail company The retail company’s revenue for the year is VND 100,000,000 and its expenses for the year are VND 90,000,000. The taxable income can be calculated as follows: Taxable income = Revenue – Expenses = VND 100,000,000 – VND 90,000,000 = VND 10,000,000

Example 2: A manufacturing company The manufacturing company’s revenue for the year is VND 200,000,000 and its expenses for the year are VND 180,000,000. However, the company also has depreciation expenses of VND 10,000,000 for the year. The taxable income can be calculated as follows: Taxable income = Revenue – (Expenses + Depreciation) = VND 200,000,000 – (VND 180,000,000 + VND 10,000,000) = VND 10,000,000

Example 3: A service company The service company’s revenue for the year is VND 150,000,000 and its expenses for the year are VND 140,000,000. The company also has interest expenses of VND 5,000,000 for the year. The taxable income can be calculated as follows: Taxable income = Revenue – (Expenses + Interest) = VND 150,000,000 – (VND 140,000,000 + VND 5,000,000) = VND 5,000,000

It is important to note that the above examples are for illustration purposes only and may not reflect the actual calculation of taxable income in Vietnam, as the country has its own set of regulations and rules for calculating taxable income. It is recommended that a company seek the guidance of an experienced accounting firm to accurately calculate its taxable income and comply with relevant regulations.

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