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Corporate Income Tax Essay

1325 words - 6 pages

Exercise 1
Enterprise A in the current tax year has the following activities (unit: million dong):
a. Revenue from sales of goods: 20,000, including the value of returned goods of 2,000.
b. Expenses declared by the enterprise for tax purpose are 16,000 (with legitimate invoices and documents). Including:
* Depreciation expense of a 7-seat car (with the primary price of 2.4 billion VND, used by the Director. The car is depreciated using straight-line method within the period of 8 years): 300.
* Expense for building medical facilities for employees: 100.
* Salary and wages (according to labor contracts): 2,000; in which 400 is the remuneration of members of Board of Directors ...view middle of the document...

* Depreciation expenses according to current regulations: 800, in which 50 is the depreciation expense of an operating lease asset and 100 is the depreciation expense of a lease-purchase asset.
* Expense for buying life insurance contracts for employees (not specified in labour contracts): 100
* Rewards for innovation ideas: 200
* Efficiency bonuses for employees: 50
* Work outfits expense in cash: 300
* Interest expense for a loan from corporation B: 250; the interest rate written on the loan contract is 20%.
* Funding for buying study equipments for Kim Lien elementary: 50.
* Other expenses are deductible.
c. Other incomes:
* Income from providing harvesting service: 120.
* Income from a science research contract (this is the 4th year the enterprise receives income from this contract): 150
* Income from domestic contribution of equity capital to company B; enterprise X receives its share of income after company B pays CIT: 300.
Calculate the CIT payable of the enterprise in the tax year. Given:
* The enterpise has not organized a council for test and acceptance of innovations and improvements.
* The efficiency bonus is not specified in the labour contracts.
* The prime interest rate announced by the State Bank of Vietnam at the time of the loan contract: 12%; the enterprise has fully contributed its charter capital.
* The number of employees in the enterprise: 50.
* The CIT rate is according to current regulation. The excise tax rate of excise taxable goods is 50%. The enterprise did not receive any tax exemption or reduction in the tax year.

Exercise 3

AN PHAT Corporation in the current tax period has the following activities (unit: million VND)
a. Revenue from sales of goods: 30,000; including revenue from sales of Excise-taxable goods of 2,000.
b. Expenses declared by the enterprise for tax purpose are 20,000 (with legitimate invoices and documents and do not include the excise tax payable). Including:
* Depreciation expenses according to current regulations: 500, in which 50 is the depreciation expense of a machine which has been fully depreciated but still used for production
* Material expenses according to production norm (VAT-inclusive): 3,300.
* Research and development expense: 300.
* Medical expenses for employees: 50.
* Expense of renting fixed asset: 400 (prepaid for 2 years)
* Funding for building houses for the poor: 160
* Donations for local women association: 10
* Other expenses are deductible.
c. Other incomes:
* Income from leasing fixed asset: 200.
* Income from international investments: 1,200. This is the income after paying corporate income tax in the foreign country with the tax rate of 40%.
Calculate the CIT payable of the enterprise in the tax year. Given:
* The company pay VAT using the credit-invoice method.
* The company does not have a science research and technology development fund; 1/3 of the research...

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