Special news – June 2020

In this issue:

Decree 68/2020/ND-CP amends and supplements Decree 20/2017 on determining deductible interest expenses for enterprises having transfer pricing transactions, which have just been issued on June 24, 2020.

Accordingly, there are 2 remarkable contents as follows:

1. Deductible interest expenses for the 2020 tax period:

  • The deductible interest expense incurred in the period is equal the total interest expense minus income from deposit and loan interests, which which increase the maximum deduction from 20% * EBITDA to 30% * EBITDA;
  • The non-deductible interest expense shall be carried forward to the next tax period when determining the total of deductible interest expense, if only the total deductible interest expense incurred in the next tax period is lower than the prescribed level;
  • Such non-deductible interest expense shall be carried forward continuously but no later than 05 years from the year of incur.

2. Retroactive for FY2017, 2018:

  • The taxpayer may submit additional declaration for FY2017 and 2018, to determine the interest expense, the corresponding payable CIT amount (if any), before January 1, 2021.
  • In case the taxpayer has paid surplus, the overpaid amount shall be offset in subsequent years, but not exceed 5 years from FY2020. At the end of such period, remaining overpaid amount will not be deducted.
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