Corporate income tax settlement is an important step for businesses to accurately determine the amount of tax payable in the fiscal year, while complying with tax laws and avoiding the risk of being penalized for false declarations or underpayments. In reality, many businesses have difficulty compiling financial reports, comparing provisional tax data and adjusting non-deductible expenses.
Recent, Da Nang City Tax Department has issued a decision to sanction administrative violations in the field of tax against Da Nang Pharmaceutical - Medical Equipment Joint Stock Company (Dapharco). This enterprise has declared incorrectly, leading to a shortage of value-added tax (VAT) payable in the tax periods of 2023 and 2024, and declared incorrectly corporate income tax (CIT) in the years 2022-2024. This act violated the provisions of the Law on Tax Administration, resulting in a total amount of tax arrears and fines of nearly 1 billion VND.
The case of Dapharco is a clear reminder of the importance of preparing complete documents, checking accurate figures and performing corporate income tax settlement in accordance with regulations. Enterprises need to master the process, deadlines and important notes to avoid the risk of being charged back, fined, and at the same time ensure transparency and compliance with tax laws throughout the entire fiscal year.
What is corporate income tax settlement?
Corporate income tax settlement is the activity of synthesizing, comparing and determining the amount of tax. corporate income tax The actual amount payable by a business in a fiscal year. This is the final step in the annual corporate income tax declaration process, to ensure that the business has paid the full amount, without any shortage or excess of tax. This activity helps businesses accurately control their tax obligations, while ensuring compliance with current legal regulations.
Performing corporate income tax finalization brings many practical benefits, including helping businesses avoid the risk of being penalized for incorrect declaration or underpayment of tax. In addition, this is also the basis for tax authorities to check and compare declarations submitted during the year, thereby ensuring financial transparency and enhancing the reputation of businesses before management agencies.
Legal basis related to corporate income tax settlement
To properly settle corporate income tax, businesses need to have a firm grasp of important legal bases. These documents provide detailed instructions on how to calculate taxes, prepare declarations, submit documents and handle violations related to corporate income tax settlement. The table below summarizes the basic legal documents that businesses need to refer to before making settlement:
| Legal basis | Main content |
| Corporate Income Tax Law 2019 | Prescribe principles for tax calculation, declaration and settlement. |
| Circular 80/2021/TT-BTC | Instructions on how to prepare corporate income tax finalization declaration (form 03/TNDN) and attached appendix. |
| Decree 126/2020/ND-CP | Regulations on tax management and handling of violations in corporate income tax settlement. |
| Official dispatch 1909/BTC-TCT | Instructions to answer some questions when preparing corporate income tax finalization declaration. |
When must businesses make corporate income tax settlement?
Enterprises must make corporate income tax finalization in case of taxable income arising in the fiscal year. This applies to all enterprises that have conducted business activities, regardless of whether profits have arisen or not, to ensure that tax obligations are accurately determined. In addition, enterprises that have made provisional tax payments on a quarterly or monthly basis are also required to summarize and compare the tax paid with the actual tax incurred to make finalization.
In addition, at the end of the fiscal year and when preparing the annual financial report, the enterprise needs to perform the corporate income tax finalization to determine the tax arrears or the tax refund. This activity helps ensure that the actual tax paid matches the actual tax incurred, avoids the risk of errors in tax declaration and payment, and at the same time creates a basis for financial transparency for the enterprise before the tax authority.
Cases not required to settle corporate income tax
Although most businesses are required to make corporate income tax finalization, there are some exceptions stipulated by law. These cases are not required to make corporate income tax finalization declarations because they have not yet incurred tax obligations or are subject to tax exemption. The table below summarizes the cases where businesses are not required to make corporate income tax finalization:
| Case | Detail |
| Newly established enterprise but has not yet generated revenue or taxable income | Enterprises that have not yet conducted business or generated taxable income during the year are not required to make corporate income tax finalization. |
| Enterprises are exempted from corporate income tax under preferential policies. | Applicable to enterprises enjoying investment incentives, industrial zones, and special projects according to the provisions of law. |
| Accounting units dependent on the State budget or public service units | These units are not subject to corporate income tax so do not need to make corporate income tax finalization. |
Corporate income tax settlement process
The implementation of corporate income tax settlement must comply with strict procedures to ensure accurate and timely data according to the law. This process consists of 4 basic steps, each step has its own requirements and notes that businesses need to implement.
Step 1: Prepare documents
Before making a final tax declaration, the enterprise needs to prepare all relevant documents. These documents are the basis for accurately calculating the amount of corporate income tax payable and ensuring that the declaration and payment of tax are carried out in accordance with the law. The table below summarizes the important documents that the enterprise needs to prepare before making a final tax declaration.
| File | Detail |
| Annual financial report | – Includes balance sheet, income statement and cash flow statement.
– The data in the report must match the accounting books and invoices and documents. |
| Corporate income tax finalization declaration (form 03/TNDN) | – Is a mandatory form prescribed by the General Department of Taxation.
– Must fill in complete information about the business, revenue, expenses and taxes paid. |
| Corporate income tax declaration appendices | – Including adjustments to increase/decrease taxable income, non-deductible expenses, tax incentives (if any). |
Step 2: Prepare corporate income tax finalization declaration
After preparing all the documents, the enterprise proceeds to make a corporate income tax finalization declaration. This is an important step to summarize, compare and accurately determine the amount of corporate income tax payable. The declaration process must be carried out carefully to ensure accurate information and data, avoiding errors that may lead to the risk of fines or tax arrears. The specific steps include:
Enter business information
Before starting to fill in the financial data, the first step in the process of preparing the corporate income tax finalization declaration is to enter the business information. This is an important step because all basic information about the business will directly affect the validity of the declaration. Filling in this information completely and accurately helps ensure that the finalization dossier is accepted and avoids administrative errors when the tax authority checks.
- Fill in the business name, tax code, fiscal year, address and other relevant information completely and accurately.
- This information must match the legal records, business registration certificate and financial statements of the enterprise.
- Please check the information carefully before saving the declaration to avoid administrative errors from the tax authorities.
Enter financial data
After filling in all the basic information about the business, the next step in the process of preparing the corporate income tax declaration is to enter the financial data. This is an important step to accurately determine the amount of corporate income tax payable or the amount of tax refunded. Filling in the data related to revenue, expenses and provisional tax completely and accurately helps ensure that the declaration accurately reflects the actual financial situation of the business and complies with the law.
- Fill in the revenue, deductible expenses, deductions and provisional taxes for the fiscal year.
- The figures must match the financial statements and accounting books, ensuring there are no errors in the figures for taxable income or deductible expenses.
- Accurately entering these figures is the basis for determining the actual corporate income tax payable or the tax refund.
Check the indicators on the declaration
After entering all the business information and financial data, the next step in preparing the corporate income tax finalization declaration is to check the indicators on the declaration. This is an important step to ensure that all data on taxable income, deductible expenses and tax incentives are declared accurately. A thorough check helps to promptly detect errors, adjust discrepancies and avoid the risk of being fined for incorrect declaration or underpayment of corporate income tax.
- Carefully check the taxable income, deductible expenses and tax incentives (if any).
- Compare the amount of tax provisionally paid with the actual amount of tax payable, promptly detect differences for adjustment.
- This inspection process helps businesses avoid false declarations and underpayments of corporate income tax and ensures complete and legal settlement records before tax authorities.
Step 3: Submit the application form and accompanying documents
After the corporate income tax finalization declaration has been prepared and checked correctly, the next step is to submit the declaration and accompanying documents. Enterprises can submit documents via the online system or directly at the tax authority, and need to pay attention to the deadline and receipt to ensure the settlement process goes smoothly, avoiding the risk of being penalized.
| Application form | Detail |
| Submit via the electronic portal of the General Department of Taxation | – Use HTKK or eTax software to submit online.
– System confirms receipt of documents and issues electronic receipts. |
| Submit directly to the tax authority | – In case the enterprise has difficulty submitting online, the application can be submitted directly to the tax authority.
– You need to keep the application receipt for future reference. |
Step 4: Tracking and processing after submission
After the enterprise has submitted a complete corporate income tax settlement dossier, the next step is to monitor and handle requests from the tax authorities. This is an important step to ensure that the dossier is received, approved and the settlement process goes smoothly. Careful monitoring helps the enterprise detect problems early, supplement the dossier when necessary and confirm the completion of the settlement in accordance with legal regulations.
Track feedback from tax authorities
After submitting the corporate income tax settlement dossier, enterprises need to proactively monitor responses from the tax authorities. This includes checking emails, notifications on the HTKK or eTax system to grasp the status of the dossier. Confirming that the dossier has been successfully received and has no technical errors or information errors is very important, helping enterprises promptly detect and handle arising problems, avoiding delays in the tax settlement process.
Additional documents if required
In some cases, the tax authority may request the enterprise to provide additional documents, reports or relevant information. Enterprises need to do this promptly and completely for the dossier to be accepted. Responding quickly to requests from the tax authority ensures the settlement process goes smoothly and without interruption, and helps enterprises avoid the risk of penalties due to missing documents or information.
Confirmation of completion of corporate income tax settlement
When the dossier is accepted by the tax authority, the enterprise will receive confirmation of successful corporate income tax settlement. This confirmation is an important legal basis, proving that the enterprise has fully fulfilled its tax obligations during the year. Enterprises should keep receipts and related confirmations for inspection, comparison or future requests from the tax authority. Monitoring and processing of dossiers after submission helps enterprises ensure the process of corporate income tax settlement is transparent and in accordance with regulations, while minimizing the risk of being fined or having to pay taxes.
What does the corporate income tax settlement file include?
To accurately settle corporate income tax, businesses need to prepare complete documents according to regulations. This document is an important basis for calculating the amount of corporate income tax payable, ensuring transparency and legality before the tax authorities. Preparing complete and accurate documents also helps businesses avoid errors, delays or penalties during the settlement process. The table below summarizes the types of documents required:
| File | Detail |
| Corporate income tax finalization declaration (Form 03/TNDN) | Mandatory form prescribed by the General Department of Taxation, filled in with full business information, income, expense and provisional tax figures. |
| Annual financial report | Balance sheet.
- Business performance report. – Cash flow statement. The figures in the financial statements must match the accounting books and invoices and documents. |
| Appendix to corporate income tax declaration | List of corporate income tax adjustments, including non-deductible expenses, tax incentives and other adjustments. |
| Additional documents | Contracts, invoices, and documents related to expenses and income that need to be adjusted, proving the validity and accuracy of the figures on the declaration. |
Deadline for submitting corporate income tax settlement
The deadline for submitting corporate income tax finalization dossiers is an important factor that businesses need to comply with to avoid the risk of being penalized and ensure that the dossiers are approved by the tax authorities. The deadline for submission will depend on the fiscal year of the business. The table below summarizes the regulations on the deadline for submitting corporate income tax finalization dossiers:
| Business type | Deadline for submitting corporate income tax settlement dossier |
| Enterprises whose fiscal year coincides with the calendar year | By March 31 of the following year at the latest. |
| Enterprises with fiscal years other than the calendar year | No later than the last day of the third month from the end of the fiscal year. |
Penalty for late submission of corporate income tax settlement dossier
Submitting corporate income tax finalization dossiers on time is mandatory according to the law. If enterprises submit late, administrative penalties will be applied. Regulations on late payment penalties are clearly stipulated in the Tax Administration Law 2019, including penalties for late declaration submission, late tax payment penalties and cases of exemption and reduction of penalties. The table below summarizes these penalties in detail:
| Type of violation | Penalty level | Legal basis |
| Penalty for late submission of declaration | From 1 million to 5 million VND, depending on the level of violation. | Article 10, Law on Tax Administration 2019 |
| Penalty for late tax payment | Calculated based on the tax debt, from 0.03% – 0.05%/day. | Article 11, Law on Tax Administration 2019 |
| Cases of exemption and reduction of fines | The business has a legitimate reason such as natural disaster, fire or is approved by the tax authority. | Tax Administration Law 2019 |
Instructions for using HTKK software to prepare and submit corporate income tax finalization declaration
HTKK software is an official tool issued by the General Department of Taxation, supporting businesses to prepare and submit corporate income tax finalization declarations quickly and accurately. First, businesses need to install and log in to the software on their computers, ensuring they use the latest version. Then, choose the appropriate 03/TNDN declaration form, enter complete business information such as name, tax code, fiscal year, address, and accurately enter financial data from the annual report.
After completing the data entry, the enterprise can export the declaration and submit it online via HTKK, and receive an electronic receipt confirming that the dossier has been received by the tax authority. Finally, the enterprise should print the receipt and store the dossier as a basis for checking, comparing or future requests. Using HTKK software not only helps to minimize errors in declaration but also saves time and effort in the process of performing corporate income tax settlement.
Notes when settling corporate income tax
When making corporate income tax settlement, businesses need to pay attention to some important points to ensure that the records are accurate, complete and in compliance with legal regulations. The table below summarizes the necessary notes:
| Note | Detail |
| Ensure the accuracy and completeness of records | All revenue, expense, tax and adjustment data must match the accounting records and financial statements. Errors can result in returned records, delays and potential penalties. |
| Comply with application deadlines | Filing your application on time will help you avoid penalties and ensure your rights to a refund or tax incentives. Consult your accountant or tax professional if you have any questions. |
| Store corporate income tax settlement records | Keep receipts of application submissions, declarations, financial reports and related documents for inspection, comparison or handling of issues arising from tax authorities. |
| Update on legal changes | Regularly monitor tax regulations, guidance circulars and new declaration forms to ensure the settlement process is always in accordance with regulations and avoid errors. |
Frequently asked questions about corporate income tax settlement
Enterprises with taxable income, provisionally paid tax during the year and at the end of the fiscal year must make a corporate income tax finalization. Enterprises that do not generate taxable income or are exempted from tax under preferential policies will not have to make a finalization. Determining the correct finalization subject helps enterprises comply with the law and avoid the risk of being fined.
Enterprises whose fiscal year coincides with the calendar year must submit their application no later than March 31 of the following year. For enterprises whose fiscal year is different from the calendar year, the application deadline is the last day of the third month from the end of the fiscal year. Complying with this deadline helps enterprises avoid fines and ensures that their application is accepted without any problems.
Corporate income tax settlement dossier includes corporate income tax settlement declaration (Form 03/TNDN), annual financial report, tax declaration appendix, and related contracts, invoices and documents. The dossier must be complete, accurate and confirmed by the chief accountant or the person in charge of finance. Thorough preparation of the dossier helps the settlement process to be smooth and transparent.
Enterprises that submit tax declarations late will be fined from 1 to 5 million VND according to Article 10 of the 2019 Tax Administration Law, depending on the level of violation. The penalty for late tax payment is calculated based on the amount of tax owed, from 0.03% - 0.05%/day according to Article 11 of the 2019 Tax Administration Law. Knowing the penalty level helps enterprises proactively fulfill their tax obligations on time.
Enterprises can use HTKK or eTax software to prepare and submit declarations online. The system will issue an electronic receipt confirming that the application has been received, helping to reduce errors and save time compared to submitting directly to the tax authority.
Businesses will be considered for exemption or reduction of fines if there is a legitimate reason such as natural disaster, fire or approval from the tax authority. Understanding these cases helps businesses proactively explain and minimize legal risks. Which businesses must make corporate income tax settlement?
When is the deadline for submitting corporate income tax settlement?
What does the settlement file include?
What is the penalty for late submission of corporate income tax return or tax?
What software can businesses use to prepare and submit final settlement declarations?
In what cases are businesses exempted or have their fines reduced?
Conclude
Corporate income tax settlement is the final process in determining the actual tax amount that an enterprise must pay in the fiscal year. Performing a complete and accurate settlement helps enterprises comply with tax laws, reduce the risk of being penalized for false declaration or underpayment of tax, and at the same time create a transparent basis for tax authorities to check and compare. Understanding the process, documents, deadlines and related regulations will help enterprises implement corporate income tax settlement effectively and in accordance with the law.
The process of corporate income tax settlement requires businesses to prepare complete documents, check accurate data and submit documents on time. Businesses need to pay attention to important types of documents such as declaration form 03/TNDN, financial statements, tax declaration appendix and related documents. At the same time, monitoring feedback from tax authorities, supplementing documents when necessary and fully storing receipts and documents will help businesses complete settlement smoothly, transparently and minimize legal risks.
To effectively implement corporate income tax settlement, businesses can work together MAN – Master Accountant Network. Here, tax experts will provide detailed advice on documents, procedures, important notes and support businesses in preparing complete and accurate tax settlements in accordance with legal regulations. Cooperating with experts helps businesses save time, avoid errors and ensure tax obligations are performed in accordance with regulations, while optimizing tax benefits.
Service contact information at MAN – Master Accountant Network
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