i. What are “other taxable incomes”?
As mentioned in the Article “Taxable And Tax-Exempt Incomes In Corporate Income Tax”, taxable incomes include: (i) incomes from goods and service production and business activities and (ii) other taxable incomes.
Other taxable incomes comprise all types of income derived by business entities not being income from activities of production and business in goods and services. This Article will focus on such incomes.
ii. Typical types of other taxable incomes
Other taxable incomes mainly include the followings:
– Income from capital transfer, securities transfer
– Income from real estate transfer
– Income from transfer of investment projects; transfer the right to participate in an investment project; transfer the right to explore, exploit and process minerals in accordance with the law.
– Income from the ownership, the right to use property
– Income from property rental in any form.
– Incomes from property transfer, liquidation (except real estate), other valuable papers.
– Income from deposit interest, loan interest includes deferred interest, installment interest, credit guarantee fee and other fees in loan contract.
– Income from the sale of foreign currencies
– Income from exchange rate differences
– Bad debts written off are now recovered.
– Payable debts of unidentifiable creditors.
– Income from production and business activities of the previous years is overlooked discovered.
– In case the enterprise has revenues from fines, compensation due to breach of contract by the counterparty or the bonuses due to good performance of contractual commitments are higher than the payment of fines, compensation money due to violation contract (these fines do not belong to fines for administrative violations as prescribed by law on handling of administrative violations), after clearing, the remaining difference shall be included in other income.
– Difference due to reassessment of assets according to the provisions of law for capital contribution, to transfer of assets upon division, separation, consolidation, merger or conversion of enterprise type (except for equitization, reorganization Enterprise renewal with 100% state capital)
– Presents and gifts in cash and in kind
– Amounts of money, property, and other material benefits
– Accruals in expenses
– Incomes related to the sale of goods and services are not included in revenue
– Income from consumption of scrap and defective products after deducting the cost of recovery and consumption
– Export tax refund, import tax
– Incomes from capital contribution activities, joint ventures and associates
iii. Why “other taxable incomes” are important?
Such taxable incomes are various and should be paid attention to due to the following reasons:
– Having a full understanding of these taxable income gives the company a complete overview of the types of incomes subject to corporate income tax.
– Determining exactly what kind of income the company is in which in these items (except incomes from production and business activities) will help companies determine the correct amount of tax payable.
– Full compliance with corporate income tax regulations will contribute to good internal compliance, also avoid being subject to administrative sanctions.