New tax treatment of interest charges on loans

On June 24, 2020, the government promulgated Decree No. 68/2020 / ND-CP (“Decree 68”) amending Article 8.3 of Decree No. 20/2017 / ND-CP of February 24, 2017 regulating fiscal management companies with related transactions. [transfer pricing] (“Decree 20”) with respect to the total loan interest deductible in the assessment of taxable income for corporate tax (“IS”) purposes. Decree 68 entered into force on June 24, 2020 and will apply to companies with related transactions from the 2019 financial year.

Increase in the maximum interest rate deductible on loans

The maximum rate deductible from interest costs on loans is increased from 20% to 30% of the total net profit from operating activities for the period plus interest costs on loans (excluding interest income from deposits, current accounts and loans) and the resulting amortization charges in a given year.

Deferral of non-deductible interest charges on loans

Non-deductible interest charges on sameday loans that exceed 30% will be carried forward when determining the total deductible interest charges on loans. The maximum transfer period for non-deductible debit interest is five consecutive years, starting from the year in which the loan interest charges are not deducted.

Interest charges on loans not applicable

The deductible rate of interest costs on loans does not apply for: (i) loans from taxpayers who are credit institutions under the law on credit institutions and / or insurance organizations in under the Law on Insurance Activities; (ii) loans for official development assistance (ODA); (iii) government concessional loans implemented by the foreign borrowing method for enterprises to be re-borrowed; (iv) loans for the implementation of specific national programs (including the new rural areas program and the sustainable poverty reduction program); (v) loans to finance programs and projects related to national welfare policies (housing for resettlement, for workers, students and other public welfare projects).

Retroactive application for fiscal years 2017 and 2018

Under Decree 68, the deductible rate of 30% of interest charges on loans is applied to companies with related transactions that occurred in 2017 and 2018. Therefore, before January 1, 2021, companies must submit a supplement / a review of their declarations of finalization of the corporate tax in 2017 and 2018 to the tax authorities in order to recalculate the interest charges on loans and the corresponding amounts of corporate tax payable (if applicable). In particular,

a) if the companies have not yet been inspected / controlled by the tax authorities, they will compensate the difference between the excess CIT and late interest (if applicable) with the CIT payable in 2020. If the he year 2020 is not fully compensated, the difference will be compensated by the corporate tax payable for the next five years from 2020; and

(b) if the companies have already been inspected / controlled by the tax administration and have received an inspection finding or decision, they should request the tax administration to redefine the CIT payable and the corresponding late payment for offset the difference (if any) to the CIT payable in 2020.

However, the amount of administrative fiscal penalties (if any) will not be adjusted if businesses have already been sanctioned or if their claims are resolved through complaint resolution procedures.

New form 01

Companies must amend the disclosure statement for related transactions in accordance with the new Form 01 attached to Decree 68. This new Form 01 includes a new item 15 in Section IV, which details the loan interest charges carried over from previous periods used for determine the interest charges deductible during the fiscal year.

Read more

TC Energy of Canada sets net zero roadmap

TC Energy of Canada sets net zero roadmap Canadian energy infrastructure giant TC Energy released a new emissions reduction plan on October 26, setting out a roadmap it says would reduce its greenhouse gas (GHG) intensity by 30%. by 2030 and put it on track for net zero emissions from …

Read More »

Sudan coup victims rise as nationwide protests persist

The number of Sudanese protesters shot dead in clashes with the military after Monday’s coup rose to seven, medics said, as nationwide strikes and civil disobedience took hold and the fate of the Prime Minister remained unknown. More than 140 have been injured, according to two doctors working for the …

Read More »

Saudi Arabia and Iran want to be friends again

Times are changing ‘. Iranian leaders may not be fans of Bob Dylan, but his words are likely to resonate as they consider their next steps in Iraq, Iraqi Kurdistan, Lebanon and Azerbaijan. The same goes for Turkish President Recep Tayyip Erdogan. The president’s brilliance as a fierce defender of …

Read More »

What is behind Saudi Arabia’s pivot to natural gas?

Saudi Aramco’s request for bids from local and international companies for the construction of a water desalination plant project in the Jafurah shale gas field highlights the Kingdom’s claims to be at the forefront of the global energy transition to cleaner energy through reduced carbon emissions. As with many of …

Read More »

Why isn’t SpaceX planning to use renewable electricity on the Starbase?

Right now, the FAA is gathering public comment on SpaceX’s environmental review of the upcoming Starship Orbital launch. While I generally support space exploration and hope SpaceX is successful, it is important to consider the environmental impacts of space activities and find ways to reasonably minimize the environmental impacts. Your …

Read More »

Bolivian FM says lithium deal has not been discussed with Russian Gazprom – MercoPress

Bolivian FM says lithium deal has not been discussed with Russian Gazprom Monday, October 25, 2021 – 09:32 UTC Russian company Gazprom has no lithium case, Mayta said Bolivian Foreign Minister Rogelio Mayta on Sunday denied press reports that he had reached an agreement with the Russian government to mine …

Read More »

Oil Prices Extend Gains to Multi-Year Highs Due to Tight Supply

Crude oil storage tanks are seen from above at the Cushing Oil Hub in Cushing, Oklahoma, USA, March 24, 2016. REUTERS / Nick Oxford WTI reaches its highest level since October 2014, Brent reaches its highest level in 3 years Speculators increase their net long positions in US crude -CFTC …

Read More »

Saudi Arabia plans to build theme park on oil rig

Located in the Persian Gulf, “THE RIG” will be the first tourist destination in the world inspired by offshore oil platforms. (Saudi Arabia Public Investment Fund) Oil-dependent Saudi Arabia takes the concept of economic diversification at face value. The kingdom has announced plans to convert an oil rig in the …

Read More »

The gas transmission network is strengthened with 18,731 km of additional pipelines

ISLAMABAD, (UrduPoint / Pakistan Point News – October 24, 2021): The two state-owned companies, Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) would lay approximately 18,731 kilometers (km) of pipelines in their areas respective companies to strengthen their transport and distribution networks during the current financial …

Read More »

Peak oil demand forecasts turn sour as demand continues to grow

In the minds of many news consumers, oil is disappearing. Coal too. Gas too, although this can stay on for a bit longer. After all, we are entering a new era of clean energy, and while it will take some time to get there, it is our only option for …

Read More »