Transfer funds to the bank account of the owner of the private business obtained corporate income tax deduction?

Is a transfer to the bank account of a private business owner deductible from corporate income tax?

1. Corporate income tax period

Pursuant to Article 5 of the Law on Corporate Income Tax 2008, the tax period is as follows:

– Corporate income tax period is determined according to the calendar year or fiscal year, except for the case specified in Clause 2 of this Article.

– Corporate income tax period is determined by each time. income generation applicable to foreign enterprises is specified in Points c and d, Clause 2, Article 2 of this Law.

2. What is the basis for calculating corporate income tax?

Pursuant to Article 5 of Decree 218/2013/ND-CP stipulating the tax base as follows:

The tax base is the taxable income in the period and the tax rate.

The tax period is implemented according to the provisions of Article 5 of the Law on Corporate Income Tax and regulations of tax administration law.

Enterprises can choose the tax period according to the calendar year or fiscal year but must notify the tax authority before doing so.

3. Is a transfer to the personal account of a private business owner deductible from corporate income tax?

Pursuant to Article 4 of Circular 96/2015/TT-BTC as follows:

– Except for non-deductible expenses mentioned in Clause 2 of this Article, businesses can deduct all expenses if they meet the following conditions:

+ Actual expenses incurred related to production and business activities of the enterprise.

+ Expenditures with sufficient legal invoices and documents according to the provisions of law.

+ Expenses if there are invoices for each purchase of goods and services valued at 20 million VND or more (price includes VAT) when making payment must have non-cash payment documents.

Non-cash payment documents comply with the provisions of legal documents on value-added tax.

In case of one-time purchase of goods or services with a value of twenty million VND or more recorded on the invoice but at the time of recording expenses, the enterprise has not yet paid, the enterprise will be included in the expenses. deductible when determining taxable income. In case the enterprise does not have non-cash payment documents, the enterprise must declare and adjust to reduce costs for the value of goods and services without non-cash payment documents in the tax period in which the cash payment arises (including in cases where tax authorities and functional agencies have decided to inspect and examine the tax period in which this expense arises).

For invoices for purchasing goods, Services paid in cash that arose before Circular No. 78/2014/TT-BTC took effect do not have to be re-adjusted according to the provisions of this Point.

Example 7: In August 2014, enterprise A purchased goods that had invoices and the value recorded on the invoice was 30 million VND but had not yet been paid. In the 2014 tax period, company A included deductible expenses when determining taxable income for the purchase value of these goods. In 2015, company A paid for the purchase of these goods in cash, so company A had to declare and adjust costs for the value of goods and services in the tax period in which the cash payment occurred (tax period 2015).

In case an enterprise purchases goods and services related to its production and business activities and has invoices printed directly from the cash register in accordance with the law on invoices; If this invoice has a value of 20 million VND or more, the enterprise will base on this invoice and the enterprise’s non-cash payment documents to calculate deductible expenses when determining taxable income.

In case the enterprise purchases goods and services related to its production and business activities and has an invoice printed directly from the cash register in accordance with the law on invoices; If this invoice is worth less than 20 million VND and is paid in cash, the enterprise will base on this invoice and the enterprise’s cash payment documents to calculate deductible expenses when determining taxable income.

On the other hand, Article 1 of Circular 173/2016/TT-BTC defines non-cash payment, specifically as follows:

“Article 1

Amending and supplementing the first paragraph, Clause 3, Article 15 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the Law on Value Added Tax and Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government The Government details and guides the implementation of a number of articles of the Law on Value Added Tax (amended and supplemented according to Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014, Circular No. 26/2015/TT-BTC dated February 27, 2015 of the Ministry Finance) as follows:

3. Bank payment documents are understood as documents proving the transfer of money from the buyer’s account to the seller’s account opened at payment service providers according to payment methods in accordance with current law regulations such as checks, payment orders or payment orders, collection orders, collection orders, bank cards, credit cards, phone sim cards (e-wallets) and other payment methods according to the law. regulations (including the case where the buyer pays from the buyer’s account to the seller’s account named after the owner of a private enterprise, or the buyer pays from the buyer’s account named after the owner of a private enterprise to the seller’s account).”

Thus, transferring money from the company account to the personal account of the owner of a private enterprise for payment is legal. VND will be determined as a deductible expense when calculating corporate income tax.