Income from fruit trees Are cooperatives subject to corporate income tax?

Who must pay corporate income tax?

According to Article 2 of the Law on Corporate Income Tax 2008 (amended and supplemented by Clause 1, Article 1 of the Law on Corporate Income Tax amended in 2013), regulations on taxpayers are as follows:(1) Corporate income tax payers are organizations that produce and trade goods and services with taxable income according to the provisions of this Law (hereinafter referred to as enterprises), including:

– The enterprise is established according to the provisions of Vietnamese law;

– Enterprises established under foreign laws (hereinafter referred to as foreign enterprises) with or without permanent establishments in Vietnam;

– Organizations established under the Cooperative Law;

– The public service unit is established according to the provisions of Vietnamese law;

– Other organizations with production and business activities that generate income.

(2) Enterprises with taxable income specified in Article 3 of this Law must pay corporate income tax as follows:

– Enterprises established under the provisions of Vietnamese law pay tax on taxable income arising in Vietnam and taxable income arising outside Vietnam;

– Foreign enterprises with permanent establishments in Vietnam pay tax on taxable income arising in Vietnam and taxable income arising outside Vietnam related to the operations of that permanent establishment;

– Foreign enterprises with permanent establishments in Vietnam pay tax on taxable income arising in Vietnam that is not related to the operations of the permanent establishment;

– Foreign enterprises without permanent establishments in Vietnam pay tax on taxable income arising in Vietnam.

(3) A permanent establishment of a foreign enterprise is a production and business establishment through which a foreign enterprise conducts part or all of its production and business activities in Vietnam, including:

– Branches, executive offices, factories, workshops, means of transport, oil fields, gas fields, mines or other natural resource exploitation sites in Vietnam;

– Construction sites, construction, installation and assembly projects;

– Service providers, including consulting services through employees or other organizations or individuals;

– Agent for foreign businesses;

– Representative in Vietnam in the case of a representative with authority to sign contracts in the name of a foreign enterprise or a representative without authority to sign contracts in the name of a foreign enterprise but who regularly delivers goods or provides services in Vietnam.

How is the corporate income tax period determined?

According to Article 5 of the Law on Corporate Income Tax 2008 The tax period is determined as follows:

“1. The 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.

2. The corporate income tax period for each time income is generated applicable to foreign enterprises is specified in Points c and d, Clause 2, Article 2 of the Law this.”

Is income from cooperatives’ fruit trees subject to corporate income tax?

According to Article 4 of the Law on Corporate Income Tax 2008 (amended and supplemented by Clause 3, Article 1 of the Law on Corporate Income Tax, amended in 2013, and Clause 2, Article 1 of Law No. 71/2014/QH13 on Tax, amended in 2014), it is stipulated that tax-exempt income is as follows:

– Income from farming, animal husbandry, farming, processing agricultural and aquatic products, and salt production of cooperatives; income of cooperatives operating in the fields of agriculture, forestry, fishery, and salt production in areas with difficult socio-economic conditions or in areas with particularly difficult socio-economic conditions; Enterprise income from farming, animal husbandry, farming, and processing of agricultural and aquatic products in areas with particularly difficult socio-economic conditions; income from fishing activities.

– Income from performing technical services directly serving agriculture.

– Income from the performance of scientific research and technology development contracts, products in the trial production period, products made from new technology applied for the first time in Vietnam.

– Income from production and sales of goods and services of enterprises with 30% or more of the average number of employees in the year being disabled people, people recovering from drug addiction, people infected with the virus that causes acquired immunodeficiency syndrome in humans (HIV/AIDS) and having an average number of employees in the year of twenty people or more, excluding enterprises operating in the field of finance and real estate business.

– Income from vocational training activities reserved for ethnic minorities, disabled people, children in extremely difficult circumstances, and subjects of social evils.

– Income is divided from capital contribution activities, joint ventures, and associations with domestic enterprises, after paying corporate income tax according to the provisions of this Law.

– The grant received will be used for educational activities, scientific research, culture, art, charity, humanitarian and other social activities in Vietnam.

Thus, the cooperative’s income from fruit trees is exempt from tax, so it is not subject to corporate income tax.