When is the time to determine revenue to calculate income subject to corporate income tax for air transport activities?

The time to determine revenue to calculate income subject to corporate income tax for air transport activities is regulated. in Clause 2, Article 5 Circular 78/2014/TT-BTC (amended by Article 3 Circular 96/2015/TT-BTC) as follows:

Revenue

…

2. The time to determine revenue to calculate taxable income is determined as follows:

a) For goods sale activities, it is the time of transfer of ownership and use rights of goods to the buyer.

b) For service provision activities, it is the time of completion of service provision or partial completion of service provision to the buyer, except for the case stated in Clause 3, Article 5 of Circular No. 78/2014/TT-BTC, Clause 1, Article 6, Circular No. 119/2014/TT-BTC.

c) For air transportation activities, it is the time of completion of providing transportation services to the buyer.

d) Other cases according to the provisions of law.

3. Revenue to calculate taxable income in some cases is determined as follows:

a) For goods and services sold by installment or deferred payment method, it is the proceeds from the sale of goods and services paid in one lump sum, excluding installment interest or deferred payment interest.

…

Thus, according to regulations, the time to determine revenue to calculate corporate income taxable income for air transport activities is the time of completion of providing transportation services to the buyer.

How is revenue to calculate corporate income taxable income for air transport activities determined?

Revenue for calculating income subject to corporate income tax is specified in Clause 3, Article 5 of Circular 78/2014/TT-BTC (amended by Clause 1, Article 6 of Circular 119/2014/TT-BTC) as follows:

Revenue

…

3. Revenue to calculate taxable income in some cases is determined as follows:

…

– For the form of selling tickets and prepaid membership cards for many years, the revenue used as a basis for determining income for calculating corporate income tax of each year is the amount of card sales and other revenues actually collected divided by the number of years of card use or determined by one-time payment revenue.

h) For credit activities of credit institutions and foreign bank branches, it is income from interest. Deposits, loan interest income, and financial leasing revenue receivable arising in the tax period are accounted for in revenue according to current regulations on financial mechanisms of credit institutions and foreign bank branches.

i) For transportation activities, it is all revenue from transporting passengers, goods, and luggage arising in the tax period.

k) For electricity supply activities, Clean water is the amount of electricity and clean water supply recorded on the value-added invoice. The time to determine revenue to calculate taxable income is the date of confirmation of the electricity meter readings and recorded on the electricity bill and clean water bill.

Example 6: The electricity bill records the meter readings from December 5 to January 5. The revenue of this invoice is calculated in January.

…

Thus, according to regulations, the revenue to calculate income subject to corporate income tax for air transport activities is the entire revenue from transporting passengers, goods, and luggage arising in the tax period.

Is corporate income tax for foreign airlines declared monthly or quarterly?

Corporate income tax for foreign airlines is prescribed in Clause 2, Article 8 of Decree 126/2020/ND-CP as follows:

Tax types declared monthly, quarterly, annually, each time a tax liability arises and tax finalization declaration

…

2. Other taxes and revenues belonging to the state budget declared quarterly include:

a) Corporate income tax for foreign airlines, foreign reinsurance.

b) Value added tax, corporate income tax, personal income tax for credit institutions or third parties authorized by the credit institution to exploit security assets while waiting for the declaration to be processed on behalf of the payer tax with secured assets.

c) Personal income tax for organizations and individuals paying income subject to tax deduction according to the provisions of the law on personal income tax, but the organization or individual paying that income is subject to quarterly value-added tax declaration and chooses to declare personal income tax quarterly; Individuals with income from salaries or wages directly declare tax to the tax authority and choose to declare personal income tax quarterly.

…

Thus, according to regulations, corporate income tax for foreign airlines is a revenue belonging to the state budget and is declared quarterly.