On October 19, 2002, the Government issued Decree 126/2020 / ND-CP guiding the Law on Tax Administration including many new regulations, such as significant changes in temporary payment of corporate income tax.

Previously, in Clause 6, Article 4 of Decree No. 91/2014 / ND-CP and Article 17 of Circular 151/2014 / TT-BTC, the provisional payment is provided that, in the case the total of four provisional payments is lower than 20% or more of the payable corporate income tax according to the settlement, the enterprise must pay the interest on late payment for the difference of 20% or more between the temporarily paid amount and the settlement amount, calculated from the day after the last day of the deadline for fourth quarter tax payment, to the date of actual payment of the insufficient tax amount compared with the settlement amount.

However, from December 5, 2020, Decree 126/2020 / ND-CP on guiding the Law on Tax Administration officially took effect, so the regulations on temporary payment of corporate income tax have also changed significantly.

Specifically, Point b, Clause 6, Article 8 of Decree 126/2020 / ND-CP stipulates:

“… The total amount of corporate income tax temporarily paid for the first three quarters of the tax year must not be lower than 75% of the payable corporate income tax amount according to the annual settlement. If the taxpayer underpaid the temporarily payable tax for the first 3 quarters of the year, the late payment interest shall be calculated based on the underpaid tax amount from the day following the last day of the deadline for temporary payment of corporate income tax in the third quarter of the year, to the date of paying the outstanding tax to the State budget.”

Regarding the starting time of application of Decree 126/2020 / ND-CP; Article 5.4, Official Letter 5198 introducing the new contents of Decree 126 prescribes that the temporary payment of corporate income tax under Decree 126 / 2020 / ND-CP will start from the tax period of 2021.

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