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Tax accounting

WHAT DOES CIT MEAN? WHAT TO KNOW ABOUT CORPORATE INCOME TAX

In today's article, viecoi will bring you a familiar topic, which is Corporate Income Tax, also known as CIT.

As far as we know, paying taxes is the obligation of all businesses, i.t. large or small enterprises, exporters or importers … When you have a solid knowledge of taxation, it will help businesses avoid making mistakes that should not be made. Therefore, within the framework of this article, let's answer what CIT is as well as what to know about this tax!

Simple definition of CIT

CIT is an acronym for Corporate Incomes Tax, known in the main market as corporate income tax and commonly used in the tax payment calculation section, used on a lot in corporate financial statements.

Basically, we can separate CIT = "Tax" + "Income" + "Business" and define each word and then put it together as follows:

– Tax: Known as a source of government revenue to maintain general activities for society and is a compulsory contribution that people must pay to the state

– Income: This is an amount defined on the "income" in "a certain period or in other words, a tax that affects the behavior of the payer. If you use a specialized word, it can be called "tax base" or "taxable object"

– Enterprises: Subjects that need to pay tax – are organizations producing, trading in services and goods

From there, it is possible to re-define CIT again: CIT – Corporate income tax is a contribution that is determined on the basis of the income of the enterprise and is a compulsory amount that businesses need to pay to the state

What to know about CIT – Corporate Income Tax

1. Why businesses need to submit CIT

  • In parallel with the state agencies will also create conditions for businesses to operate well, develop and prevent bad actions that negatively affect the economy. Then the production and business activities of the enterprise will be sponsored and operated by the respective state agencies. Because of that, businesses need to pay income tax so that state agencies can maintain executive activities as well as support through policies and regulations.
  • Determining the business efficiency of the business and the economy will be made easier when businesses close CIT based on the revenue of the enterprise itself.
  • The State will easily control and regulate all incomes of enterprises when operating on an economy that is constantly shifting, CIT tax collection will help the state more.
  • Create a balance between businesses.
  • With this tax source, the state will have the potential to implement policies to attract investment and tax exemption,…. To promote economic development and increase more or less the state budget

2. What are the characteristics of CIT?  

If you know the full story, it is clear that the definition of CIT will help businesses generalize and analyze the characteristics of this tax. Namely the following:

  • Currently, our country enacts a lot of taxes such as personal income tax, value-added tax, consumption tax,… and the income of the enterprise is subject to tax as well as different.
  • CIT is a direct tax that serves as a factor to increase the state budget, while contributing to the management of the economy. Thereby making the problem of social income conditioning easier to implement as well as control. This is also one of the reasons why CIT becomes a tax that always has to go along with the policies of the State.
  • In fact, corporate income tax is a complex and not highly stable tax. This makes it difficult to collect and determine taxes from businesses. To determine the income, the charge is legal,… it is necessary to have a management department to perform this task. From there, the business will only ins bear an appropriate and necessary fee to continue to maintain and develop.
  • The State will also support other deductions but must be reasonable in addition to the incomes of businesses that need to pay fees for the purpose of tax deduction and business support.
  • The State shall adjust tax income relations in legal documents.

With the basic information above, hope you understand what CIT is as well as the characteristics of this tax