VI Project management boards under the provincial authority are self-governing public service units according to Decree 60/2021/ND-CP, classified as Group 1 units. When a unit has revenue derived from project management costs where it is the investor, is it required to pay corporate income tax? Let’s explore this further with Pham Consult!
Do project management boards with revenue derived from project management costs where it is the investor are required to pay corporate income tax?
Based on the provisions of Clause 5, Article 12 of Decree 320/2025/ND-CP guiding the method of tax calculation, specifically, cooperatives, cooperative unions established under the Law on Cooperatives, public service units and other organizations specified in points c, d and e, Clause 1, Article 2 of this Decree that have production and business activities of goods and services with taxable income subject to corporate income tax (except for tax-exempt income specified in Article 4 of this Decree) and which can account for revenue but cannot determine the costs and income of production and business activities, shall declare and pay corporate income tax calculated as a percentage of revenue from the sale of goods and services, specifically as follows:
– For services (including interest on deposits and loans): 5%. For services in the fields of education, health, and performing arts: 2%;
– For the production and business of goods: 1%;
– For other activities: 2%.
Based on the provisions of Clause 14, Article 4 of Decree 320/2025/ND-CP, the following income is exempt from tax for public non-business units from providing public services:
– Basic and essential public services belonging to the list of public services using state budget;
– Public services that the State must support and ensure operating costs because the service provision costs are not fully included in the service price;
– Public services in areas with particularly difficult socio-economic conditions;
– Public non-business units specified in this clause are organizations established by decision of competent authority;
– Public service activities, basic and essential public service activities, and public service activities that the State must support and ensure funding for due to insufficient cost calculations as stipulated in this clause are determined according to Government Decree No. 60/2021/ND-CP dated June 21, 2021, regulating the financial autonomy mechanism of public service units (amended and supplemented by Government Decree No. 111/2025/ND-CP dated May 22, 2025).
According to the above-cited regulations, in this case, the Project Management Board needs to further verify whether the income is generated from activities in areas with particularly difficult socio-economic conditions. If not, the revenue deducted from project management costs where the unit acts as the investor (project manager) is still subject to corporate income tax.
What does the revenue from public service activities include?
Based on the provisions of Clause 2, Article 11 of Decree 60/2021/ND-CP, which lists and identifies the financial sources of a unit, the revenue from public service activities includes:
– Revenue from public service activities;
– Revenue from production and business activities; joint ventures and partnerships with organizations and individuals in accordance with the law and with projects approved by competent authorities in line with the functions and tasks of the public service unit;
– Revenue from leasing public assets: The unit must fully comply with the law on the management and use of public assets and must have a project for leasing public assets approved by competent authorities.
In addition, there are also revenue from fees retained by the public service unit for expenditure in accordance with the law on fees and charges; borrowed capital; aid and sponsorship capital as prescribed by law; and other revenue sources as prescribed by law (if any).
How should self-financing public service units allocate funds if they make a profit?
Based on the provisions of Clause 1, Article 14 of Decree 60/2021/ND-CP (amended by Clause 9, Article 1 of Decree 111/2025/ND-CP) guiding the distribution of financial results in a specific fiscal year, after fully accounting for self-managed revenue and expenditure, depreciation of fixed assets, tax payments, and other payments to the state budget as prescribed, the difference between revenue and self-managed expenditure (if any) shall be used by the public service unit in the following order:
– Allocation to the Fund for the Development of Public Service Activities: A minimum of 25% shall be allocated;
– Allocation to the Supplementary Income Fund applicable in cases where the unit pays salaries as prescribed in point a, Clause 1, Article 12 of this Decree: Group 1 units may decide on the allocation level (without any limit on the allocation level);
– Allocation to the Reward Fund and Welfare Fund: The total of both funds shall not exceed 3 months’ average salary and additional income earned by the unit during the year.
– Establish other funds as prescribed by specialized laws;
– Any remaining surplus of revenue over expenditure (if any) after establishing the prescribed funds will be added to the Fund for the Development of Public Service Activities.
Thus, when a public service unit makes a profit at the end of the calendar year, or when the surplus of revenue over regular expenses is determined under its autonomy, it will proceed to establish the funds as prescribed above.
