Currently, when participating in business, besides important procedures for business establishment, labor contracts, or business licenses. Businesses also need to pay attention to tax declarations. Through today’s article, Pham Consult will help you clarify how businesses change the accounting period to make tax declarations. Stay tuned for this post!
Pursuant to Article 103 of Circular 200/2014/TT-BTC stipulating that when changing an accounting period, enterprises must close accounting books and prepare financial statements according to the following principles:
– The change of the accounting period must comply with the provisions of the Law on Accounting. When changing the annual accounting period, the accountant must prepare separate financial statements for the period between the two accounting periods of the old fiscal year and the new fiscal year.
– For the Balance Sheet: The entire balance of inherited assets, liabilities and owner’s equity of the accounting period before the conversion is recorded as the opening balance of the new accounting period and presented. Shown in the column “First number of the year.”
– For the income statement and cash flow statement: The data from the time of change of the accounting period to the end of the first reporting period is presented in the column “This period.” The column “previous period” presents the figures for the previous 12 months equivalent to the current accounting period.
Pursuant to Clause 1, Article 12 of the Law on Accounting 2015 provides as follows:
- An accounting period includes an annual accounting period, a quarterly accounting period, and a monthly accounting period and is specified as follows
- a) The annual accounting period is 12 months, counting from the beginning of January 1 to the end of December 31 of the calendar year. An accounting unit with specific organizational and operational characteristics may choose an annual accounting period of 12 full months according to the calendar year, starting from the beginning of the first day of the first month of this quarter to the end of the last day of the last month of the previous quarter of the previous year. And must notify the financial authority, tax authorities.
Pursuant to Point A, Clause 2, Article 44 of the 2019 Law on Tax Administration:
Tax return filing deadline
- The time limit for submitting tax declaration dossiers for taxes with a tax period according to the year is prescribed as follows:
- a) No later than the last day of the 3rd month from the end of the calendar year or fiscal year, for the annual tax finalization dossier; no later than the last day of the first month of the calendar year or fiscal year for the annual tax return;
- b) No later than the last day of the 4th month from the end of the calendar year, for personal income tax finalization records of individuals who directly finalize tax;
- c) No later than December 15 of the preceding year, for flat tax declaration dossiers of business households and individuals paying tax by the presumptive method; in case the business household or individual is new to the business, the time limit for submitting a flat tax return is 10 days from the date of starting the business.
Pursuant to Clause 4, Article 3 of Circular 78/2014/TT-BTC stipulates as follows:
Tax calculation method
- In case the enterprise converts the corporate income tax period (including the conversion of the tax period from the calendar year to the fiscal year or vice versa), the corporate income tax period of the year of conversion doesn’t exceed 12 months.
Example 1: Enterprise A (DN A) for the 2013 corporate income tax period applied according to the calendar year, at the beginning of 2014 chooses to convert to the fiscal year from April 1 of this year to March 31. Next year, the corporate income tax period of the year of conversion (the conversion year 2014) is calculated from January 1, 2014, to the end of March 31, 2014 (3 months), the corporate income tax period of the year (the fiscal year 2014) is calculated from April 1, 2014, to the end of March 31, 2015.
Next year, the corporate income tax period of the year of conversion (the conversion year 2014) is calculated from January 1, 2014, to the end of March 31, 2014 (3 months), the corporate income tax period of the year (the fiscal year 2014) is calculated from April 1, 2014, to the end of March 31, 2015. In addition, if you are interested in this issue and need specific advice, please contact Pham Consult!
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