ILLUSTRATION FOR CORPORATE INCOME TAX

CCI Limited is a 100% foreign-owned company incorporated in 2006 whose main principal activity is manufacture and sales of consumer products. The profit and loss account of CCI for the year ended 31.12.2011 is given below: Note Sales revenue Sale returns Net sales Cost of goods sold Gross profit Financial income In which: Gain on foreign exchange difference Financial expenses In which: Loss on foreign exchange difference Interest expense Selling expenses General and administration expenses Other income Other expenses Profit before tax Corporate income tax (25%) Profit after tax 3 4 5 6 7 8 (5,000) (6,000) (60,000) (13,000) 16,000 (8,000) 41,000 (10,250) 30,750 2 6,000 (11,000) 1 VND million VND million 210,000 (20,000) 190,000 (80,000) 110,000 7,000

Note 1: Sale returns during the year were due to goods delivered to customers that are faulty during transportation. The company has retained valid invoices issued by the corporate customers for goods returned amounting to VND15,000 million. For individual customers who do not have invoices, the CCI and the individuals have signed minutes indicating details of the goods returned, amounting to VND3,000 million. The remaining goods returned do not have supporting documents from customers. The total cost of goods sold which is related to the sales returns above were VND6,000 million, VND1,300 million and VND850 million, respectively.

Note 2: Details of gain on foreign exchange difference: Realised gain: VND2,000 million Unrealised gain from revaluation of receivables: VND1,500 million Unrealised gain from revaluation of cash at bank: VND300 million Unrealised gain from revaluation of long-term loan: VND2,200 million

Note 3:Details of loss on foreign exchange difference Realised loss: VND2,800 million Unrealised loss on revaluation of short-term payables: VND2,200 million

Note 4:The interest expense related to loan for production purpose. The loan was borrowed from the companys Director, at an interest rate of 20% per annum. The basic interest rate announced by the State Bank of Vietnam as at the date of the loan was 12% per annum.

Note 5: Selling expenses comprise the following: VND million Cost to conduct customers survey Advertisement on Tuoi Tre newspaper Payment discount Cost of participating in a trade fair hold by Vietnamese Trade Association Cost of hold a Year End Party for loyal customers Cost paid for Yanbu Ltd., a market research company, to collecting market information, the VAT invoice with incorrect companys name 14,000 11,000 9,000 4,000 13,000 9,000

60,000 Note 6: General and administration expenses include the following: VND million Expenses without invoices Penalty for late payment of VAT in July Penalty for breach of economic contract signed with supplier Staff parties for Year End Party and Christmas Uniform allowance paid in cash for 120 staff Depreciation of office equipment (the equipment has all been fully depreciated for tax purposes in 2010) 1,400 300 400 2,000 420 2,500

Note 7: Other income includes dividend amounting to VND5,000.

Note 8:Other expenses include the following: VND million Scholarship given to students of the International University (supported by minutes signed between the company and the university) Golf membership Bonus to employees in 2011 (the bonus is paid to employees based on the performance of the company throughout the year. This is not stated in any documents signed between the company and employees.) 1,200 800 3,000

Additional information: Proper supporting vouchers/invoices are available for all items unless otherwise stated. All amounts not described in notes 1 to 8 are taxable/deductible in accordance with the current tax regulations. CCI pays corporate income tax at the standard rate of 25%.

Required: 1. Compute CCI Limiteds total income tax liabilities for the year ended 31.12.2011. You should start your computation with the profit before tax figure of VND41,000 million and refer to all of the items included in notes 1 to 8, indicating by the use of 0 any item for which no adjustment is required. You should make all calculations to the nearest VND million. 2. The company is recruiting HIV infected. By the end of 2010, number of HIV inspected staff is 230 over total of 500. The company plans to recruit extra 200 staff by the end of August. Assume that there is no other movement in employee in the year of 2011. Consult the company about special tax treatment relating to HIV inspected staff so that they could enjoy the tax incentive for the year 2011