REGULATIONS ON TAX AND LAND RENT DEFERRAL FOR ENTERPRISES AND BUSINESS HOUSEHOLDS DUE TO THE INFLUEN

FDVN’s opinions:

Thank you for concerning FDVN’s legal services. Regarding your consulting requests, after studying the relevant legal documents, FDVN Law Firm would like to give you the following advice:

 [1] entities ARE ENTITLED TO INCENTIVES POLICY According to Article 2, Decree No. 41/2020/ND-CP

1. Enterprises, organizations, households and individuals (hereinafter referred to as “taxpayers”) that are manufacturers in the following business lines:

a) Agriculture, forestry, aquaculture;

b) Production and processing of food; textiles; garments; manufacture of leather and leather products; wood treatment and manufacture of products from wood, bamboo, rattan (except furniture); manufacture of products from straw and plaiting materials; manufacture of paper products; manufacture of rubber and plastic products; manufacture of products from other non-metallic minerals; metal production; mechanical working; metal treating and coating; manufacture of electronics, computers and optical products; manufacture of automobiles and other motor vehicles; furniture production;

c) Construction.

2. Taxpayers that operate in the following business lines:

a) Transport and warehousing; accommodation, food and drink; education and training; healthcare and social assistance; real estate trading;

b) Employment services; travel agencies, tourism services and auxiliary tourism services;

c) Composing, art and entertainment; library, archive, museum operation and other artistic activities; sports and entertainment; cinemas.

3. Taxpayers that are manufacturers of prioritized ancillary industry products or key mechanical products.

4. Small enterprises and microenterprises

5. Credit institutions and foreign bank branches (FBB) shall provide assistance for enterprises, organizations and individuals affected by Covid-19 as prescribed by the State bank of Vietnam (SBV).

The business lines of taxpayers mentioned in Clause 1, Clause 2 and Clause 3 of this Article are those the taxpayers operate in and earn revenue from in 2019 or 2020.

[2] TYPES OF TAXES AND LAND RENT deferral (According to Article 3, Decree No. 41/2020/ND-CP)

1. VAT (except VAT paid upon importation of goods)

* Deferred deadlines: 05 months from the deadlines for VAT payment in accordance with the law on tax administration, for:

- VAT incurred by the enterprises and organizations mentioned in Article 2 of this Decree during March, April, May, June of 2020 (for taxpayers declaring tax monthly)

- First and second quarter of 2020 (for taxpayers declaring tax quarterly)

* Deferred deadlines for payment of VAT of the month or quarter is specified as follows:

- Deadline for payment of VAT incurred in March 2020 is deferred to September 20, 2020.

- Deadline for payment of VAT incurred in April 2020 is deferred to October 20, 2020.

- Deadline for payment of VAT incurred in May 2020 is deferred to November 20, 2020.

- Deadline for payment of VAT incurred in June 2020 is deferred to December 20, 2020.

- Deadline for payment of VAT incurred in the first quarter of 2020 is deferred to September 30, 2020.

- Deadline for payment of VAT incurred in the second quarter of 2020 is deferred to December 30, 2020.

* In case an enterprise or organization mentioned has a branch or affiliated unit that declares VAT separately to its supervisory tax authority, the branch or unit is also eligible for VAT deferral.

2. Corporate income tax

* Deferred deadlines: 05 months from the deadline for CIT payment for CIT declared in the 2019’s annual statement and CIT declared in the first and second quarters of 2020.

In case an enterprise or organization has already paid the CIT declared in the 2019's annual statement, it may offset the paid CIT against other unpaid taxes.

In case an enterprise or organization has a branch or affiliated unit that declares CIT separately to its supervisory tax authority, the branch or unit is also eligible for CIT deferral.

3. VAT and personal income tax (PIT) of household and individual businesses

The deadline for paying VAT and CIT incurred in 2020 of household and individual businesses in the business lines is deferred to December 31, 2020.

4. Land rents

- Deadline for annual payment of rents that are due in the beginning of 2020 for direct lease of land by the State to the taxpayers under decisions or contracts of competent authorities will be deferred for 05 months to May 31, 2020 at the earliest.

- This also applies in case a taxpayer is leasing land from the State under more than one decision or contract and operates multiple business lines.

 [3] DEFERRAL PROCEDURES (According to Article 4, Decree No. 41/2020/ND-CP)

1. A taxpayer eligible for tax deferral shall submit an application for tax and land rent deferral (electronically or another method) using the form enclosed in Decree 41/2020 / ND-CP with the supervisory tax authority. The application shall include all payments of tax and land rent deferred and be submitted together with the monthly or quarterly tax declaration. In case the application for tax and land rent deferral is not submitted together with the monthly or quarterly tax declaration, it shall be submitted by July 30, 2020. The tax authority still defers tax and land rent incurred before the application is submitted if eligible.

2. The tax authority is not required to inform the taxpayer whether the application is granted or rejected. In case the tax authority discovers that the taxpayer is not eligible for deferral after the application is granted, the tax authority shall send a written notice of ineligibility for deferral to the taxpayer and the taxpayer shall fully pay the tax and/or land rent plus late payment interest that accrues over the period from the deadline to the payment date. In case the tax authority discovers that the taxpayer is not eligible for deferral after the end of the deferral period, the taxpayer shall fully pay the outstanding tax, fine and late payment interest determined by the tax authority.

3. Over the deferral period, the tax authority shall not charge interest on the deferred tax and land rent (even if the application for deferral is submitted after submission of the monthly or quarterly tax declaration but not later than July 30, 2020).

Above is FDVN Law Firm's opinion for your consulting requests based on studying the relevant legal provisions. Hopefully, FDVN's advice would be helpful to you.

Hoang Tran Ngoc Anh - FDVN Law Firm

CONTACT US:

Lawyers in Da Nang:

99 Nguyen Huu Tho, Quan Hai Chau, Da Nang city

Lawyers in Hue:

56A Dien Bien Phu, Hue City, Thua Thien Hue

336 Phan Chu Trinh, Hue City, Thua Thien Hue

Lawyers in Phu Quoc:

65 Hung Vuong, Duong Dong town, Phu Quoc island district

Lawyers in Quang Ngai:

359 Nguyen Du, Quang Ngai City, Quang Ngai Province.

Lawyers in Ha Noi

Room 501, 5th Floor, No. 11, Lane No. 183, Dang Tien Dong Street, Dong Da District, Ha Noi

Lawyers in Nghe An

 No. 19 V.I Lenin street, Vinh City, Nghe An Province

Website: www.fdvn.vn    www.fdvnlawfirm.vn  www.diendanngheluat.vn  www.tuvanphapluatdanang.com

Email: fdvnlawfirm@gmail.com    luatsulecao@gmail.com

Phone: 0935 643 666    –  0906 499 446

Fanpage LUẬT SƯ FDVN: https://www.facebook.com/fdvnlawfirm/

Legal Service For Expat:  https://www.facebook.com/fdvnlawfirmvietnam/

TỦ SÁCH NGHỀ LUẬT: https://www.facebook.com/SayMeNgheLuat/

DIỄN ĐÀN NGHỀ LUẬT: https://www.facebook.com/groups/saymengheluat/