UPDATE ON TAX POLICIES
Value Added Tax (“VAT”) refund for new investment projects
On April 1, 2021, General Department of Taxation issued Official Letter No. 944/TCT-CS on VAT refund for new investment projects (“Letter 944”).
Accordingly, the guidance is that the Enterprises have registered to pay VAT by the credit method and have new investment projects in the investment stage with the VAT amount of goods and services purchased and used for investment that has yet been deducted from 300 million VND or more will be refunded for the input VAT of the investment period (except for cases that are not eligible for tax refund as prescribed). At the end of the investment period to switch to the production and business stage, if the enterprise still has the input VAT incurred in the investment period that has not been deducted from 300 million VND or more, the enterprise must declare in the item “The remaining input VAT of the investment project to be refunded” on the VAT declaration for the investment project (form 02/GTGT) at the tax period ending the investment period. If the enterprise has not yet made this declaration, it shall make additional declarations as prescribed.
Guidance on deductible expenses for support and funding for Covid-19 epidemic prevention and control activities
The Government has issued Decree No. 44/2021/ND-CP dated March 31, 2021 (“ND 44”) guiding on the expenses for support and funding for Covid-19 epidemic prevention and control activities considered a deductible expense when calculating corporate income tax (“CIT”). MACTVN summarizes some important contents of Decree 44 as follows:
- Enterprises are included in deductible expenses when determining CIT taxable income for donations and sponsorships in cash and in kind for Covid-19 epidemic prevention and control activities in Vietnam through applications. recipients of support and sponsorship according to regulations;
- Enterprises receiving support and funding include: Vietnam Fatherland Front Committees at all levels; health facilities; armed forces units; Ministries, ministerial-level agencies, agencies attached to the Government; Party organizations, youth unions and trade unions at central and local levels; local government agencies and units at all levels have the function of mobilizing funding; Fund for Covid-19 prevention and control at all levels; and other organizations…;
- Documents to determine support and sponsorship expenses to be considered deductible expenses including: Confirmation Minutes of support or sponsorship or documents (in paper or electronic form) certifying expenses. support, sponsorship, signed and stamped by the representative of the enterprise that is the sponsor and representative of the enterprise receiving the support, sponsorship, and legal invoices and documents.
Decree 44 takes effect from the date of signing and applies to the 2020 and 2021 CIT periods.
Extension of VAT, CIT, PIT and land lease payment in 2021
On April 19, 2021, the Government issued Decree No. 52/2021/ND-CP (“ND 52”) on the extension of payment of VAT, CIT, PIT and land lease in 2021. Decree 52 effective from 19/04/2021. The main contents of Decree 52 are summarized as follows:
- Subjects eligible for tax payment extension:
- Economic sectors benifiting tax payment extension: Agriculture, forestry, fisheries, manufacturing (food, clothing, leather, wood, bamboo, paper and paper products, rubber and plastics, needles) types…), construction, publishing, cinema, television, music, crude oil and natural gas extraction, drainage and wastewater treatment, transportation and storage, accommodation, catering…; and
- Enterprises, organizations, business households and individuals doing business in the following fields or satisfying the following conditions are entitled to an extension of tax payment time: Producing development-priority supporting industrial products, mechanical products key, small and micro enterprises, credit institutions, foreign bank branches to support corporate customers, organizations and individuals affected by the Covid-19 epidemic.
- The tax payment time extensions are entitled to:
- Extension of the deadline for VAT payment (including the tax amount allocated to other provinces where the taxpayer is headquartered, the tax amount paid each time it is incurred) of the tax period from March to May August 2021 and the tax period of the first quarter and the second quarter of 2021. The extended period is 05 months for the value-added tax amount from March to June 2021 and the first quarter, the second quarter of 2021, 04 months for the value-added tax amount of July 2021, 03 months for the value-added tax amount of August 2021.
The extended tax amount includes the additional tax payable due to the additional declaration.
Branches and affiliated companies (i) make separate VAT declarations with the tax authorities directly managing branches and affiliated companies and (ii) have production and business activities in the same line of business. If the extension is extended according to regulations, these branches and affiliated companies are also eligible for the extension to pay value added tax;
- Extending the deadline for paying CIT for 3 months for the temporarily paid CIT of the 1st and 2nd quarters of the tax period 2021.
Branches and affiliated companies (i) make separate CIT declaration with the tax authority directly managing the branch or affiliated companies and (ii) have production and business activities in the economic sector. If the area is extended according to regulations, these branches and affiliated units are also eligible for the extension of CIT payment;
- Extension of time limit for payment of VAT and personal income tax of business households and individuals no later than December 31, 2021 for economic sectors and fields that are extended according to regulations;
- Extension of the land lease for 6 months for those subject to the extension from May 31, 2021;
- Enterprises, organizations in many different economic sectors, including economic sectors and fields eligible for extension, may have their entire payable VAT and CIT payable extended tax amounts extended. according to the law;
- The last day of the extended tax payment deadline coincides with a holiday, the last day of the time limit is counted as the next working day of that holiday.
- Order and procedures for renewal:
- Enterprises send an Application for extension of tax and land lease payment for the first time or for replacement when there is an error (email, paper copy) according to the prescribed form. Submission of this Application Form only needs to be done once for all tax periods and the land lease are The submission time is the same as the time of monthly or quarterly tax declaration or at the latest is July 30, 2021. Tax administration agencies still extend tax and land lease for the extended periods before the time of submitting the application;
- Enterprises with extended amounts belonging to different management tax authorities, the managing tax agency directly transmits information and sends a request for extension of tax payment and land lease to the related tax authority.
- No late payment interest will be charged for the extended tax and land lease amount within the extended payment period.
Please contact us for more detail advices: MACT Vietnam Co., Ltd
Pham Quoc Viet, Chairman, Email: Vietpq@mactvn.com, Mobile: 0984.998.265.