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Tax Policies Supporting Enterprises Affected By Covid-19

Currently, to support enterprises in dealing with the difficulties and obstacles caused by the impact of the COVID-19 epidemic and gradually stabilize production and business, state agencies have relaxed tax rules.  This article shall summarize few tax legislations issued to support enterprises affected by the Covid-19 epidemic and to implement the policies on social distancing.

  1. Resolution No. 105/NQ-CP of the Government issued on 09 September 2021.

This Resolution promulgates general policies on the reduction of taxes, fees, charges, and land rent for the Ministry of Finance to consider, promulgate and implement after competent authorities issue corresponding regulations. It also implements preferential tax policies on imported goods to aid COVID-19 prevention and control. Concurrently, this resolution also stipulates the consideration of research proposed to the Government and the Prime Minister to further extend the time limit for payment of special consumption tax for cars produced and assembled domestically until the end of 2021. Research and evaluation of impact suggests to consider the reduction in registration fees for cars produced and assembled domestically during the COVID-19 situation.

  1. Decree No. 52/2021/ND-CP issued on 19 April 2021 by the Government

According to the guidelines issued in this Decree, the time limit for payment of value-added tax, corporate income tax, personal income tax and land rent in 2021 is renewed as follows:

  • Value added tax

Regulations on extending the time limit for payment of payable value-added tax for the taxable assessment period  from March to August 2021 (in case of monthly declaration of value-added tax) and tax assessment period in the first quarter and second quarter of 2021 (in case of quarterly declaration of value-added tax) of enterprises and organizations are laid down as follows:

    • The renewed period is five (05) months for value-added tax in the tax assessment period from March to June 2021 and the 1st Quarter and 2ndQuarter of 2021.
    • The renewed period is four (04) months for the value-added tax in the tax assessment period in July 2021.
    • The renewed period is three (03) months for the value-added tax in the tax assessment period in August 2021.

The above extended period is calculated from the last date for payment of value-added tax in accordance with the law on tax administration. In addition, when enterprises and organizations are subject to review of monthly and quarterly declarations and submission of value-added tax declarations but have not yet paid the amount of value-added tax incurred during the declared value-added tax declaration form, the time limit for monthly or quarterly payment of value-added tax is extended as follows:

    • The deadline for payment of value-added tax in the tax assessment period of March 2021 is no later than September 20, 2021.
    • The deadline for payment of value-added tax in the tax assessment period of April 2021 is no later than October 20, 2021.
    • The deadline for payment of value-added tax in the tax assessment period of the May 2021 is no later than November 20, 2021.
    • The deadline for payment of value-added tax in the tax assessment period of the June 2021 is no later than December 20, 2021.
    • The deadline for payment of value-added tax in the tax assessment period of the July 2021 is no later than December 20, 2021.
    • The deadline for payment of value-added tax in the tax assessment period of the August 2021 is no later than December 20, 2021.
    • The deadline for payment of value-added tax in the tax assessment period of the 01st Quarter 2021 is no later than September 30, 2021.
    • The deadline for payment of value-added tax in the tax assessment period of the 2nd Quarter 2021 is no later than December 31, 2021.
  • Corporate income tax

Extension by three months from the last date for corporate income tax payment. This applies to corporate income tax temporarily paid in tax assessment period in the 1st Quarter and the 2nd Quarter of 2021.

  • Land rent

Extension of six (06) months from May 31, 2021 applies to land rent payable by enterprises, organizations, business households and individuals subject to regulations on directly leased land issued by the State under decisions or contracts of State agencies in the form of annual land rent payment for the first period of 2021.

  1. Decree No. 44/2021/ND-CP issued on March 31, 2021, by the Government.

This Decree lays down the guidelines for deductible corporate expenses for enterprises determining taxable income for paying corporate income tax on expenditures of enterprises and organizations in preventing and controlling Covid-19 epidemic. Accordingly, enterprises are included in deductible expenses when determining taxable income for paying corporate income tax on expenditures incurred in cash and in kind for funding competent authorities mentioned in this decree for Covid-19 epidemic prevention and control activities in Vietnam.

In addition, enterprises also need to prepare the following documents for submission to tax authorities to consider the above-mentioned expenses as deductible expenses:

  • Minutes confirming enterprises’ support and funding in accordance with the regulatory forms (or)
  • Other documents (paper or electronic) confirming the expenditure of support and sponsorship signed and stamped by the representative of the enterprise and the representative of the competent authority receiving such support and funding.
  • Legal invoices and vouchers as prescribed by law.

  1. The official Dispatch No. 6770/CTTPHCM-KK issued on July 19, 2021, by Ho Chi Minh Tax Department:

In some local provinces affected by the Covid-19 epidemic like in Ho Chi Minh city   an Official Letter (No. 6770/CTTPHCM-KK) issued by the Ho Chi Minh city of Tax Department has also directed not to impose administrative sanctions on enterprises located in permanent or temporary addresses in quarantine areas, as a result of which are unable to submit tax declaration dossiers in accordance with law leading to the late submission of tax declaration dossiers.

Thus, state agencies have been taking steps to relax tax rules to support enterprises in restoring and developing production and business activities by ensuring Covid-19 prevention and control. Therefore, enterprises should promptly monitor and update themselves with the new policies and regulations to deal with the difficulties caused by the epidemic and for recovery of production activity.

Writing time: 30/09/2021

The article is based on applicable law at the time noted above and may no longer be relevant at the time the reader approaches this article due to the change in applicable law and the specific case in which the reader wishes to apply. Therefore, the article has only reference values.

Source: plf.vn