Circular No. 83/2012/TT-BTC dated May 23, 2012 of the Ministry of Finance guiding the exemption, reduction and deferment of payment of a number of state budget revenues according to the Government’s Resolution No. 13/NQ-CP of May 10, 2012, on a number of solutions for removing production and business difficulties and supporting the market

THE MINISTRY OF FINANCE

Circular No. 83/2012/TT-BTC of May 23, 2012, guiding the exemption, reduction and deferment of payment of a number of state budget revenues according to the Government’s Resolution No. 13/NQ-CP of May 10, 2012, on a number of solutions for removing production and business difficulties and supporting the market

Pursuant to June 3, 2008 Law No. 13/2008/QH12 on Value-Added Tax;

Pursuant to June 3, 2008 Law No. 14/2008/QH12 on Enterprise Income Tax;

Pursuant to November 29, 2006 Law No. 78/2006/QH11 on Tax Administration;

Pursuant to December 16, 2002 Law No. 01/2002/QH11 on the State Budget;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance.

The Ministry of Finance guides the implementation of the Government’s Resolution No. 13/NQ-CP of May 10, 2012, on a number of solutions for removing production and business difficulties and supporting the market as follows:

Article 1. Deferment of value-added tax payment

1. To defer for 6 months the value-added tax (VAT) payment of April, May and June of 2012 (excluding VAT at the importation stage) for the following enterprises that currently pay VAT by the credit method:

a/ Small- and medium-sized enterprises including cooperatives (below referred to as small- and medium-sized enterprises), excluding those doing business in lottery, securities, finance, banking or insurance, production of commodities or provision of services liable to excise tax and grade-1 or special-grade enterprises of economic groups or corporations;

b/ Labor-intensive enterprises engaged in production and processing of agricultural, forest and aquatic products, textiles and garments, leather and footwear, electronic components or construction of socio-economic infrastructure facilities (below referred to as labor-intensive enterprises).

2. Small- and medium-sized enterprises specified at Point a, Clause 1 of this Article are those satisfying the capital or labor criterion prescribed in Clause 1, Article 3 of the Government’s Decree No. 56/2009/ND-CP of June 30, 2009, on supporting the development of small- and medium-sized enterprises.

a/ The capital amount used as a basis for identifying small- and medium-sized enterprises is the total capital shown in the accounting balance sheet made on December 31, 2011, of the enterprises. For small- and medium-sized enterprises established from January 1, 2012, on, the capital amount used as a basis for identifying small- and medium-sized enterprises is the charter capital written in the first business registration certificate or investment certificate;

b/ The annual average number of laborers used as a basis for identifying small- and medium-sized enterprises (including laborers of branches and affiliated units) is the number of laborers employed regularly by an enterprise in 2011, excluding laborers under contracts of under 3 months.

The annual average number of laborers employed regularly shall be determined under the guidance in Circular No. 40/2009/TT-BLDTBXH of December 3, 2009, of the Ministry of Labor, War Invalids and Social Affairs, guiding the calculation of number of laborers employed regularly under the Government’s Decree No. 108/2006/ND-CP of September 22, 2006, detailing and guiding the implementation of a number of articles of the Law on Investment.

For enterprises established from January 1, 2012, on, the total number of laborers, excluding laborers under contracts of under 3 months, shall be calculated from the date of establishment through April 30, 2012 (if established before May 2012), or through May 31, 2012 (if established before June 2012), or through June 30, 2012 (if established before July 2012);

c/ For enterprises engaged in various business lines, the identification of these enterprises as small- and medium-sized enterprises according to the capital or labor criterion provided in Decree No. 56/2009/ND-CP must be based on their main business lines written in their business registration certificates. If the main business line cannot be identified, any of the following criteria can be used to identify the main business line of an enterprise:

- The most number of laborers working in each business line of the enterprise in 2011;

- The highest turnover from each business line of the enterprise in 2011.

In case the use of the above criteria still does not help identify the main business line of an enterprise for determining whether it is a small- or medium-sized one, the criterion of smallest capital or number of laborers of one of the business lines conducted by the enterprise in 2011 prescribed in Clause 1, Article 3 of Decree No. 56/2009/ND-CP, can be used.

d/ The 6-month deferment of VAT payment is not applicable to the following enterprises:

d.1/ Small- and medium-sized enterprises doing business in lottery, securities, finance, banking or insurance or producing commodities or providing services liable to excise tax.

In case a small- or medium-sized enterprise doing business in lottery, securities, finance, banking, or insurance or producing commodities or providing services liable to excise tax has another business or production activity subject to VAT of which the payment is deferred, besides lottery, securities, finance, banking or insurance or production of commodities or provision of services liable to excise tax, the enterprise is allowed to defer payment of the VAT amount for such business or production activity and shall calculate this VAT amount as follows:

d.2/ Grade-1 enterprises specified in Joint Circular No. 23/2005/TTLT-BLDTBXH-BTC of August 31, 2005, of the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance, guiding the ranking and salaries of full-time members of boards of directors, general directors, directors, deputy general directors, deputy directors and chief accountants of state companies.

d.3/ Special-grade enterprises specified in the Prime Minister’s Decision No. 185/TTg of March 28, 1996, on special-grade state enterprises, and the Prime Minister’s Decision No. 186/TTg of March 28, 1996, on the list of special-grade state enterprises.

d.4/ Economic entities being non-business units.

3. Labor-intensive enterprises (including laborers of branches and affiliated units) doing the business lines eligible for deferred VAT payment mentioned at Point b, Clause 1 of this Article, include:

a/ Enterprises that employed in 2011 more than 300 regular laborers, excluding laborers under contracts of under 3 months, for enterprises established before January 1, 2012.

For enterprises established from January 1, 2012, on, the total number of laborers is over 300 people, excluding laborers under contracts of under 3 months, calculated from the date of establishment through April 30, 2012 (if established before May 2012), or May 31, 2012 (if established before June 2012), or June 30, 2012 (if established before July 2012).

The production and processing of agricultural, forest and aquatic products, textiles and garments, leather and footwear and electronic components mentioned at Point b, Clause 1 of this Article shall be determined based on the provisions on Vietnam’s economic sector system promulgated together with the Prime Minister’s Decision No. 10/2007/QD-TTg of January 23, 2007.

Construction of socio-economic infrastructure facilities mentioned at Point b Clause 1 of this Article includes construction and installation of water plants, power plants, electricity transmission and distribution works, water supply and drainage systems; roads, railroads; airports, seaports, river ports; air terminals, train stations, bus stations; schools, hospitals, cultural houses, cinemas, art performance facilities, sports training and competition facilities; wastewater and solid waste treatment systems; information and communications works, irrigation works serving agriculture, forestry and aquaculture.

b/ For labor-intensive enterprises also conducting production and business activities ineligible for deferred VAT payment, the VAT amount eligible for deferred payment shall be calculated as follows:

4. Branches and affiliated units of small- and medium-sized enterprises and labor-intensive enterprises which are not located in the same province of the head office (excluding units engaged in construction and installation or mobile sale of goods in different provinces and declaring VAT for temporary calculation at the rate of 1% or 2%) and separately make VAT declaration to their managing tax agencies are also eligible for deferred VAT payment.

Branches and affiliated units not engaged in production and business activities eligible for deferred VAT payment are not eligible for deferred VAT payment.

Enterprises shall make lists of branches and affiliated units (specifying the name, address, tax identification number, number of laborers and field of operation of each branch) and inform them to the tax agencies directly managing such branches and affiliated units. They are responsible before law for the accuracy of the lists of branches and affiliated units sent to the tax agencies.

5. Enterprises eligible for deferred VAT payment guided in this Article shall make and send the VAT declarations in April, May and June 2012 according to regulations but do not have to pay immediately the declared VAT amounts.

- The deadline for paying VAT of April 2012 is November 20, 2012.

- The deadline for paying VAT of May 2012 is December 20, 2012.

- The deadline for paying VAT of June 2012 is January 21, 2013.

6. Enterprises shall determine by themselves whether they are eligible for deferred VAT payment, VAT amounts eligible for deferred payment and declare them in Appendix 1 (enclosed with this Circular) and send it together with the VAT declaration of the month eligible for deferred payment.

Enterprises having submitted the VAT declarations of April 2012 but having not made Appendix 1 stated above shall make and sent it to the tax agency. Within the VAT deferment period, enterprises will not be fined for late tax payment.

Article 2. Reduction of land rent

1. To reduce 50% of land rents payable in 2012 for economic entities and enterprises operating in the fields of commerce and service and currently renting land from the State and paying annual land rents at the rate prescribed in the Government’s Decree No. 121/2010/ND-CP of December 3, 2010. The reduction shall be implemented under the Prime Minister’s Decision No. 2093/QD-TTg of November 23, 2011.

2. The conditions, order, procedures and competence to reduce land rents comply with Official Letter No. 17969/BTC-QLCS of December 30, 2011, of the Ministry of Finance, and the Ministry of Finance’s documents guiding the Prime Minister’s Decision No. 2093/QD-TTg of November 23, 2011.

Article 3. Deferment of enterprise income tax payment

1. To defer for 9 months the payment of enterprise income tax amounts payable in 2010 or earlier which until May 10, 2012, the following enterprises have not paid into the state budget:

a/ Small- and medium-sized enterprises (including cooperatives), excluding those doing business in lottery, securities, finance, banking or insurance, or producing commodities or providing services liable to excise tax, and grade-1 and special-grade enterprises of economic groups and corporations;

b/ Labor-intensive enterprises engaged in the production and processing of agricultural, forest and aquatic products, textiles and garments, leather and footwear or electronic components or construction of socio-economic infrastructure facilities;

c/ Enterprises manufacturing mechanical products for use as means of production, enterprises engaged in waterway transportation (including inland waterway and sea transportation), and enterprises manufacturing steel and cement; small- and medium-sized real estate enterprises.

Late payment will not be fined within the period from January 1, 2012, through September 30, 2012, with regard to enterprise income tax amounts having not been paid by the enterprises specified in this Clause. If a tax agency has notified a fine for late payment, it shall notify again the fine.

By October 1, 2012, enterprises shall pay enterprise income tax amounts that have been deferred under this Clause.

Before October 1, 2012, if a competent agency inspects an enterprise and detects that the enterprise income tax amount of the deferment period specified in this Clause is higher than the amount declared by such enterprise or that amount has not yet been declared, the enterprise may defer payment of the detected additional enterprise income tax amount up to the end of September 30, 2012, and will not be fined for late payment within the period from January 1, 2012, through September 30, 2012.

From October 1, 2012, on, if a competent agency inspects an enterprise and detects that the enterprise income tax amount of the deferment period specified in this Clause is higher than the amount declared by the enterprise, or that amount has not yet been declared, the enterprise will not be fined for late payment of the detected additional tax amount within the period from January 1, 2012, through September 30, 2012.

2. To defer for 9 months the payment of enterprise income tax amounts payable in 2011 which enterprises manufacturing mechanical products for use as means of production, enterprises engaged in waterway transportation (including inland waterway and sea transportation), enterprises manufacturing steel and cement (excluding small- and medium-sized enterprises dealing in these goods); and small- and medium-sized real estate enterprises have not yet paid into the state budget.

Late payment will not be fined within the period from April 1, 2012, through December 31, 2012, with regard to enterprise income tax amounts having not been paid by the enterprises specified in this Clause. If a tax agency has notified a fine for delayed payment, it shall notify again the fine.

By January 2, 2013, enterprises shall pay enterprise income tax amounts that have been deferred under this Clause.

Before January 1, 2013, if a competent agency inspects an enterprise and detects that the enterprise income tax amount of the deferment period specified in this Clause is higher than the amount declared by such enterprise or that amount has not yet been declared, the enterprise may defer payment of the detected additional enterprise income tax amount up to the end of December 31, 2012, and will not be fined for late payment within the period from April 1, 2012, through December 31, 2012.

From January 1, 2013, on, if a competent agency inspects an enterprise and detects that the enterprise income tax amount of the deferment period specified in this Clause is higher than the amount declared by the enterprise, or that amount has not yet been declared, the enterprise will not be fined for delayed payment of the detected additional tax amount within the period from April 1, 2012, through December 31, 2012.

3. Small- and medium-sized labor-intensive enterprises (except small- and medium-sized real estate enterprises); enterprises producing and processing agricultural, forest and aquatic products, textiles and garments, leather and footwear or electronic components or constructing socio-economic infrastructure facilities may defer payment of their enterprise income tax amounts payable in 2011 under the Prime Minister’s Decision No. 21/2011/QD-TTg, Decision No. 54/2011/QD-TTg, and Decision No. 04/2012/QD-TTg.

4. If enterprises eligible for deferred payment of enterprise income tax specified in Clause 1 or 2 above receive a tax-related administrative decision due to their enterprise income tax debts, they will be temporarily not subject to coercive tax payment within the period of deferred payment of enterprise income tax.

5. Small- and medium-sized enterprises doing business in lottery, securities, finance, banking or insurance, or producing commodities or providing services liable to excise tax (even together with other business lines); grade-1 and special-grade enterprises of economic groups or corporations; and economic entities being non-business units may not defer enterprise income tax payment.

Labor-intensive enterprises producing and processing agricultural, forest and aquatic products, textiles and garments, leather and footwear or electronic components; or constructing socio-economic infrastructure facilities; enterprises producing mechanical products for use as means of production, engaged in waterway transportation (including inland waterway and sea transportation) or producing steel or cement which have other business activities (other than lottery, securities, finance, banking, insurance or production of commodities or provision of services liable to excise tax) are still eligible for deferred payment of enterprise income tax amounts they have not yet paid into the state budget as provided in this Article.

6. Enterprises eligible for deferred enterprise income tax payment provided in this Article are those established and operating under Vietnamese law, implementing the regime of accounting, invoices and documents in accordance with law, and paying tax according to declarations.

7. Enterprises eligible for deferred tax payment provided in this Article must make Appendix 2 (enclosed with this Circular) and send it to their managing tax agencies, specifying the case of their eligibility and the enterprise income tax amount eligible for deferred payment.

Article 4. Exemption from license tax for fishing and salt-producing households

Fishing households are exempted from license tax in 2012. Taxpayers eligible for tax exemption that have paid license tax in 2012 shall be refunded the paid tax amount.

Salt-producing households are further exempted from license tax as provided at Point 3 of the Ministry of Finance’s Circular No. 42/2003/TT-BTC guiding the amendment and supplementation of Circular No. 96/2002/TT-BTC of October 24, 2002.

Based on the approved 2012 license tax registers, before June 10, 2012, district-level tax departments shall make a list and determine the exempted tax amounts of fishing households eligible for license tax exemption in 2012 under their management, and shall report them to district-level People’s Committees; the directors of district-level tax departments shall issue decisions on license tax exemption in 2012 together with the list of households eligible for license tax exemption in 2012. District-level tax departments shall make lists of households eligible for tax refund in each commune, issue tax refund decisions and coordinate with state treasuries of the same level in refunding overpaid tax amounts through commune-level People’s Committees before June 15, 2012.

Based on the lists of license tax exemption and refund-eligible households decided by tax agencies, commune-level People’s Committees shall notify the exempted tax amounts to every taxpayer and publicly display the lists at convenient places for taxpayers to know. Commune-level People’s Committees shall refund the paid license tax amounts in 2012 to every household that pays tax before July 1, 2012.

Article 5. Deferment of land use levy payment

1. Subjects of application:

a/ For economic entities being investors of projects liable to pay land use levies according to notices of tax agencies or competent agencies but fail to pay or fully pay such levies by May 10, 2012, the maximum period of deferment of land use levy payment is 12 months under decisions of provincial-level People’s Committees, starting from May 10, 2012.

Economic entities shall continue paying land use levies together with late payment fines after the period of deferment of land use levy payment expires as provided at this Point;

b/ For economic entities being investors of projects liable to pay land use levies arising after May 10, 2012, through December 31, 2012, according to notices of tax agencies or competent agencies, the maximum period of deferment of land use levy payment is 12 months under decisions of provincial-level People’s Committees.

Late payment will not be fined in the period of deferment of land use levy payment provided in this Clause.

2. Based on the actual difficulties of investors and the effect of the revenue from levies on the land used for infrastructural investment on local budgets, after obtaining opinions from the standing bodies of the People’s Councils of  the same level, provincial-level People’s Committees shall decide on specific periods of deferment of land use levy payment for each project or group of projects for which the investors have not yet paid or fully paid land use levies. The maximum period of deferment is 12 months.

3. The order, procedures and competence to defer land use levy payment:

a/ Economic entities specified in Clause 5 of Resolution No. 13/NQ-CP shall send written requests specifying their financial difficulties to the provincial-level Department of Finance, enclosed with the following relevant documents (copies certified by the unit):

- The decision on land allocation for project implementation, issued by a competent state agency;

- The decision approving the land price for land use levy calculation, or the decision approving the payable land use levy, issued by a competent agency;

- The notice of payment of land use levy and fine for late payment (if any), issued by the tax agency or a competent agency;

- Documents and explanatory reports on the financial difficulties of the enterprise (if any).

b/ The provincial-level Finance Department shall, within 10 days after receiving a dossier of request for deferred land use levy payment, cooperate with the provincial-level Tax Department in reviewing and making proposals for particular periods of deferment and submit them to the provincial-level People’s Committee;

c/ The provincial-level People’s Committee shall consider the proposals of the finance and tax agencies and report them to the standing body of the People’s Council of the same level;

d/ After obtaining opinions of the standing body of the People’s Council of the same level, the provincial-level People’s Committee shall make specific decisions on deferred land use levy payment;

e/ The provincial-level Tax Department shall implement decisions of the provincial-level People’s Committee on deferred land use levy payment.

Article 6. Effect

This Circular takes effect on the date of its signing.

If the contents in previous documents are contrary to the guidance in this Circular, the guidance in this Circular shall apply.

For VAT at the stage of importation of machinery, equipment and specialized means of transport belonging to technology lines and construction materials which cannot be produced at home yet and need to be imported to create fixed assets of enterprises, the Ministry of Finance’s Circular No. 92/2010/TT-BTC of June 17, 2010, shall apply.

Article 7. Implementation responsibilities

1. Provincial-level People’s Committees shall direct functional agencies to strictly implement the Government’s regulations and the Ministry of Finance’s guidance.

2. Tax agencies at all levels shall disseminate and guide organizations and individuals to implement this Circular.

3. Organizations and individuals regulated by this Circular shall implement the guidance in this Circular.

Any problems arising in the course of implementation should be promptly reported to the Ministry of Finance for study and settlement.-

For the Minister of Finance
Deputy Minister
DO HOANG ANH TUAN