Decree No. 101/2011/ND-CP dated November 04, 2011 of the Government detailing the implementation of the Resolution No. 08/2011/QH13 of the National Assembly on additional issuance of some tax solutions to remove difficulties for enterprises and individuals

THE GOVERNMENT

Decree No. 101/2011/ND-CP of November 4, 2011, detailing the National Assembly’s Resolution No. 08/2011/QH13, additionally providing a number of tax-related solutions for enterprises and individuals to overcome their difficulties

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 3, 2008 Law on Enterprise Income Tax and Law on Value-Added Tax;

Pursuant to the November 21, 2007 Law on Personal Income Tax;

Pursuant to the November 29, 2006 Law on Tax Administration;

Pursuant to the National Assembly’s Resolution No. 08/2011/QH13 of August 6, 2011;

At the proposal of the Minister of Finance,

DECREES:

Article 1. Scope of regulation

This Decree details the National Assembly’s Resolution No. 08/2011/QH13 of August 6, 2011, additionally providing a number of tax-related solutions for enterprises and individuals to overcome their difficulties.

Article 2. Reduction of payable enterprise income tax amounts in 2011 for small- and medium-sized enterprises and labor-intensive enterprises

1. To reduce by 30% payable enterprise income tax amounts in 2011 for small- and medium-sized enterprises, excluding tax amounts on incomes from lottery, real estate, securities, finance, banking or insurance business activities or from the production or provision of excise tax-liable goods and services; and enterprises of the first or special grade in economic groups, corporations or enterprises organized after the parent company-subsidiary company model in which parent companies are not small- or medium-sized enterprises and hold over 50% of the equity capital of subsidiary companies.

Small- and medium-sized enterprises mentioned in this Clause (excluding non-business units) are those satisfying the criterion of capital or labor defined in Clause 1, Article 3 of the Government’s Decree No. 56/2009/ND-CP of June 30, 2009, on assistance for the development of small- and medium-sized enterprises. In case small- and medium-sized enterprises were newly established from January 1, 2011, the capital criterion is determined to be the charter capital stated in the business registration or investment certificate granted for the first time.

2.  To reduce by 30% of payable enterprise income tax amounts in 2011 for labor-intensive enterprises operating in the fields of production or processing of agricultural-forest-fishery products, textile and garment, leather and footwear or electronic components, or construction of socio-economic infrastructure works.

Labor-intensive enterprises mentioned in this Clause are those regularly employing more than 300 laborers in 2011 more than 300 persons, excluding laborers working under short-term contracts of less than 3 months. For enterprises organized after the parent company-subsidiary company model, the number of laborers used as a basis for determining parent companies eligible for tax reduction does not include the number of laborers of subsidiary companies. The enterprise income tax amount to be reduced is that calculated on incomes from the production or processing of agricultural-forest-fishery products, textile and garment, leather and footwear or electronic components and from the construction of socio-economic infrastructure works.

Production and processing of agricultural-forest-fishery products, textile and garment, leather and footwear or electronic components mentioned in this Clause shall be determined according to Vietnam’s system of industries promulgated together with the Prime Minister’s Decision No. 10/2007/QD-TTg of January 23, 2007.

Construction of socio-economic infrastructure works mentioned in this Clause includes construction and installation of waterworks, power plants, electricity transmission and distribution works; water drainage and supply systems; roads; railways; airports, seaports, river port; airports, railway stations, bus stations; building of schools, hospitals, cultural houses, cinemas, art performance facilities, sports training and competition facilities; wastewater and solid waste treatment systems; communication works, irrigation works for agriculture, forestry and fisheries.

3. Enterprise income tax amounts to be reduced under Clauses 1 and 2 of this Article are those temporarily calculated for quarterly payment and those payable under the tax finalization reports of 2011.

4. Enterprises shall separately account incomes from activities eligible for enterprise income tax reduction specified in this Article. In case of inability to separately account these incomes, incomes used for calculating reduced tax amounts shall be determined according to the percentage (%) between revenues of tax reduction-eligible activities and total revenues in 2011.

5. Enterprises eligible for tax reduction mentioned in this Article are those established and operating under the laws of Vietnam; implementing the regime of accounting, invoices, and vouchers under regulations and paying tax by declaration.

Article 3. To reduce value-added tax, personal income tax and enterprise income tax amounts for house lease, child care and supply of shift meals

1.  To reduce by 50% presumptive value-added tax and personal income tax amounts arising from July 1 through December 31, 2011, for households and individuals that lease houses or rooms to workers, students or pupils; households or individuals that take care of children; and households and individuals that supply shift meals to workers.

Presumptive value-added tax and personal income tax amounts mentioned in this Clause comply with the law on tax administration.

2. To reduce by 50% payable value-added tax and personal income tax amounts arising from July 1 through December 31, 2011, for supplying shift meals to workers of enterprises (except supplying meals for transportation companies, airlines and other business activities).

Enterprises eligible for tax reduction mentioned in this Clause must meet the requirements specified in Clause 5, Article 2 and Clause 3, Article 3 of this Decree.

3. Households, individuals and enterprises eligible for tax reduction mentioned in this Article shall commit to keeping stable charge rates of leasing houses or rooms, taking care of children and supplying shift meals applied in December 2010.

Charge rates for the above business activities must be publicized and posted up at the business establishments and notified to authorities of communes or wards where the business activities are carried out and tax agencies directly managing them. In case households, individuals or enterprises are detected through inspection to fail to keep their commitment specified in this Clause, they shall not enjoy tax reductions provided in this Article.

Article 4. Personal income tax exemption and reduction

1. To exempt personal income tax from August 1, 2011, through December 31, 2012, for dividends divided to individuals from securities investments or capital contributions to buy corporate shares, except dividends divided by joint-stock banks, financial investment funds or credit institutions.

2. To reduce by 50% payable personal income tax amounts from August 1, 2011, through December 31, 2012, for incomes from individuals’ transfer of securities.

3. To exempt personal income tax from August 1 through December 31, 2011, for individuals having taxable incomes from salaries, wages or business activities which reach the tax-threshold at grade 1 in the Partially Progressive Tariff provided in Article 22 of the Law on Personal Income Tax.

Taxable income used as a basis for determining the tax exemption mentioned in this Clause is the average monthly taxable income actually received by individuals in 2011.

Article 5. Effect

1. This Decree takes effect on December 20, 2011.

2. If enterprises are eligible for different tax incentives for an income in a period of time, they may choose to enjoy the highest tax incentive.

In case an enterprise is enjoying enterprise income tax incentives under regulations, the enterprise income tax amount to be reduced under this Decree is the remaining tax amount after subtracting the enterprise income tax incentives that the enterprise is enjoying.

3. The Ministry of Finance shall specifically guide and handle the cases in which enterprises have declared and remitted the tax amounts to be reduced under Articles 2 and 3 of this Decree into the state budget.

Article 6. Implementation responsibilities

1. The Ministry of Finance shall guide this Decree.

2. Provincial-level People’s Committees shall, based on their competence provided by law, guide local departments, sectors and authorities to coordinate with tax agencies in communicating, supervising and examining the implementation of this Decree.

3. Commune or ward tax advisory councils shall coordinate with local state management agencies in charge of prices in certifying, monitoring and examining the implementation of the price stabilization commitment of households, individuals and enterprises specified in Article 3 of this Decree.

4. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees and related organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG