Decree No. 60/2012/ND-CP dated July 30, 2012 of the Government detailing Resolution No. 29/2012/QH13, on promulgation of a number of tax policies to remove difficulties for organizations and individuals

THE GOVERNMENT

Decree No. 60/2012/ND-CP of July 30, 2012, detailing Resolution No. 29/2012/QH13, on promulgation of a number of tax policies to remove difficulties for organizations and individuals

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

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

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

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

Pursuant to the National Assembly’s Resolution No. 29/2012/QH13 of June 28, 2012, on promulgation of a number of tax policies to remove difficulties for organizations and individuals;

At the proposal of the Minister of Finance;

The Government issues this Decree detailing Resolution No. 29/2012/QH13 on promulgation of a number of tax policies to remove difficulties for organizations and individuals,

Article 1. Scope of regulation

This Decree details the National Assembly’s Resolution No. 29/2012/QH13 of June 21, 2012, on promulgation of a number of tax policies to remove difficulties for organizations and individuals.

Article 2. To reduce 30% of payable enterprise income tax amounts in 2012 for the enterprises specified in Clause 1, Article 1 of Resolution No. 29/2012/QH13, as follows:

1. Small- and medium-sized enterprises, excluding small- and medium-sized enterprises in the sectors of lottery, real estate, securities, finance, banking or insurance, production of goods, or provision of services liable to excise tax, and grade-1 and special-grade enterprises of economic groups and corporations.

a/ Small- and medium-sized enterprises entitled to tax reduction provided in this Clause are enterprises, including cooperatives (excluding non-business units), that satisfy the criteria of capital or labor prescribed in Clause 1, Article 3 of the Government’s Decree No. 56/2009/ND-CP of June 30, 2009, on support for development of small- and medium-sized enterprises.

The capital used as the basis for determination of a small- or medium-sized enterprise is the total capital indicated in the enterprise’s accounting balance sheet made on December 31, 2011. For an enterprise established on January 1, 2012, or later, the capital used as the basis for determination of a small- or medium-sized enterprise is the charter capital stated in the enterprise’s business registration certificate or first investment certificate.

The annual average number of employees used as the basis for determination of a small- or medium-sized enterprise (including the number of employees in branches and affiliated units) is the number of employees which the enterprise constantly employed in 2011, excluding those working under short-term contracts of less than 3 months. The annual average number of employees is determined under the guidance of the Ministry of Labor, War Invalids and Social Affairs.

b/ Tax reduction prescribed in this Clause does not apply to:

Small- and medium-sized enterprises only engaged in lottery; real estate; securities; finance; banking or insurance; or production of goods or provision of services liable to excise tax. If a small- or medium-sized enterprise is engaged in different business lines, the deductible enterprise income tax amount shall not include the tax amount calculated on earnings from lottery, real estate, securities, finance, banking or insurance, production of goods, or provision of services liable to excise tax.

2. Labor-intensive enterprises engaged in production, sub-contract production or processing of agricultural, forest and fishery products, textile and garment, leather and footwear, and electronic parts; and from socio-economic infrastructure construction.

Labor-intensive enterprises enjoying tax reduction under this Clause are those having an average number of permanent employees of over 300 in 2012, excluding those working under short-term contracts of less than 3 months. For an enterprise organized under the model of parent company and subsidiary companies, the number of employees used as the basis for determination of the parent enterprise’s eligibility for enterprise income tax reduction excludes the number of employees of subsidiary companies.

The deductible enterprise income tax amount is the tax amount calculated on incomes from production, sub-contract production or processing of agricultural, forest and fishery products, textile and garment, leather and footwear, and electronic parts; and from socio-economic infrastructure construction.

The production, sub-contract production and processing of agricultural, forest and fishery products, textile and garment, leather and footwear, and electronic parts specified in this Clause are defined in the Vietnam’s System of industries promulgated together with the Prime Minister’s Decision No. 10/2007/QD-TTg of January 23, 2007.

Socio-economic infrastructure construction specified in this Clause includes execution, construction and installation of water plants, power plants, electric transmission and distribution works; water supply and drainage systems; roads, railways; airports, seaports, river ports; airfields, railway stations, coach stations; building of schools, hospitals, cultural houses, cinemas, art performance facilities, sports training and competition centers; systems of wastewater and solid waste treatment; and communication and irrigation works for agricultural, forestry and fishery production.

3. The deductible enterprise income tax amount under Clauses 1 and 2 of this Article is the temporarily calculated quarterly payable tax amount and the remaining payable amount under the 2012 tax finalization.

4. Enterprises which enjoy the enterprise income tax reduction under this Article are those established and operating in accordance with Vietnamese law; implementing accounting, invoice and voucher regimes under law and paying taxes by the declaration method.

Article 3. To exempt presumptive tax (for value-added tax and personal income tax) and enterprise income tax of 2012 for households, individuals and organizations specified in Clause 2, Article 1 of Resolution No. 29/2012/QH13, as follows:

1. To exempt presumptive tax (for value-added tax and personal income tax) of 2012 for households and individuals leasing houses or apartments to workers, laborers, students and pupils; baby-sitting households and individuals; and households and individuals supplying mid-shift meals for workers.

The presumptive tax rates of value-added tax and personal income tax provided in this Clause shall be determined under the law on tax administration.

2. To exempt payable value-added tax and enterprise income tax arising in 2012 for the supply of mid-shift meals for workers (excluding the supply of mid-shift meals for transportation and aviation enterprises, and other business operations) by enterprises.

In case an enterprise is engaged in different business lines:

The exempt enterprise income tax amount is calculated only on incomes from the supply of mid-shift meals. If unable to determine the income from activities eligible for tax exemption, the income for calculation of the exempt tax amount shall be determined based on the percentage (%) of incomes from the supply of mid-shift meals against the total turnover of the enterprise in 2012.

The exempt value-added tax amount is determined based on the rate of value-added tax liable incomes from the monthly supply of mid-shift meals against the total turnover of goods and services liable to value-added tax in that month.

Enterprises eligible for tax exemption under this Clause must satisfy the requirements provided in Clause 4, Article 2, and Clause 3, Article 3, of this Decree and pay value-added tax by the credit method.

3. Business households and individuals and enterprises eligible for tax exemption under this Article must commit to keeping rent rates or baby-sitting charge rates or prices of mid-shift meals in 2012 not higher than the prices of December 2011.

Rent rates, baby-sitting charge rates and prices of mid-shift meals must be publicized and posted up at business establishments and notified to administrations of communes and wards where enterprises operate and direct managing tax offices. In case business households, individuals or organizations are detected through examination or inspection not to perform their commitments on prices specified in this Clause, they are not entitled to the tax exemption under this Article. If business households, individuals and organizations ineligible for tax exemption have declared for tax exemption, they shall be collected tax arrears and fined for delayed tax payment under the law on tax administration.

Article 4. To exempt personal income tax under Clause 3, Article 1 of Resolution No. 29/2012/QH13, as follows:

To exempt personal income tax from July 1, 2012, through December 31, 2012, for individuals with taxable incomes from salaries, pays or from business activities which fall on grade 1 of the partially progressive tariff provided in Article 22 of Law on Personal Income Tax.

Taxable income used as the basis for determination of the tax exemption provided in this Article is the monthly average taxable income of an individual actually received in 2012.

Article 5. Effect

1. This Decree takes effect on September 20, 2012.

2. An enterprise that concurrently enjoys various preferential tax rates for an income may apply the highest tax incentive of all.

For an enterprise enjoying preferential enterprise income tax under law, the deductible enterprise income tax amount under this Decree shall be calculated on the remaining tax amount after being subtracted the enterprise income tax amount entitled to incentives.

3. The Ministry of Finance shall guide the refund or offsetting with payable tax amounts for enterprises, households and individuals that have declared or paid tax amounts to be reduced or exempted under Article 2 or Article 3 of this Decree.

Article 6. Implementation responsibilities

1. The Ministry of Finance shall guide the implementation of this Decree.

2. People’s Committees of provinces and centrally run cities shall, within their vested powers, direct departments, divisions, sectors and local administrations at all levels to coordinate with tax offices in disseminating, urging and inspecting the implementation of this Decree.

3. Tax advisory councils of communes and wards shall coordinate with local state management agencies in charge of pricing in certifying, supervising and inspecting the implementation of price commitments of business households and individuals and enterprises under Article 3 of this Decree.

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

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG