Decree No. 91/2014/ND-CP dated October 01, 2014 of the Government amending, supplementing a number of Articles under the Decree regulating on Tax

THE GOVERNMENT

Decree No. 91/2014/ND-CP dated October 01, 2014 of the Government amending, supplementing a number of Articles under the Decree regulating on Tax

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

Pursuant to the Law on Tax management dated November 29, 2006; the law amending, supplementing a number of articles of the Law on Tax management dated November 20, 2012;

Pursuant to the Law on Personal Income Tax dated November 21, 2007; the law amending, supplementing a number of articles of the law on personal income tax dated June 19, 2013;

Pursuant to the Law on Value Added Tax dated June 03, 2008; the law amending, supplementing a number of articles on the law on value added tax dated June 19, 2013;

Pursuant to the Law On Enterprise Income tax dated June 03, 2008; the law on amending, supplementing a number of articles of the law on enterprise income tax dated June 19, 2013;

At the proposal of the Minister of Finance,

The Government promulgates the Decree amending, supplementing a number of Articles in some Decrees regulating on tax.

Article 1. To amend, supplement the Decree No. 218/2013/ND-CP dated December 26, 2013 of the Government detailing the implementation of the law on enterprise income law as follows:

1. To amend, supplement Point m Clause 2 Article 3 as follows:

“m) Differences from revaluation of assets as prescribed by law to contribute capital or transfer upon splitting, merger, consolidation or conversion of business type excluding equitization, arrangement, renewal of 100% State enterprise.

Enterprises receive the assets accounted by re-evaluated price when determining the deductible expenses specified in Article 9 of this Decree;

2. To amend, supplement Clause 3 Article 4 as follows:

“3. For income from the performance of the contract for scientific research and technological development as stipulated under the law on science and technology, the tax exemption period must not exceed 03 year from the start date of revenue from the performance of the contract for scientific research and technological development; For income from the sale of products made on trial and income from products made by new technology first applied in Vietnam as stipulated by the law and guidelines of the Ministry of Science and Technology, the tax exemption period must not exceed 05 year from the start date of revenue from the sale of products, income from the sale of products produced for trial in the time of trial production as stipulated by the law”.

3. To amend, supplement Clause 9 Article 4 as follows:

“9. Income from performing the tasks assigned by the Vietnam Development Bank on development investment credit, export credit; income from credit activities for the poor and other subjects enjoyed preferential treatment policy of Vietnam Bank for Social Policies; income of one member limited liability companies managing the assets of Vietnamese credit Institutions; income from revenue-generated activities by performing the tasks assigned by the State of the State financial funds: Vietnam social insurance Fund, the deposit insurers, the health insurance Fund, the vocational training support Fund, the overseas employment support Fund of the Ministry of Labor, Invalids and Social Affairs, the farmer support Fund, Vietnam legal aid Fund, the public-utility telecommunications Fund, the local development investment Fund, Vietnam environmental protection Fund, the credit guarantee Fund for small- and medium-sized enterprises, the cooperative development aid Fund, the poor women support Fund, Fund for Assisting Overseas Vietnamese Citizens and Legal Entities, the protection Fund for citizens and legal persons in overseas, the housing development Fund, the development Fund for small- and medium-sized enterprise, the national scientific and technological development Fund, the National technological innovation fund; Incomes from the performance of tasks which are assigned by the State of the housing and land development Fund and other funds of the State that operate not for the profit are established by the Government and Prime Minister and operating under Vietnam s laws”.

4. To amend, supplement Point a Clause 1 Article 9 as follows:

“a) The actual expenses incurred in relation to the business and production activities of enterprises include the following expenditures:

- Expenditures for implementation of duties of national defense education and security, training, activities of militia forces and other duties of national defense and security as prescribed by law, the expenditures for operation of Party organizations and social political organizations in enterprises;

- The actual expenditures for activities on HIV/AIDS prevention at enterprises’ workplace, including expenses for training enterprises’ staff of HIV/AIDS prevention, expenses for organization of communication for HIV/AIDS prevention for employees, expenses for consultation, examination and HIV testing and expenses for supporting HIV sufferers who are enterprises’ employees;

- Welfare expenditures for the employees that the enterprises have the invoices, documents as stipulated such as: expenditures for funeral, wedding of employees and their families, vacations, expenditures for treatment, expenditures for training, expenditures for supporting employees’ families suffering from natural disasters, accidents, sickness; expenditures for transport on holidays for employees and other welfare expenditures according to guidelines of the Ministry of Finance; the total expenditures must not exceed an average real wage in the taxable year. ”

5. To amend, supplement Point d Clause 2 Article 9 as follows:

“The depreciation of fixed assets not in accordance with regulations of the Ministry of Finance includes: depreciation for car with 09 seats or less (except for automobiles used for business of passenger transport, tourism and hotel, automobiles for trial ) in proportion to the prime cost exceeding 1.6 billion dong/car; depreciation of civil aircraft or yachts not used for business of transport of passengers and goods or business of tourism and hotel

6. To amend, supplement Clause 3 Article 16 as follows:

“3. Tax exemption for 2 years, reduction of 50% of tax payable for the next 4 years for incomes from performing new investment projects specified in Clause 3, Article 15 of this Decree and enterprise’s income from performing new investment projects in industrial parks (except for industrial parks located in the areas with advantageous socio-economic conditions).

Areas with advantageous socio-economic conditions as specified under this Clause are urban districts of urban cities of special type or urban cities of type I directly under the Central and urban cities of type I directly under provinces that are newly established from districts since January 01, 2009. In the case that the industrial parks are located in both advantageous and disadvantageous, the determination of tax preferential for industrial parks shall be based on the areas with larger industrial park area. The determination of urban cities of special type or type I specified in this Clause shall comply with regulations of the Government on classification of urban cities.”

7. To supplement Clause 5a Article 19 as follows:

“5a. Investment projects permitted, in the first time registration dossier sending to the issuing agency, has registered for the investment capital, investment period together with the progress of investment, the following periods, the performed parts are considered as component projects of investment projects granted the first time permission if it is performed according to the progress (excluding the case that has subjective and unavoidable difficulties), it shall be enjoyed the preferential tax rate that is being applied for the first time investment project. For investment projects permitted before January 01, 2014, the remaining time for tax preferences shall be applied since January 01, 2014.

Investment projects of the enterprises are enjoying tax preferences but in the period of 2009 – 2013, they invest machinery, equipment in the production and business, the increasing part of incomes from investment of machinery, equipment shall be also enjoyed the tax preferences at a rate that is being applied for the remaining time of the project.”

8. To supplement Clause 5b Article 19 as follows:

“5b. The enterprise that is eligible for tax preferences according to the conditions on export rate but being cut tax preferences due to the commitments with the World Trade Organization for textiles from January 11, 2007 and other activities from January 01, 2012, shall select to combine preferences on tax and time for exemption, reduction to continue to enjoy the enterprise income tax preferences for the remaining time since 2007 for textile activities or since 2012 for other activities, corresponding with conditions for tax preferences that the enterprise meet (in addition to conditions on export rate, use of domestic material) as stipulated under the law on enterprise income tax that takes effect in the period from the enterprise was granted the establishment license until the effective day of the Decree No. 24/2007/ND-CP dated February 14, 2007 of the Government detailing the implementation of the law on enterprise income tax or according to regulations on enterprise income tax at the time of being adjusted for preferences due to the commitments with WTO.”

9. To amend Point 2, 3, 4, 5, 32, 37 of the list of areas entitled to preferential of enterprise income tax under the Appendix promulgated together with the Decree No. 218/2013/ND-CP as follows:

Article 2. To amend, supplement the Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government on detailing and guiding implementation of several articles of Law on Value-Added Tax as follows:

1. To amend, supplement Point a Clause 2 Article 3 as follows:

“a) Credit provision services include the following forms:

- Loan provision;

-Discount andrediscountof negotiable instruments and other valuable papers;

- Guarantee;

- Financial leasing;

- Issue of credit cards;

- Domestically and internationally factoring;

- Sale of loan collateral including the case that the borrower sells the loan collateral under the authorization of the lender to pay for the insured loans;

- Provision of credit information in accordance with Law on State bank;

2. To amend Point b Clause 2 Article 9 as follows:

“b) Having a payment document not using cash of purchased goods or services, except goods or services valued at under VND 20 million upon each purchase.

For goods or services purchased by deferred or installment payment, which are valued at over VND 20 million, business establishments shall, based on goods or service purchase contracts, value-added invoices and non-cash payment documents, declare and credit the input value-added tax. In case of non-availability of non-cash payment documents because the contractual payment time is not due, business establishments are still entitled to declare and credit the input value-added tax.

For goods or services purchased by clearing between the value of purchased goods or services and the value of sold goods or services, such clearing is also regarded as payment without cash use.”

3. To amend Point c Clause 1 Article 9 as follows:

“c) The input value-added tax of fixed assets, machinery, equipment, including the input value-added tax of operation of hiring these assets, machinery, equipment, in the following cases, shall be not credited but included in historical cost of fixed assets or the deducted costs as prescribed by Law on enterprise income tax and other guidelines: special-purpose fixed assets used for the manufacture of weapons and military equipment for security and defense purposes, fixed assets, machinery, equipment of credit institutions, re-insurance businesses, life insurance enterprises, securities trading enterprises, hospitals or training institutions; civil aircraft and yachts not for commercial transportation of cargo or passengers, or for tourist or hotel business.

For fixed assets being passenger cars of 9 seats or less (Except cars for commercial transportation of cargo or passengers, or for tourist or hotel business; cars used for trial driving for business) which are valued at over VND 1.6 billion, the input value-added tax amount corresponding to the amount in excess of VND 1.6 billion will not be credited.

Article 3. To amend, supplement the Decree No. 65/2013/ND-CP dated June 27, 2013 of the Government detailing a number of articles of the Law on Personal Income Tax and the Law Amending and Supplementing a Number of Articles of the Law on Personal Income Tax as follows:

1. To amend, supplement Point dd, Clause 2, Article 3 as follows:

“dd/ Other monetary or non-monetary benefits other than salaries and wages paid by employers for taxpayers in any form:

- House rents, charges for electricity, water and associated services (if any), excluding house benefits that employers build to provide for employees working at industrial parks, houses built by employers at the economic zones,areas with difficult socio-economic conditions, areas with extremely difficult socio-economic conditions to provide employees.

- Accumulated premiums of life insurance and other optional insurance, accumulated monetary contributions to the voluntary pension fund paid or contributed by employers for their employees. Before paying insurance money or pensions to individuals, insurance firms or voluntary pension fund management companies shall withhold a tax of 10% of the accumulated premiums or contributions corresponding to the amounts bought or contributed by employers for their employees from July 1, 2013.

- Membership fees and charges for other services such as healthcare, recreation, sports, entertainment and beauty care, which are provided for individuals upon their request;

- Other benefits as prescribed by law.

2. To amend Point b Clause 5 Article 30 as follows:

“b) Business individuals or households whose incomes from business have paid tax as stipulated under Clause 1, Article 10 of this Decree.”

3. To supplement Point e Clause 5 Article 30 as follows:

“Individuals being insurance agency, lottery agency, multi -level marketing that are deducted personal income tax by the employers.”

Article 4. To amend, supplement the Decree No. 83/2013/ND-CP of July 22, 2013, detailing a number of articles of the Law on Tax Administration and the Law Amending and Supplementing a Number of Articles of the Law on Tax Administration as follows:

1. To amend Clause 5 Article 5 as follows:

“In case taxpayers suspending business activities have made a written request to their direct managing tax agencies, they are not required to submit tax declaration dossiers during the period of suspension. In the case that taxpayers continue their business activities after suspension and already sent written notices thereof to their business registration agencies, they shall submit tax declaration dossiers as prescribed. The business registration agencies shall notify to the tax agency information about enterprises, households that suspend the business activities or continue their business activities.”

2. To supplement Clause 3a Article 7 as follows:

“3a. For large-scale enterprises, national projects, preferential investment projects approved by the Prime Minister before being granted investment license, the Ministry of Finance shall consider and recognize the priority enterprises when failing to meet the conditions about 2 operating years to judge about the compliance of the law and reliability of customs agency. The Ministry of Finance shall recognize the priority enterprises and apply the priority measures as stipulated under Clause 2 of this Article when the enterprises implement the building of infrastructure of the project.”

3. To amend Point b Clause 1 Article 11 as follows:

“b. Declaration on a quarterly basis is applicable to taxpayers that satisfy the condition of total turnover of up to 50 billion VND from goods or services in the preceding year.”

4. To amend Clause 1 Article 12 as follows:

“1. Declaration of enterprise income tax is the declaration for annual finalization or declaration for tax finalization upon enterprise division, splitting, consolidation, merger, ownership transformation (excluding the case of transformation that the receiving party shall get all obligations about tax of the enterprise before transformation), dissolution, operation termination excluding case of declaration for each time of arising of tax liability for enterprise income from the transfer of real estate or other business activities as prescribed by the law on enterprise income tax.

The tax agency shall examine the tax finalization of the enterprise within 15 working days since the receipt of documents, dossiers related to the tax finalization from the taxpayer upon enterprise division, splitting, consolidation, merger, ownership transformation, dissolution, operation termination. For dissolution, operation termination, the Ministry of Finance shall guide the mechanism for the tax agency to order and use the results of independent audit companies, organizations doing services business to process tax procedures for examination of tax finalization quick and convenient.”

5. To amend Clause 2 Article 12 as follows:

“2. Enterprise income tax declaration dossiers:

- Declaration for enterprise income tax finalization;

- The annual financial statement or financial statement up to the time of enterprise division, splitting, consolidation, merger, ownership transformation, dissolution or operation termination;

b) Dossiers of declaration of enterprise income tax on incomes from the transfer of real estate are declaration of enterprise income tax on incomes from the transfer of real estate;

c) Dossiers of enterprise income tax declaration for each time of arising of tax liability are declaration of enterprise income tax.

6. To supplement Point 1a Article 26 as follows:

“1a. Based on the efficiency of production, the taxpayer shall pay the amount for temporary calculation on a quarterly basis no later than the thirtieth of the quarter following the quarter arising the tax obligations.

Enterprises that have to make financial statements in accordance with legal regulations, based on the quarterly financial statements and legal regulations on tax to determine the quarterly temporary tax amount.

Enterprises that not have to make financial statements as stipulated, based on the enterprise income tax of the preceding year and the estimation of business efficiency in the year to determine the quarterly temporary tax amount

If the accumulation of four temporary payments is lower than 20% or over compared with the payable tax amount according to the tax finalization, the enterprise must pay the interest for late payment  for the differences from 20% or over between temporary amount and the finalization amount counting from the following day after the last day of quarter 4 tax payment until the day of paying the remaining amount of finalized amount.

7. To amend Clause 3 Article 31 as follows:

“3. Tax payment time limit extension:

a) A tax payment time limit extension must not exceed 2 (two) years from the date of expiration of the tax payment time limit, for the case specified at Point a, c Clause 1 of this Article;

The tax amount for extension for cases as stipulated under Point c Clause 1 of this Article must not exceed the amount owed by the state budget.

b) A tax payment time limit extension must not exceed 1 (one) year from the date of expiration of the tax payment time limit, for the cases specified at Points b, d Clause 1 of this Article.”

Article 5. Effect

1. This Decree takes effect on November 15, 2014. Regulations under Article 1 of this Decree shall be applied for 2014 enterprise income tax calculation.

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

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

For the Government

The Prime Minister

Nguyen Tan Dung