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

DECREE

Amending and supplementing a number of articles of the decrees on taxes[1]

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

Pursuant to the November 29, 2006 Law on Tax Administration, and the November 20, 2012 Law Amending and Supplementing a Number of Articles of the Law on Tax Administration;

Pursuant to the November 21, 2007 Law on Personal Income Tax, and the November 22, 2012 Law Amending and Supplementing a Number of Articles of the Law on Personal Income Tax;

Pursuant to the June 3, 2008 Law on Value-Added Tax, and the June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax;

Pursuant to the June 3, 2008 Law on Enterprise Income Tax, and the June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax;

At the proposal of the Minister of Finance,

The Government promulgates the Decree amending and supplementing a number of articles of the decrees on taxes.

Article 1. To amend and supplement the Government’s Decree No. 218/2013/ND-CP of December 26, 2013, detailing and guiding the implementation of the Law on Enterprise Income Tax as follows:

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

“m/ Differences resulting from the revaluation of assets in accordance with law for capital contribution or transfer upon division, split, merger, consolidation or transformation of enterprises, except those resulting from equitization, reorganization and renewal of wholly state-owned enterprises.

Asset-receiving enterprises may conduct accounting based on revaluation prices upon determining deductible expenses specified in Article 9 of this Decree.”

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

“3. For incomes from the performance of scientific research and technological development contracts in accordance with the law on science and technology, the maximum tax exemption duration is 3 years from the date of generating turnover from the performance of such contracts; for incomes from the sale of products turned out with technologies applied for the first time in Vietnam in accordance with law and guidance of the Ministry of Science and Technology, the maximum tax exemption duration is 5 years from the date of generating turnover from the sale of such products; incomes from the sale of products turned out from trial production during the trial production process comply with law.”

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

“9. Incomes from the performance of state-assigned tasks of the Development Bank of Vietnam in development investment credit and export credit activities; incomes from the Social Policy Bank’s activities of providing loans to the poor and other policy beneficiaries; incomes of the single-member limited liability company managing assets of Vietnamese credit institutions (Vietnam Asset Management Company - VAMC); incomes from revenue-earning activities in the performance of state-assigned tasks of the state financial funds: the Vietnam Social Security Fund, Deposit Insurance, Health Insurance Fund, Vocational Training Support Fund, Overseas Employment Support Fund under the Ministry of Labor, War Invalids and Social Affairs, Farmer Support Fund, Vietnam Legal Aid Fund, Vietnam Public-Utility Telecommunications Fund, local development investment funds, Vietnam Environmental Protection Fund, Credit Guarantee Fund for Small- and Medium-Sized Enterprises, Cooperative Development Support Fund, Support Fund for Poor Women, Fund for Assisting Overseas Vietnamese Citizens and Legal Entities, Housing Development Fund, Fund for Development of Small- and Medium-Sized Enterprises, National Foundation for Science and Technology Development, and National Technology Innovation Fund; incomes from the performance of state-assigned tasks of the Land Development Fund and other not-for-profit state funds which are prescribed by, or established under decisions of the Government or the Prime Minister and operate in accordance with law.”

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

“a/ They are actually paid for production and business activities of enterprises, including the following expenses:

- Expenses for the performance of the tasks of national defense and security education, drills and operations of militia and self-defense forces and other national defense and security tasks in accordance with law; expenses in support of operations of Party organizations and socio-political organizations in enterprises;

- Expenses actually paid for HIV/AIDS prevention and control at workplaces of enterprises, including expense for training of HIV/AIDS prevention and control personnel of enterprises, expense for HIV/AIDS prevention and control communication among employees of enterprises, charges for medical consultation, examination and HIV test, expense for HIV-infected employees of enterprises;

- Expenses paid as welfare amounts for laborers of enterprises with invoices or documents as prescribed by law, including expense for funerals and weddings of employees and their families, expense for vacations, financial support for medical treatment or further study of employees at training institutions, financial support for employees’ families affected by natural disasters, enemy sabotages, accidents or illness; expense for commendation of employees’ children with good schooling results; financial support for employees’ travel in public holidays and other welfare payments as guided by the Ministry of Finance. The total expenses must not exceed one employee’s monthly salary actually paid the tax year.”

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

“d/ Fixed asset depreciation made in contravention of the Finance Ministry’s regulations, including depreciation for passenger cars of 9 seats or less (except cars used for commercial transportation of passengers, for tourist or hotel business, or model cars or cars for test drive in automobile business) corresponding to the historical cost in excess of VND 1.6 billion/car; depreciation for civil aircraft or yachts not used for commercial cargo or passenger transportation or tourist or hotel business.”

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

“3. Tax exemption for 2 years and 50% reduction of payable tax amounts for 4 subsequent years are applicable to incomes earned by enterprises from the implementation of new investment projects specified in Clause 3, Article 15 of this Decree and new investment projects in industrial parks (except those in localities with favorable socio-economic conditions).

Localities with favorable socio-economic conditions specified in this Clause are inner districts of centrally run special-grade or grade-I urban centers and provincially run grade-I urban centers, excluding newly established districts from January 1, 2009, of centrally run special-grade or grade-I urban centers and provincially run grade-I urban centers. The determination of tax incentives for industrial parks located in both localities with favorable and unfavorable conditions must be based on field locations of investment projects. The determination of special-grade or grade-I urban centers specified in this Clause must comply with the Government’s regulations on classification of urban centers.”

7. To add following Clause 5a to Article 19:

“5a. For licensed investment projects of which the first-time investment  registration dossiers submitted to investment licensing agencies have registered investment capital amounts, investment phases and implementation schedules, their subsequent phases, which shall be considered component projects of these first-time licensed investment projects if following the registered schedules (except those encountering objective difficulties or force majeure circumstances), are eligible for tax incentives applicable to the first-time investment projects. For projects licensed for investment before January 1, 2014, the remaining duration of enjoyment of tax incentives shall be counted from January 1, 2014.

Additional incomes from regular additional investment in machinery and equipment during 2009 - 2013 in the production and business process of enterprises’ investment projects enjoying tax incentives are also eligible for tax incentives at the level applicable to their remaining duration.”

8. To add following Clause 5b to Article 19:

“5b. Within the remaining duration of enjoying tax incentives according to the export ratio condition, if enterprises are suspended from enjoying tax incentives due to realizing the commitments with the World Trade Organizations (WTO) for textile and garment sector from January 11, 2007, and other sectors from January 1, 2012, they may choose specific preferential tax rates or duration of tax exemption or reduction in order to continue enjoying enterprise income tax incentives in the remaining duration since 2007 for textile and garment sector or since 2012 for other sectors, corresponding to conditions for enjoyment of tax incentives actually met by these enterprises (except conditions for incentives after meeting the conditions on export ratio or use of domestic materials) provided in legal documents on enterprise income tax which are effective from the date enterprises are granted establishment licenses to the effective date of the Government’s Decree No. 24/2007/ND-CP of February 14, 2007, detailing the implementation of the Law on Enterprise Income Tax or provision of legal documents on enterprise income tax at the time of adjustment of tax incentives due to realizing the WTO commitments.”

9. To amend Points 2, 3, 4, 5, 32 and 37 of the List of localities eligible for enterprise income tax incentives in the Appendix to the Government’s Decree No. 218/2013/ND-CP of December 26, 2013, as follows:

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

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

“a/ Credit provision services include:

- Loan provision;

- Discount and rediscount of negotiable instruments and other valuable papers;

- Guarantee;

- Financial leasing;

- Issuance of credit cards;

- Domestic factoring; international factoring;

- Sale of loan security assets, including cases in which borrowers sell loan security assets by themselves as authorized by lenders for repayment of loans with security assets;

- Provision of credit information in accordance with the Law on the State Bank of Vietnam;

- Other forms of credit provision as prescribed by law.”

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

“b/ Having non-cash payment documents for goods and services purchased, except goods and services valued at under VND 20 million upon each purchase.

For goods and services purchased on deferred payment or payment in installments and valued at VND 20 million or more, business establishments shall make declaration and credit of input value-added tax for these goods and services based on goods and service purchase contracts, added-value invoices and non-cash payment documents. If non-cash payment documents are not yet available because the contractual payment time is not due, business establishments may still make declaration and credit of input value-added tax.

Payment for goods and services purchased by clearing the value of goods and services purchased against the value of goods and services sold is also regarded as non-cash payment.”

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

“c/ Input value-added tax on fixed assets, machinery and equipment, including input value-added tax on lease of these assets, machinery and equipment, may not be credited in the following cases but shall be included in historical costs of fixed assets or in deductible expenses in accordance with the Law on Enterprise Income Tax and guiding documents: fixed assets used exclusively for manufacture of weapons and military equipment for national defense and security purposes; fixed assets, machinery and equipment of credit institutions, reinsurance businesses, life insurance businesses, securities businesses, medical examination and treatment establishments and training institutions; civil aircraft and yachts not used for cargo and passenger transportation, tourist or hotel business.

For fixed assets being passenger cars of 9 seats or less (except cars used for cargo and passenger transportation, tourist or hotel business; model cars and cars test drive in automobile business) which are valued at over VND 1.6 billion, the input value-added tax amount for the value exceeding VND 1.6 billion may not be credited.”

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

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

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

- House rentals, charges for electricity, water and associated services (if any), excluding benefits from houses built by employers for their employees working in industrial parks, houses built by employers for their employees in economic zones, localities with difficult socio-economic conditions and localities with particularly difficult social-economic conditions.

- Accumulated premiums for 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 sums or pensions to individuals, insurance companies 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 that earn incomes from business activities and have paid tax under Clause 1, Article 10 of this Decree.”

3. To add following Point e to Clause 5, Article 30:

“e/ Individuals acting as insurance agents, lottery agents and multi-level marketing businesses have personal income tax withheld by income-paying organizations.”

Article 4. To amend and supplement the Government’s Decree No. 83/2013/ND-CP of July 22, 2013, detailing a number of articles of the Law on Tax Administration and 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:

“5. In case taxpayers suspending business activities have made a written request to business registration agencies at which taxpayers had registered, they are not required to submit tax declaration dossiers during the period of business suspension. In case taxpayers resume their business activities after the suspension and send written notices thereof to business registration agencies at which taxpayers have made registration, they shall submit tax declaration dossiers as prescribed. Business registration agencies at which enterprises or business households have made registration shall notify tax agencies of information that enterprises or business households resume their business activities after the suspension.”

2. To add following Clause 3a to Article 7:

“3a. For enterprises having their large-scale investment, projects of national importance or priority investment projects approved by the Prime Minister before being granted investment licenses, the Ministry of Finance is assigned to consider and recognize them as priority enterprises though they do not meet the condition of 2 years’ operation in order to assess their law observance and reliability of customs offices. The Ministry of Finance shall recognize priority enterprises and apply priority measures specified in Clause 2 of this Article when these enterprises construct physical foundations of their projects.”

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

“b/ Declaration on a quarterly basis applies to taxpayers that meet the condition of total turnover of up to VND 50 billion from goods and services of the preceding year.”

4. To amend Clause 1, Article 12 as follows:

“1. Declaration of enterprise income tax is declaration for annual finalization or declaration for tax finalization upon enterprise division, consolidation, merger,  transformation (excluding cases of transformation in which the successor inherits all tax obligations of the enterprise before the transformation), dissolution or operation termination, except for the declaration for each time of generation of enterprise income tax from the transfer of real estate or other business activities in accordance with the law on enterprise income tax.

Tax agencies shall examine tax finalization of enterprises within 15 (fifteen) working days after receiving documents and dossiers related to the finalization of tax obligations of taxpayers in case of enterprise division, consolidation, merger, transformation, dissolution or operation termination. In cases of enterprise dissolution or operation termination, the Ministry of Finance shall guide the mechanism for tax agencies to place orders and use results of independent audit firms, organizations that provide services of carrying out tax procedures to quickly and conveniently conduct the examination of tax finalization of enterprises.”

5. To amend Clause 2, Article 12 as follows:

“2. Enterprise income tax declaration dossiers:

a/ A dossier of declaration for enterprise income tax finalization comprises:

- Declaration for enterprise income tax finalization;

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

b/ Dossiers of declaration of enterprise income tax on incomes from the transfer of real estate, which are enterprise income tax returns for incomes from the transfer of real estate;

c/ Dossiers of declaration of enterprise income tax for each time of generation, which are enterprise income tax returns.”

6. To add following Clause 1a to Article 26:

“1a. Based on production and trade results, taxpayers shall temporarily pay quarterly enterprise income tax amounts on the thirtieth day of the quarter following the quarter when the tax obligation arises at the latest.

For enterprises required to make quarterly financial statements in accordance with the law, their quarterly financial statements and provisions the tax laws shall serve as bases for determination of enterprise income tax amounts to be temporarily paid in each quarter.

For enterprises not required to make quarterly financial statements, their enterprise income tax amounts of the previous year and expected production and business results of the current year shall serve as bases for determination of enterprise income tax amounts to be temporarily paid in each quarter.

In case total temporarily paid amount of four quarters is at least 20% lower than the payable enterprise income tax amount according to the finalization, enterprises shall pay late payment interests for the difference of at least 20% between the temporarily paid amount and the finalized amount counted from the day following the fourth quarter’s tax payment deadline to the day of actual payment of the deficit tax amount compared to the 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 tax payment deadline, for the cases specified at Points a and c, Clause 1 of this Article.

Tax amounts eligible for tax payment time limit extension in the case specified at Point c, Clause 1 of this Article must not exceed the owed state budget remittance.

b/ A tax payment time limit extension must not exceed 1 year from the tax payment deadline, for the cases specified at Points b and d, Clause 1 of this Article.”

Article 5. Effect and implementation responsibility

1. This Decree takes effect on November 15, 2014. Particularly, the provisions of Article 1 of this Decree apply to the period of enterprise income tax calculation from 2014.

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

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

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG