Decree 92/2021/ND-CP detailing Resolution 406/NQ-UBTVQH15 on solutions to support enterprises and people affected by COVID-19

DECREE

Detailing the National Assembly Standing Committee’s Resolution No. 406/NQ-UBTVQH15 providing a number of solutions to support enterprises and people affected by the Covid-19 pandemic^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration;

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;

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 November 14, 2008 Law on Excise Tax; and the November 26, 2014 Law Amending and Supplementing a Number of Articles of the Law on Excise Tax;

Pursuant to the June 3, 2008 Law on Value-Added Tax; the June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax; and the April 6, 2014 Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax, the Law on Excise Tax and the Law on Tax Administration;

Pursuant to the November 26, 2014 Law Amending and Supplementing a Number of Articles of the Laws on Taxes;

Pursuant to the June 13, 2019 Law on Tax Administration;

Pursuant to the National Assembly Standing Committee’s Resolution No. 406/NQ-UBTVQH15 of October 19, 2021, providing a number of solutions to support enterprises and people affected by the Covid-19 pandemic;

At the proposal of the Minister of Finance;

The Government promulgates the Decree detailing the National Assembly Standing Committee’s Resolution No. 406/NQ-UBTVQH15 of October 19, 2021, providing a number of solutions to support enterprises and people affected by the Covid-19 pandemic (below referred to as Resolution No. 406/NQ-UBTVQH15).

Article 1. Reduction of enterprise income tax

1. Subjects of application

The enterprise income tax reduction mentioned in this Article applies to enterprise income tax payers being organizations producing goods or providing services with taxable income (below collectively referred to as enterprises) under Article 1 of Resolution No. 406/NQ-UBTVQH15, including:

a/ Enterprises established in accordance with Vietnam’s laws.

b/ Organizations established in accordance with the Law on Cooperatives.

c/ Non-business units established in accordance with Vietnam’s laws.

d/ Other organizations established in accordance with Vietnam’s laws and engaged in income-generating production or business activities.

2. Thirty percent reduction of payable enterprise income tax amounts of the 2021 enterprise income tax period for enterprises specified in Clause 1 of this Article that earn turnover in the 2021 tax period not exceeding VND 200 billion and seeing a turnover reduction as compared to that in the 2019 tax period.

The criterion of turnover reduction in the 2021 tax period as compared to that in the 2019 tax period does not apply to enterprises that were established, consolidated, merged, divided or separated in the 2020 and 2021 tax periods.

a/ The enterprise income tax period is the calendar year; if enterprises apply a fiscal year other than the calendar year, the enterprise income tax period is the applicable fiscal year provided in the Law on Enterprise Income Tax and guiding documents.

b/ Turnover in the enterprise income tax period includes all monetary amounts earned from goods sale, processing, service provision and business activities under business cooperation contracts, including also price subsidies, surcharges, and additional earnings enjoyable by enterprises in accordance with the Law on Enterprise Income Tax and guiding documents, and excluding turnover reduction amounts and turnover from financial activities and other income amounts.

- In case a newly established, transformed, consolidated, merged, divided, separated, dissolved or bankrupt enterprise has operated in a tax period for less than 12 months, its turnover of such tax period equals its actual turnover divided by (:) the number of months it has actually conducted production or business activities in the tax period multiplied by (x) 12 months. In case an enterprise is established, transformed, consolidated, merged, divided, separated, dissolved or bankrupt in a month, its operation duration shall be regarded as a full month.

In case the first year’s tax period for a newly established enterprise is the year 2020 or the last year’s tax period for a transformed, consolidated, merged, divided, separated, dissolved or bankrupt enterprise is the year 2022 which lasts for less than 3 months and the enterprise may aggregate such duration with the 2021 tax period to form an enterprise income tax period, the determination of turnover and to-be-reduced tax amount only applies to 12 months of the 2021 tax period.

- In case an enterprise has dependent units or business locations, its turnover in the enterprise income tax period includes turnover amounts of its dependent units or business locations as shown in its annual general financial statements.

3. Method of determining to-be-reduced enterprise income tax amounts

To-be-reduced enterprise income tax amounts of the 2021 tax period shall be calculated on the whole income amounts of enterprises, including also the income amounts specified in Clause 3, Article 18 of the Law on Enterprise Income Tax. To-be-reduced enterprise income tax amounts specified in this Decree shall be calculated on payable enterprise income tax amounts for the 2021 tax period after subtracting incentive-eligible enterprise income tax amounts currently enjoyed by enterprises in accordance with the Law on Enterprise Income Tax and guiding documents.

4. Tax reduction declaration

a/ Based on their turnover amounts in the 2019 tax period and projected turnover amounts in the 2021 tax period, enterprises shall determine by themselves to-be-reduced tax amounts upon temporary payment of quarterly enterprise income tax amounts. Enterprises shall determine officially reduced enterprise income tax amounts for declaration according to the form provided together with the Ministry of Finance’s Circular No. 80/2021/TT-BTC of September 29, 2021, guiding a number of articles of the Law on Tax Administration, and the Government’s Decree No. 126/2020/ND-CP of October 19, 2020, and under the guidance on to-be-reduced enterprise tax provided in Appendix II to this Decree.

b/ Upon the account-finalization of 2021 enterprise income tax amounts, the handling of deficit or surplus amounts of tax amounts temporarily paid in quarters against tax amounts payable under annual account-finalization statements must comply with the law on tax administration.

c/ Through investigation, examination or audit, if tax offices and competent agencies detect that enterprises are ineligible for tax reduction under this Decree or their payable tax amounts for the 2021 tax period are larger than those they have declared, they shall fully pay the difference after deducting the reduced amounts (if any) under this Decree or be subject to tax-related administrative sanctions based on deficit tax amounts and pay late-payment interests in accordance with the law on tax administration and law on handling of administrative violations.

In case enterprises’ additional declarations in their dossiers of enterprise income tax declaration for the 2021 tax period or decisions, conclusions or notifications on results of inspections, examinations or audits of tax offices or competent agencies bring about higher payable enterprise income tax amounts, additional tax amounts shall be entitled to 30% reduction under this Decree if enterprises still satisfy the tax reduction conditions specified in Clause 2 of this Article.

In case enterprises’ additional declarations in their dossiers of enterprise income tax declaration for the 2021 tax period or decisions, conclusions or notifications on results of inspections, examinations or audits of tax offices or competent agencies bring about lower payable enterprise income tax amounts, to-be-reduced tax amounts enjoyed by enterprises under this Decree shall be reduced and overpaid tax amounts (if any) shall be handled under the law on tax administration.

Article 2. Tax exemption for business households and business individuals

1. Subjects of application

Business households and business individuals that are individual residents operating in all sectors or trades, applying different forms of tax declaration and payment, conducting production or business activities in rural districts, towns, urban districts and towns of provinces or centrally run cities (below collectively referred to as district-level localities) and affected by the COVID-19 pandemic in 2021.

Provincial-level People’s Committee chairpersons shall base themselves on local competent agencies’ the COVID-19 pandemic-related notices issued in 2021 with contents on termination or suspension of production or business activities of one or more than one business household and business individual in their localities (including lockdown or social distancing periods in one or more than one area in their localities) to promulgate lists of district-level localities affected by the COVID-19 pandemic under this Clause.

2. Exemption of payable tax amounts

a/ Business households and business individuals specified in Clause 1 of this Article will be exempt from payable personal income tax, value-added tax, excise tax, royalty and environmental protection tax amounts that arise from production and business activities of the months in quarters III and IV of 2021.

The tax exemption specified in this Clause does not apply to income and turnover amounts earned from the provision of software products and services; products and services with digital contents for entertainment, video games, digital films, digital photos, digital music, and digital advertising.

b/ Those that have paid payable tax amounts arising from production and business activities of the months in quarters III and IV of 2021 may have their overpaid tax amounts (if any) cleared by tax offices against their debt amounts or tax amounts for subsequent periods or refunded in accordance with the law on tax administration.

3. Bases for determination of to-be-exempted tax amounts

a/ For cases requiring tax offices to issue tax payment notices: Tax offices shall base themselves on payable tax amounts of the months for quarter III and IV of 2021 stated in their tax payment notices to determine to-be-exempted tax amounts of business households and business .

b/ For cases not requiring tax offices to issue tax payment notices: Taxpayers (including also organizations and individuals that make deductions, declarations or payments on behalf of business households and business individuals; and business households using book/loose invoices) shall base themselves on payable tax amounts stated in tax returns to determine to-be-exempted tax amounts of business households and business individuals from production and business activities of the months for quarters III and IV of 2021. In cases in which tax returns are made according to payment period or to year (property lease, private house construction, or declaration made for every arising amount), to-be-exempted tax amounts are payable tax amounts corresponding to actually earned turnover of the months in quarters III and IV of 2021. If based on goods or service provision contracts of business households or business individuals, it is impossible to determine the actually earned turnover amounts of the months in quarters III and IV of business households or business individuals, they shall be determined according to monthly average turnover amounts based on contract values.

If goods or service provision contracts of business households or business individuals are signed in a month, the contractual duration shall be calculated in a full month.

4. Implementation order and procedures

a/ For cases requiring tax agencies offices to issue payment notices:

- Tax offices shall make lists of business households and business individuals under their respective management in localities in order to identify tax exemption beneficiaries according to Form No. 01-1/DS-MTHK in Appendix II to this Decree.

- Tax offices shall base themselves on payable tax amounts of business households and business individuals as stated in payment notices on their databases to determine to-be-exempt tax amounts.

- Heads of district-level/regional Tax Branches shall issue tax exemption decisions, each of which enclosed with the list of all tax exemption-eligible business households and business individuals according to Form No. 01/MTHK provided in Appendix II to this Decree. After tax offices issue tax exemption decisions under Resolution No. 406/NQ-UBTVQH15 for all business households and business individuals engaged in production and business activities in their localities, if there are new business households or individuals, tax offices shall make lists thereof by the end of the month in order to issue decisions on tax exemption for such business households and business individuals that are eligible for tax exemption under Resolution No. 406/NQ-UBTVQH15.

- Tax offices shall issue tax exemption notices under Resolution No. 406/NQ-UBTVQH15 according to Form No. 01/TBSMT-CNKD in Appendix II to this Decree after issuing and sending tax exemption decisions to eligible business households and business individuals.

b/ For cases not requiring tax offices to issue payment notices

Business households and business individuals, organizations and individuals making deductions, declarations or payments on behalf of business households and business individuals, and business households using book/loose invoices shall determine by themselves post-exemption payable tax amounts for being declared in tax returns and at the same time make a list of to-be-exempted tax amounts according to Form No. 01/PL-CNKD provided in Appendix II to this Decree for being enclosed with tax returns.

Article 3. Reduction of value-added tax

1. To reduce value-added tax from November 1, 2021, through December 31, 2021, for the following goods and services:

a/ Transport services (railway transport, waterway transport, aviation transport, and other land transport); accommodation services; food catering services; services provided by travel agents, tour operators and services in support of, or related to, tour promotion and organization.

b/ Publishing products and services; cinematographic services, production of television broadcasts, music recordings and publishing services; art works and artistic creation and entertainment services; services of libraries, archives, museums and other cultural activities; sports, leisure and entertainment services.

c/ Detailed information on tax reduction-eligible goods and services specified at Points a and b of this Clause is provided in Appendix I on lists of goods and services eligible for value-added tax reduction to this Decree, in which goods and services specified at Point b of this Clause do not include publication software and goods produced and services provided online.

d/ In case goods and services specified in this Clause are not liable to value-added tax in accordance with the Law on Value-Added Tax, such Law must be complied with.

2. Value-added tax reduction levels

a/ Enterprises and organizations that calculate value-added tax by the deduction method will be entitled to 30% reduction of value-added tax rates  applicable to goods and services specified in Clause 1 of this Article.

b/ Enterprises and organizations that calculate value-added tax by the method of turnover percentage (%) will be entitled to 30% reduction for calculation of value-added tax on goods and services specified in Clause 1 of this Article.

3. Implementation order and procedures

a/ Enterprises and organizations specified at Point a, Clause 2 of this Article, when making value-added invoices for value-added tax reduction-eligible goods and services shall write on the value-added tax rate line “the law-specified tax rate (5% or 10%) x 70%”; value-added tax amount; and total amount payable by the buyer. Based on value-added tax invoices, enterprises and organizations producing goods or providing services shall declare output value-added tax amounts while enterprises and organizations engaged in production or business activities and buying goods or services shall declare input value-added tax deductions according to reduced tax amounts stated in value-added tax invoices.

b/ Enterprises and organizations specified at Point b, Clause 2 of this Article, when making sale invoices for provision of value-added tax reduction-eligible goods and services shall write in the column “total amount” all money amounts paid for goods and services before value-added tax reduction and on the line “total payment amount for goods or services” the amount reduced by 30% of turnover and the note: “Reduced… (amount) equal to 30% of turnover for value-added tax calculation under Resolution No. 406/NQ-UBTVQH15”.

4. Enterprises and organizations that deal in assorted goods and services, when making invoices, shall make separate invoices for value-added tax reduction-eligible goods and services.

5. In case enterprises or organizations that have made invoices and declarations based on tax rates or turnover percentage for value-added tax calculation that are not yet reduced, sellers and buyers shall make minutes or written agreements clearly stating errors, while the sellers shall make invoices with corrected errors and hand over them to the buyers. Based on corrected invoices, the sellers shall declare adjusted output tax amounts while the buyers shall declare adjusted input tax amounts (if any).

6. In case enterprises or organizations dealing in value-added tax reduction-eligible goods or services have issued invoices printed in the form of tickets pre-printed with par value which they have not yet used up and wish to use them in the future, they shall stamp their goods or services showing prices with 30%-reduced value-added tax rate or prices with 30% reduction of turnover percentage next to the item “printed price tags” for future use.

7. Enterprises and organizations specified in this Article shall declare value-added tax reduction-eligible goods and services according to the Appendix on value-added tax reduction under Resolution No. 406/NQ-UBTVQH15 in Appendix II to this Decree together with their value-added tax returns.

Article 4. Late-payment interest exemption

1. Exemption from late payment interest amounts arising in 2020 and 2021 for tax arrears amounts, land use levy and land rentals may be given to taxpayers being enterprises and organizations (including their dependent units and business locations) that suffer losses in the 2020 tax period.

2. Determination of to-be-exempted late-payment interest amounts

Tax offices directly managing taxpayers and tax offices managing tax, land use levy and land rental amounts shall base themselves on tax administration data to determine late-payment interest amounts arising in 2020 and 2021 payable by taxpayers to issue decisions on late-payment interest exemption.

3. Competence to give late-payment interest exemption

Heads of tax offices directly managing taxpayers and tax offices managing tax, land use levy and land rental amounts shall decide to give late-payment interest exemption to taxpayers.

4. Late-payment interest exemption order, procedures and dossiers

a/ Taxpayers shall make written requests for late-payment interest exemption, clearly stating their losses arising in the 2020 tax period, according to Form No. 01/MTCN provided in Appendix II to this Decree and send them to their managing tax offices and tax offices managing tax, land use levy and land rental amounts by electronic means, by hand-delivery or by post.

Tax offices managing tax, land use levy and land rental amounts shall coordinate with tax offices directly managing taxpayers in determining conditions on losses arising in the 2020 tax period for use as a basis for consideration and grant of late-payment interest exemption.

If taxpayers have undergone inspection, examination or audit, minutes or decisions, conclusions or notices on inspection, examination or audit results (originals or copies certified by taxpayers) shall be sent together with their written requests for late-payment interest exemption.

Losses arising in the 2020 tax period shall be determined in accordance with the law on enterprise income tax.

b/ Within 15 working days after receiving taxpayers’ written requests for late- payment interest exemption, tax offices shall issue notices of disapproval of exemption from late-payment interest (according to Form No. 02/MTCN provided in Appendix II to this Decree) in case requesters are ineligible for late-payment interest exemption or decisions on late-payment interest exemption (according to Form No. 03/MTCN provided in Appendix II to this Decree) in case requesters are eligible for late-payment interest exemption.

Decisions on late-payment interest exemption shall be sent to taxpayers by electronic means and published on the website of the tax sector.

c/ In case taxpayers have been exempted from late-payment interest but later detected by competent agencies as being ineligible for late-payment interest exemption under this Decree, tax offices shall issue decisions to revoke decisions on late-payment interest exemption.

5. In case taxpayers are eligible for late-payment interest exemption under Clause 1 of this Article and make additional tax declarations or tax offices or competent agencies detect errors through inspection, examination or audit or tax offices or competent agencies issue decisions or notices stating higher payable tax, land use levy or land rental amounts, taxpayers are not required to pay late-payment interest amounts arising in 2020 and 2021 for additional payable tax, land use levy or land rental amounts if satisfying the condition on losses arising in the 2020 tax period.

6. In case taxpayers have paid late-payment interest amounts by the time Resolution No. 406/NQ-UBTVQH15 takes effect, their cases will not be reconsidered.

Article 5. Implementation provisions

1. This Decree takes effect on the effective date of Resolution No. 406/NQ-UBTVQH15.

2. The Ministry of Finance shall guide the resolution of problems arising in the course of implementation of this Decree.

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

On behalf of the Government
For the Prime Minister
Deputy Prime Minister
LE MINH KHAI

* The appendices to this Decree are not translated.