Resolution No. 63/NQ-CP dated August 25, 2014 of the Government on tax solutions to remove problems and difficulties and promote the business development

RESOLUTION

On a number of tax-related solutions to remove difficulties and obstacles for, and to boost the development of, enterprises[1]

THE GOVERNMENT

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

Pursuant to the Government’s Decree No. 08/2012/ND-CP of February 16, 2012, promulgating the Working Regulation of the Government;

After examining the Ministry of Finance’s Report No. 95/TTr-BTC of July 28, 2014, discussions of the cabinet members and the Prime Minister’s conclusion at the July regular meeting held on July 30 and 31, 2014,

RESOLVES:

I. TAX-RELATED SOLUTIONS TO REMOVE DIFFICULTIES AND OBSTACLES FOR, AND TO BOOST THE DEVELOPMENT OF, ENTERPRISES UNDER THE COMPETENCE OF THE GOVERNMENT AND PRIME MINISTER

1. To extend the tax payment deadline for no more than 60 days for value-added tax (VAT) amounts on machines or equipments imported to create fixed assets of investment projects with a total import value of at least VND 100 billion. The Ministry of Finance shall direct tax agencies to make tax refund before tax inspection within 5 working days after tax agencies receive complete dossiers of request for tax refund of enterprises.

2. To extend the tax payment deadline for no more than 2 years for investment projects which have not yet received payment of capital construction investment funds incorporated in state budget estimates. Tax amounts with extended deadlines must not exceed owed state budget allocations and the extended tax payment time limit must not exceed the period for which state budget allocations are owed.

3. Enterprises may account as deductible expenses welfare payments made directly for employees for which enterprises have invoices and documents as prescribed. The total expense amount must not exceed one month’s average salary paid to employees.

4. After licensed investment projects have their investment capital amounts, investment phases and specific implementation schedules registered with licensing agencies in their first-time investment registration dossiers, investment projects licensed for subsequent investment phases in case investment has been actually made may be regarded as component projects of investment projects licensed for the first time and enjoy enterprise income tax incentives at the incentive rates applicable to the first-time investment projects. Investment projects licensed before January 1, 2014, may enjoy tax incentives for the remaining incentive duration counting from January 1, 2014 (excluding incentives actually enjoyed before January 1, 2014).

Enterprises that enjoy enterprise income tax incentives for the 2009-2013 period and have made additional investment in regular machinery and equipment in the course of production and business operation shall enjoy enterprise income tax incentives for their additionally earned incomes (not applicable to those previously enjoying the incentives). 

5. Industrial parks entitled to enterprise income tax incentives include industrial parks in urban districts of special-grade urban centers, centrally run grade-I urban centers, provincial-level grade-I urban centers newly established from rural districts since January 1, 2009.

6. Benefits being houses built and provided free of charge by employers to employees working in industrial parks, houses built and provided free of charge by employers in economic zones, localities with difficult socio-economic conditions or particularly difficult socio-economic conditions to employees are not accounted as incomes liable to personal income tax.

7. For real estate transfer, individuals may choose calculation methods and pay either 25 percent of income from each transfer or 2 percent of selling price in each transfer.

8. For securities transfer, individuals are may choose calculation methods, pay 20 percent of annual income and make year-end tax settlement; or pay 0.1 percent of selling price in each transfer without making year-end tax settlement.

9. Individuals and business households that have income from business activities and have paid presumptive tax and individuals acting as insurance or lottery agents or engaged in multi-level marketing and have their personal income tax withheld by their income payers are not subject to tax settlement.

10. Enterprises may declare and deduct input VAT in case of having no non-cash payment documents because the payment under contracts is not due.

11. Taxpayers that have an annual income of VND 50 billion or under shall declare VAT on a quarterly basis.

12. Taxpayers shall declare tax settlement on an annual basis and temporarily pay enterprise income tax on a quarterly basis. In case the total temporarily paid tax amount is at least 20 percent lower than the payable enterprise income tax amount according to the tax settlement, enterprises shall pay late payment interest for the difference between these amounts counting from December 31 of the tax declaration year to the date of actual payment of the deficit.

13. The Ministry of Finance shall assume the prime responsibility for, and coordinate with related ministries and sectors in, proposing to the Prime Minister amendments and supplements to the detailed list of types, sizes and standards of establishments engaged in socialized education and training, vocational training, healthcare, culture, sports, environmental protection and entitled to policies to promote the socialized sectors suitable to practical conditions.

Pending amendments and supplements to such detailed list, enterprise income tax will not be retrospectively collected.

14. The Ministry of Finance shall coordinate with the Vietnam Social Security in proposing solutions to reduce by at least 50% the time volume for payment of social insurance, health insurance and unemployment insurance premiums.

 II. TAX-RELATED SOLUTIONS TO REMOVE DIFFICULTIES AND OBSTACLES FOR, AND PROMOTE THE DEVELOPMENT OF, ENTERPRISES UNDER THE NATIONAL ASSEMBLY’S COMPETENCE

1. Enterprises having investment projects are entitled to enterprise income tax incentives in accordance with the law on enterprise income tax at the time of being granted investment licenses or certificates. In case there are amendments to the law on enterprise income tax, enterprises may choose to enjoy the tax incentives they are currently entitled to as provided by law at the time of being licensed or new incentives for the remaining incentive period under the revised law from its effective date if satisfying the conditions for enjoying incentives prescribed in such law.

2. Enterprises’ incomes from the implementation of new investment projects to manufacture products on the list of supporting industry products prioritized for development are entitled to the enterprise income tax rate of 10% in 15 years, tax exemption for 4 years and a 50% reduction of payable tax amounts for subsequent 9 years. In case enterprises expand the manufacture of such products while satisfying one of the criteria on extensive investment prescribed in Law No. 32/2013/QH13 on Enterprise Income Tax, they may choose to enjoy either existing tax incentives (including tax rates and exemption or reduction period) for the remaining incentive period for their operating projects (if any) or tax exemption for 4 years and a 50% reduction of payable tax amounts for subsequent 9 years for additional incomes from such extensive investment.

The Government shall provide the list of supporting industry products prioritized for development.

3. Incomes remitted to Vietnam from offshore investment of Vietnamese enterprises are eligible to tax exemption or reduction or are not liable to tax. The Prime Minister is assigned to issue specific decision.

4. Incomes generated from the implementation of manufacture investment projects (except projects to manufacture goods liable to excise tax or mineral mining projects) capitalized at VND 12 trillion (twelve trillion) or more and disbursed within 5 years after being granted investment licenses are entitled to the preferential tax rate of 10% for 15 years, tax exemption for 4 years and a 50% reduction of payable tax amounts for subsequent 9 years. In case special attraction of investment is needed, the period of application of the 10% tax rate may be extended but must not exceed 15 years.

5. The tax rate of 20% in 2014 and 2015 will apply to agricultural enterprises regularly employing more than 300 laborers and factoring harvested products for laborers not residing in areas with difficult or extremely difficult social-economic conditions. From January 1, 2016, incomes of such enterprises will be subject to the tax rate of 17%.

6. The capped expense level prescribed at Point 2.m, Clause 5, Article 1 of Law No. 32/2013/QH13 on Enterprise Income Tax is applicable only to advertising expenses.

7. Salaries and wages of Vietnamese seamen working for foreign shipping agents or Vietnamese shipping agents for international seaborne transportation are exempt from personal income tax.

8. Incomes of ship owners from the provision of direct services for offshore fishing activities are exempt from personal income tax.

9. Personal income tax prescribed at Point c, Clause 6, Article 3 of the Law on Personal Income Tax is only applicable to incomes from bet winning.

10. Input VAT imposed on goods purchased or imported to create fixed assets of socialized projects on education and training, vocational training, healthcare, culture and sports and environment protection may be deducted or refunded.

11. VAT imposed on ships newly built or upgraded with an engine capacity of at least 400 horsepower (CV) for fishing activities of ship owners may be refunded.

12. Natural water used for agriculture, forestry, fisheries and salt-making is not liable to royalties.

13. Enterprises shall determine their turnover, expenses, taxable prices and taxes remittable to the state budget in Vietnam dong (except those paying taxes in foreign currencies as prescribed by the Government); in case enterprises earn turnover, have expenses or set taxable prices in foreign currencies or are obliged to pay tax in foreign currencies but permitted by competent agencies to pay in Vietnam dong, they shall convert such foreign currencies into Vietnam dong according to exchange rates at the time of turnover earning.

14. To write off late payment fines imposed before July 1, 2013, on enterprises meeting objective difficulties and having paid principal tax arrears before December 31, 2014. The competence to write off tax arrears is provided in Clause 22, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Tax Administration. The Government is assigned to specifically prescribe enterprises meeting objective difficulties and eligible to have above-said late payment fines written off.

15. Based on practical circumstances and information technology levels, the Government shall specify documents included in declaration, tax payment, customs, tax refund and tax regression dossiers which are not required to be submitted by taxpayers as they are already kept by tax agencies and customs offices.

III. ORGANIZATION OF IMPLEMENTATION

1. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Justice, the Government Office and related ministries and agencies in:

a/ Submitting to the Government for promulgation the Decree amending and supplementing the Government’s Decree No. 65/2013/ND-CP of June 27, 2013, Decree No. 83/2013/ND-CP of July 22, 2013, Decree No. 209/2013/ND-CP of December 18, 2013, and Decree No. 218/2013/ND-CP of December 26, 2013, and submitting to the Prime Minister for promulgation other relevant legal documents to implement the solutions specified in Section I of this Resolution in the third quarter of 2014 under the simplified order and procedures;

b/ Finalizing the National Assembly’s draft resolution on the solutions specified in Section II of this Resolution. The Minister of Finance, as authorized by the Prime Minister and on behalf of the Government, shall submit this draft to National Assembly XIII at the 8^th meeting for consideration and decision;

c/ Boosting the communication and dissemination of the tax-related solutions to remove difficulties and obstacles for, and promote the development of, enterprises specified in this Resolution for people and enterprises to know, monitor and supervise the implementation.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees shall, within the scope of their assigned tasks and functions, focus on directing, guiding and organizing the implementation and coordination in implementation of the solutions specified in this Resolution to promptly remove difficulties for enterprises and support the market;  intensify the examination and supervision during the performance of tasks by such agencies, organizations and individuals; promptly commend or strictly discipline those properly performing or failing to perform their assigned tasks; and follow up and take the initiative in monitoring and evaluating practical conditions before taking flexible and timely measures or proposing to competent authorities for timely and effective directing and administrating measures.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG