Is a waste treatment business eligible to VAT deferral in Vietnam?

Does the Decision on tax deferral in special cases depend on periods of time in Vietnam?

Based on Article 63 of the Law on Tax Administration 2019 which stipulates as follows:

Tax Deferral in Special Circumstances

The Government of Vietnam decides on the tax deferral for industries, businesses facing special difficulties during specific periods. The tax deferral does not lead to adjustments in the state budget estimates already decided by the National Assembly.

Thus, the Government of Vietnam is the body that decides on the tax deferral in special cases during specific periods.

Is a waste treatment business eligible to VAT deferral in Vietnam? (Image from the Internet)

Is a waste treatment business eligible to VAT deferral in Vietnam?

Based on Article 3 of Decree 64/2024/ND-CP regarding eligible entities for deferral as follows:

Eligible entities for tax deferral

1. Enterprises, organizations, households, business households, and individuals engaged in production in the following economic sectors:

a) Agriculture, forestry, and fishery;

b) Food production and processing; textiles; apparel production; leather and related products; wood processing and manufacturing from wood, bamboo (except beds, cabinets, tables, chairs); production from straw, thatch, and braid materials; paper and paper products manufacturing; rubber and plastic products manufacturing; non-metallic mineral product manufacturing; metal manufacturing; mechanical processing; metal treatment and coating; electronic products, computers, and optical product manufacturing; automobile and other motor vehicle manufacturing; bed, cabinet, table, and chair manufacturing;

c) Construction;

d) Publishing activities; film production, television program production, recording and music publishing activities;

dd) Crude oil and natural gas extraction (excluding corporate income tax on crude oil, condensate, natural gas revenues under agreements, contracts);

e) Beverage production; printing and reproduction of recorded media; coke production, refined petroleum products; chemical and chemical product manufacturing; production of fabricated metal products (except machinery and equipment); motorcycle and motorbike manufacturing; machinery and equipment repair, maintenance and installation;

g) Water drainage and waste treatment.

2. Enterprises, organizations, households, business households, and individuals engaged in business in the following economic sectors:

a) Transportation and warehousing; accommodation and food services; education and training; healthcare and social assistance activities; real estate business activities;

b) Labor and employment services; activities of travel agencies, tour operators and other related support services in promoting and organizing tours;

c) Creative, arts and entertainment activities; library, archive, museum, and other cultural activities; sports and recreation activities; film projection activities;

d) Broadcasting and television activities; computer programming, consultancy services, and related activities; information services;

dd) Support services for mining activities.

The economic sector list specified in Clause 1 and Clause 2 of this Article is determined according to Decision No. 27/2018/QD-TTg dated July 6, 2018, by the Prime Minister on the promulgation of Vietnam's economic sector system.

The economic subsection according to Appendix I issued together with Decision No. 27/2018/QD-TTg includes 5 levels, and the determination of the economic sector follows the principle: if the name of the economic sector specified in Clauses 1 and 2 of this Article belongs to level 1, then the regulations on deferral apply to all economic sectors of sub-levels 2, 3, 4, and 5 of level 1; if it belongs to level 2, the regulations on deferral apply to all economic sectors of sub-levels 3, 4, and 5 of level 2; if it belongs to level 3, the regulations on deferral apply to all economic sectors of sub-levels 4, and 5 of level 3; if it belongs to level 4, the regulations on deferral apply to all economic sectors of sub-level 5 of level 4.

3. Enterprises, organizations, households, business households, and individuals engaged in the production of prioritized industrial support products; key mechanical products.

Prioritized industrial support products are identified according to Decree No. 111/2015/ND-CP dated November 3, 2015, of the Government of Vietnam on industrial support development; key mechanical products are identified according to Decision No. 319/QD-TTg dated March 15, 2018, by the Prime Minister approving the Strategy for the Development of Vietnam's Mechanical Industry by 2025, with a vision to 2035.

4. Small and micro enterprises are determined according to the Law on Support for Small and Medium Enterprises 2017 and Decree No. 80/2021/ND-CP dated August 26, 2021, of the Government of Vietnam detailing some articles of the Law on Support for Small and Medium Enterprises.

Thus, based on the above regulations, waste treatment businesses eligible for VAT payment deferral are among the entities that qualify for a VAT deferral.

What are procedures for applying for tax deferral in Vietnam?

According to the provisions of Article 65 of the Law on Tax Administration 2019 as follows:

- The tax deferral file includes:

+ A written request for tax deferral, stating the reason, tax amount, payment deadline;

+ Documentation proving the reason for the tax deferral.

- The Minister of Finance stipulates the details of the tax deferral file.

Regarding the receipt and handling of the tax deferral file:

- The tax administration authority receives the taxpayer's application for tax deferral through the following forms:

+ Direct submission at the tax administration authority;

+ Sending through the postal service;

+ Electronic submission via the electronic transaction portal of the tax administration authority.

- The tax administration authority processes the tax deferral file as follows:

+ If the file is legal, complete, and in the correct format, notify in writing the taxpayer about the tax deferral within 10 working days from the date of receipt of the complete file;

+ If the file is incomplete according to regulations, notify in writing the taxpayer within 3 working days from the date of file receipt.

Besides, according to Clause 2, Article 24 of the Circular 80/2021/TT-BTC, the tax deferral file includes:

[1] For cases of natural disasters, calamities, epidemics, fires, unexpected accidents as stipulated in point a Clause 27 Article 3 of the Law on Tax Administration 2019, the file includes:

- A taxpayer's tax deferral request according to form No. 01/GHAN (download) promulgated with Appendix 1 of the Circular 80/2021/TT-BTC;

- Documents confirming the time, location of natural disasters, calamities, epidemics, fires, unexpected accidents issued by competent authorities (original or certified copy by the taxpayer);

- A document determining the material loss value created by the taxpayer or the taxpayer’s legal representative who is responsible for the accuracy of the data;

- Documents (original or certified copies) stipulating the responsibilities of organizations or individuals to compensate for losses (if any);

- Documents (original or certified copies) related to the compensation of losses (if any).

[2] For other cases of force majeure as stipulated in Clause 1 Article 3 of Decree 126/2020/ND-CP, the file includes:

- A taxpayer's tax deferral request according to form No. 01/GHAN (download) promulgated with Appendix 1 of the Circular 80/2021/TT-BTC;

- Document determining the material loss value created by the taxpayer or the taxpayer’s legal representative who is responsible for the accuracy of the data;

- A document from competent authorities confirming the time, location of force majeure; and evidence of taxpayer cessation or suspension of business activities due to war, riots, strikes causing production or business cessation or suspension (original or certified copy by the taxpayer);

- Documents proving the risk was beyond the subjective cause, responsibility of the taxpayer, and the taxpayer's inability to pay state budget due to risks not stemming from the taxpayer's fault (original or certified copy by the taxpayer);

- Documents (original or certified copies) from insurance bodies relating to loss compensation (if any).

[3] For relocation of production or business establishments as stipulated in point b Clause 1 Article 62 of the Law on Tax Administration 2019. The file includes:

- A taxpayer's tax deferral request according to form No. 01/GHAN (download) promulgated with Appendix 1 of the Circular 80/2021/TT-BTC;

- Decision from a competent state agency about the relocation of production, business establishments for the taxpayer (original or certified copy by the taxpayer);

- Scheme or relocation plan, showing the taxpayer’s relocation timetable and progress (original or certified copy by the taxpayer).

* Once the file is complete, the tax administration authority receives the taxpayer's tax deferral file through the following forms: (Article 65 Law on Tax Administration 2019)

- Direct submission at the tax administration authority;

- Sending through the postal service;

- Electronic submission via the electronic transaction portal of the tax administration authority.

* The tax administration authority processes the tax deferral file as follows:

- If the file is legal, complete, and in the correct format, notify in writing the taxpayer about the tax deferral within 10 working days from the date of receipt of the complete file;

- If the file is incomplete according to regulations, notify in writing the taxpayer within 3 working days from the date of file receipt.